The Death of DEI: How Cutting Race-Based Policies Could Widen the Wealth Gap

The U.S. Department of Education’s latest directive threatens to pull federal funding from schools that consider race in hiring, admissions, or financial aid. While some are cheering this move as a step toward “equality,” others warn it could further entrench the financial disparities that have long defined America’s economic landscape.

At first glance, removing race from decision-making might seem like a fair and neutral policy. But in reality, it ignores the systemic disadvantages that have shaped the financial destinies of many communities for generations. This isn’t just about education—it’s about wealth, access, and the financial future of millions of Americans.

Higher Education: The Gateway to Economic Mobility

For decades, race-conscious admissions and financial aid programs have served as a bridge for students from underprivileged backgrounds to gain access to prestigious institutions. These universities don’t just provide an education; they offer powerful networks, better job opportunities, and higher earning potential. Without these policies, fewer students from marginalized communities will make it into top schools, setting them up for lower lifetime earnings and limited career growth.

According to data from the Brookings Institution, the median white household holds ten times the wealth of the median Black household. Education has been one of the most effective ways to narrow this gap. Stripping schools of race-based considerations in financial aid and admissions means fewer students of color will gain access to the economic escalator that higher education provides.

Scholarship Programs at Risk

Many scholarships and grants are explicitly designed to help students from historically disadvantaged backgrounds. If institutions fear losing funding for considering race in awarding aid, countless students may lose access to essential financial support. The result? Increased student loan debt for minority students and a greater financial burden that limits their ability to build wealth.

A Corporate and Economic Ripple Effect

This shift won’t just impact students—it will reshape the hiring landscape. Large corporations have increasingly prioritized diversity in hiring, recognizing that diverse teams drive innovation and profitability. If fewer diverse candidates make it through the educational pipeline, companies will struggle to meet their diversity goals. This could lead to a reduction in workplace inclusion initiatives, stifling economic opportunities for millions.

Additionally, many businesses rely on minority professionals—accountants, lawyers, executives—who have climbed the ladder through race-conscious education policies. A decline in diversity in higher education could lead to fewer minority professionals in top positions, reinforcing the status quo of wealth distribution.

Will the Wealth Gap Explode?

If fewer students from underrepresented backgrounds get into top schools, receive scholarships, and secure high-paying jobs, the financial divide between white and non-white communities will only grow. Homeownership rates—already significantly lower for Black and Hispanic families—could decline even further as wealth accumulation slows. Retirement savings disparities may worsen, leaving millions of Americans financially vulnerable in their later years.

The Bigger Picture

This policy shift isn’t just about schools—it’s about money, power, and who gets a fair shot at economic success. Those who celebrate the end of race-conscious policies may soon find that the consequences extend far beyond education. This decision could deepen financial inequalities, restrict upward mobility, and set back decades of progress toward economic fairness.

In the end, this isn’t just an education issue—it’s an economic crisis waiting to unfold. What do you think?