Federal student aid formulas prioritize income over wealth. Using nationally representative data from two cohorts, we argue that federal student aid policy thus under-addresses wealth-driven financial need and that this oversight contributes to racial disparities in student debt, in turn reinforcing the United States's longstanding racial wealth stratification. Our analyses show that Black and Latine students are disproportionately likely to be low-wealth and to face double disadvantage by wealth and income. We find that, even net of federally-determined financial need, lower-wealth students borrow more in their first year, borrow more over the course of 12 years, owe a greater percentage of original student debt after 12 years, and are more likely to have defaulted on a student loan over the course of 12 years--suggesting considerable unmet need. A basic simulation of how students would have fared with the implementation of a supplemental wealth-based Pell Grant indicates that better accounting for wealth in financial aid can reduce debt burdens and confront racial inequities in student loan debt. The results therefore highlight higher education's centrality as a social institution in which seemingly race-neutral policies may nonetheless reinforce racial stratification.