Does Enrolling in an HBCU Improve Educational, Economic, and Financial Outcomes for Black Students?
- Greg Thorson
- Feb 10
- 5 min read
Updated: Feb 28
The study "HBCU Enrollment and Longer-Term Outcomes" investigates whether enrolling in a Historically Black College or University (HBCU) improves educational, economic, and financial outcomes for Black students. Using data from 1.2 million Black SAT takers (2004–2010), linked to National Student Clearinghouse and TransUnion credit data, the study finds that HBCU enrollment increases the likelihood of earning a bachelor’s degree by 14.6 percentage points (40%) and raises household income at age 30 by 5%. However, HBCU enrollees accumulate $12,000 more in student loans. The findings suggest that HBCUs play a critical role in expanding access to four-year degrees and economic mobility.
Full Citation and Link to Article
Edwards, Ashley, Justin Ortagus, Jonathan Smith, and Andria Smythe. "HBCU Enrollment and Longer-Term Outcomes." American Economic Journal: Economic Policy, forthcoming.
Extended Summary
Central Research Question
The study "HBCU Enrollment and Longer-Term Outcomes" examines whether enrolling in a Historically Black College or University (HBCU) improves educational, economic, and financial outcomes for Black students. The central research question is: Does enrolling in an HBCU lead to better long-term academic and financial success compared to other postsecondary options? Given the persistent racial disparities in college completion and earnings, the study explores whether HBCUs help close these gaps. It also investigates whether HBCUs provide unique benefits beyond traditional institutional characteristics, such as selectivity and tuition costs, and considers how counterfactual enrollment choices (e.g., no college, two-year institutions, non-HBCU four-year institutions) influence outcomes.
Previous Literature
Prior research on HBCUs has primarily focused on educational attainment, student experiences, and economic returns. Studies indicate that HBCUs have historically played a crucial role in educating Black professionals, contributing to disproportionate numbers of Black judges, engineers, teachers, and STEM graduates. Research by Ehrenberg and Rothstein (1993) and Franke and DeAngelo (2018) suggests that, after controlling for student characteristics, HBCUs produce higher degree completion rates for Black students than non-HBCUs.
However, findings on labor market outcomes have been mixed. Some studies, such as Fryer and Greenstone (2010), show that attending an HBCU had positive earnings effects for graduates in the 1970s but negative effects in the 1990s. Other studies, such as Price et al. (2011) and Elu et al. (2019), indicate that HBCUs provide comparable or even superior labor market outcomes, particularly for students in STEM fields.
A significant gap in the literature exists regarding longer-term financial outcomes, including credit scores, student loan burdens, and homeownership. Additionally, prior studies often lack robust counterfactual comparisons, making it difficult to isolate the effects of HBCU enrollment from the broader characteristics of students who choose these institutions. This study seeks to address these gaps by leveraging a large dataset and applying rigorous econometric techniques.
Data
The study utilizes a comprehensive dataset linking three major sources of information:
College Board SAT Data (2004–2010) – Includes nearly 1.2 million Black students who took the SAT, along with demographic information (race, parental income, and education), academic performance (SAT scores, AP exam taking), and college application behavior (score sends).
National Student Clearinghouse (NSC) Data (2004–2016) – Tracks postsecondary enrollment, degree completion, and college characteristics for students in the sample.
TransUnion Credit Bureau Data (2017) – Provides financial indicators around age 30, including estimated household income, credit scores, student loan balances, mortgage status, and bankruptcy filings.
This dataset is unique because it follows students from high school through their early careers, allowing researchers to examine both educational and financial outcomes in detail. The inclusion of score sends as a proxy for college applications enables a more accurate measure of students’ initial interests, helping to control for self-selection biases.
Methods
The study employs an observational causal inference approach, using a selection-on-observables strategy to compare students with similar academic backgrounds and college application portfolios who made different enrollment decisions. The key identification strategy follows the method of Dale and Krueger (2002) and Mountjoy and Hickman (2021) by controlling for:
Student demographics (race, gender, parental income and education)
High school attended
SAT scores and AP exam taking
College application portfolios (including all colleges a student applied to, not just the one attended)
By comparing students who applied to similar colleges but made different enrollment choices (HBCU vs. non-HBCU), the study reduces potential selection bias. Additionally, it examines heterogeneous treatment effects based on students' academic backgrounds and institutional selectivity.
The key outcome variables include:
Degree completion rates (bachelor’s and associate degrees)
Student loan balances around age 30
Estimated household income around age 30
Credit scores, mortgage status, and bankruptcy rates
Neighborhood characteristics at age 30 (e.g., median earnings, crime rates)
To address concerns about unobserved confounding variables, the authors conduct robustness checks, including an Oster (2019) test for omitted variable bias, confirming that their findings are unlikely to be driven by unobserved factors.
Findings and Size Effects
The study finds strong evidence that HBCU enrollment significantly improves educational and economic outcomes, particularly for students who might otherwise attend less-selective institutions, two-year colleges, or not enroll in college at all.
Degree Completion
HBCU enrollment increases the likelihood of earning a bachelor’s degree by 14.6 percentage points (40%) compared to students who did not enroll in an HBCU.
There is a 3 percentage point decrease in associate degree attainment, suggesting that some students who might have otherwise attended two-year colleges instead completed four-year degrees at HBCUs.
Student Loans and Financial Outcomes
HBCU enrollees are 10 percentage points more likely to take out student loans, accumulating $12,000 more in student debt by age 30.
Despite the higher student debt burden, HBCU students do not experience significantly worse credit scores than non-HBCU students.
HBCU enrollment reduces the probability of bankruptcy by 0.5 percentage points (30%), suggesting better long-term financial stability.
Earnings and Household Income
HBCU enrollees have 5% higher estimated household income at age 30 than non-HBCU students.
The earnings premium is largest for students from lower-income backgrounds and those with SAT scores below the median.
Neighborhood and Homeownership
HBCU enrollees are 3.2 percentage points less likely to live in the same state as their high school, suggesting greater geographic mobility.
No significant differences are found in neighborhood characteristics (e.g., income levels, crime rates), indicating that HBCU enrollment does not drastically alter residential patterns.
College Major Selection
HBCU enrollees are more likely to choose and complete higher-earning majors, particularly in STEM fields.
The probability of earning a STEM degree increases by 3 percentage points (100% relative increase)among HBCU students.
Conclusion
The study provides compelling evidence that HBCU enrollment significantly improves degree completion, earnings, and long-term financial stability for Black students. While HBCU students incur higher student loan burdens, they experience better labor market outcomes and reduced financial distress (e.g., lower bankruptcy rates), suggesting that the benefits outweigh the costs.
Additionally, the findings highlight that HBCUs are particularly beneficial for students with lower SAT scores or weaker academic backgrounds, who might otherwise attend two-year colleges or forgo college altogether. These students experience the largest gains in degree completion and earnings, reinforcing the role of HBCUs as a key driver of social mobility.
The study also suggests that something unique about HBCUs—beyond institutional characteristics like selectivity and cost—contributes to these positive outcomes. Possible explanations include the supportive campus environment, emphasis on Black student achievement, and strong peer networks.
Overall, the research underscores the continued relevance and importance of HBCUs in reducing racial disparities in higher education and economic opportunity. Given these findings, policymakers should consider increasing financial support for HBCUs to further enhance their ability to serve Black students and promote long-term success.
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