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The American Dream
In its simplest form, the American Dream asserts that success should be determined by effort, not one’s starting point. This is the promise on which most Americans base their hopes and the calculus that is supposed to govern our institutions. Specifically, in the modern US economy, the path to prosperity is understood to pass through the education system. Americans believe—and children are told—that individuals should have an equitable chance to climb the economic ladder, through exertion of their innate talents. However, while there are few ways for children to exit poverty without educational attainment, there is mounting evidence that education is far from a guaranteed ticket to opportunity.
Even more discouraging, these gaps persist even among students with strong academic preparation; 74% of such students from high socioeconomic status graduate college, compared to only 41% of students with similar academic prowess but more economic disadvantage. Further, high school students from low-income families who manage to enroll in college often find themselves in the lower tiers of the stratified higher education system, where they realize outcomes that lag wealthier peers’.
Even when low-income students push through layers of disadvantage to graduate from elite universities, they normally get a high debt. For these students, higher education comes at a high price—one that may take them years to pay off. As their incomes are diverted from asset building to debt management, they lag behind their peers, even with comparable levels of educational attainment. These gaps are often dramatic and—multiplied throughout this generation—they directly undermine the idea that educational attainment is an equalizer in American society. Quite shockingly, low-income students do not get the same benefit from their college degrees as those who start out at an advantage.
While salvaging the American Dream may not require closing the wealth gap entirely, ensuring that education can be a ladder of equitable opportunity requires reducing wealth disparities that start at birth. This is perhaps the most critical conclusion policymakers are forced to grapple with, if the United States is to restore education as a meaningful and viable path to prosperity. While reforms—those that innovate new instructional delivery, tinker with credentialing, or soften the blow of student indebtedness—may speak to some angst about college costs and value, only by striking at wealth inequality directly can policy restore education as a viable path to the nation’s promised prosperity. In today’s economic context, reducing inequality will require a wealth transfer, large enough in size to equip disadvantaged children with a real stake in their own futures, and specifically formulated—by targeting children and focusing on postsecondary education—to be politically palatable.