Are Asian Households in the U.S. More Likely than Other Households to Help Children with College Costs?
We test whether Asian parents place more importance on helping their children with college costs than parents in other racial/ethnic groups. Some previous research has shown that Asian parents are more likely than comparable White parents to list saving for college as an important goal, but does that indicate that they place more importance on helping their children with college costs? Descriptive analyses of the 2013 Survey of Consumer Finances indicate that Asian parents are more likely than White parents to (1) expect to contribute to their children’s college costs and (2) list college as an important saving goal. Our logistic regression controlling for household characteristics shows that among households with at least one child age 13 to 17, Asian parents are not different from parents with other racial/ethnic identification in expecting to contribute to their children’s college costs. Controlling for household characteristics and expecting to contribute to their children’s college costs, White parents have less than half of the odds of listing college as an important saving goal as Asian parents. However, listing college as a saving goal may not be a good indicator of the importance placed by parents of college for their children, as there are other ways to help with college costs, including borrowing, contributing out of current income, and some parents may consider the goal as having been met by their own previous savings or the savings of relatives.
KeywordsCollege saving Financial planning Asian households Social norms Racial/ethnic differences Survey of consumer finances
JEL ClassificationD11 D12 D14 I2
Compliance with Ethical Standards
Conflict of interest
The authors declare that they have no conflict of interest.
Research Involving with Human and Animal Participants.
This article does not contain any studies with human participants or animals performed by any of the authors.
- Advisory Committee on Student Financial Assistance. (2006). Mortgaging our future: How financial barriers to college undercut America’s global competitiveness. Report. Washington, DC: Advisory Committee on StudentFinancial Assistance. Retrived from: https://www.immagic.com/eLibrary/ARCHIVES/FIN_AID/US_ED/A020618E.pdf.
- Bricker, J., Dettling, L. J., Henriques, A., Hsu, J. W., Moore, K. B., Sabelhaus, J.,.. . et al (2014). Changes in U.S. family finances from 2010 to 2013: Evidence from the Survey of Consumer Finances. Federal Reserve Bulletin, 100(4), 1–41. https://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf. Retrived from:.
- Chen, P., & Finke, M. S. (1996). Negative net worth and the life cycle hypothesis. Financial Counseling and Planning, 7, 87–96.Google Scholar
- Choy, S. P., & Henke, R. R. (1992). Parental financial support for undergraduate education. Washington: National Center for Education Statistics, U.S. Department of Education.Google Scholar
- College Board (2016). Trends in college pricing 2016. Trends in higher education series.Google Scholar
- Feldstein, M. (1995). College scholarship rules and private saving. American Economic Review, 85(3), 522–566.Google Scholar
- Hanna, S. D., & Lindamood, S. (2008). The decrease in stock ownership by minority households. Journal of Financial Counseling and Planning, 19(2), 46–58.Google Scholar
- Haveman, R., & Wolfe, B. (1995). The determinants of children’s attainments: A review of methods and findings. Journal of Economic Literature, 33(4), 1829–1878.Google Scholar
- Horne, C. (2001). Sociological perspectives on the emergence of norms. 3–35. In M. Hechter & K. D. Opp (Eds.), Social norms (pp. 3–35). New York: Russell Sage Foundation.Google Scholar
- Hortz, J. V., Wiemers, E. E., Rasmussen, J., & Koegel, M. K. (2018). The role of parental wealth and income in financing children’s college attendance and its consequences. National Bureau of Economic Research, NBER Working Paper No. w25144.Google Scholar
- Kane, T. J. (2004). College-going and inequality. In K. M. Neckerman (Ed.), Social inequality. New York: Russell Sage.Google Scholar
- Lee, S., Hanna, S., & Siregar, M. (1997). Children’s college as a saving goal. Financial Counseling and Planning, 8(1), 33–36.Google Scholar
- Lieber, R. (2015). Why it makes good sense to save for college now. The New York Times, Oct. 23, B1.Google Scholar
- Messinger, J. (2017). Changing the approach to college funding advice. Journal of Financial Planning, 30(2), 26–29.Google Scholar
- Montalto, C. P., & Sung, J. (1996). Multiple imputation in the 1992 Survey of Consumer Finances. Financial Counseling and Planning, 7(1), 133–146.Google Scholar
- Mountain, T. P., & Hanna, S. D. (2012). Negative net worth and the Life Cycle Hypothesis. Proceedings of the Academy of Financial Services. (online).Google Scholar
- Rauscher, E., Elliott, W., O’Brien, M., Callahan, J., & Steensma, J. (2017). Examining the relationship between parental educational expectations and a community-based children’s savings account program. Children and Youth Service Review, 74(1), 96–107. https://doi.org/10.1016/j.childyouth.2017.02.005.CrossRefGoogle Scholar
- Roderick, M., Nagaoka, J., Coca, V., & Moeller, E. (2008). From high school to the future: Potholes on the road to college. Research Report. Chicago: University of Chicago, Consortium on Chicago School Research. Retrieved from http://ccsr.uchicago.edu/sites/default/files/publications/CCSR_Potholes_Report.pdf.
- SCF Staff (2014). Codebook for the 2013 Survey of Consumer Finances. Retrieved September 27, 2017 from https://www.federalreserve.gov/econres/files/codebk2013.txt.
- Spera, C., & Wentzel, K., R (2009). Parental aspirations for their children’s educational attainment: Relations to ethnicity, parental education, children’s academic performance, and parental perceptions of school climate. Journal of Youth Adolescence, 38, 1140–1152. https://doi.org/10.1007/s10964-008-9314-7.CrossRefGoogle Scholar
- US Census. (2013). U.S. Census Bureau projections show a slower growing, older, more diverse nation a half century from now. Retrieved from https://www.census.gov/newsroom/releases/ archives/population/cb12-243.html.
- Wong, F., & Halgin, R. (2006). The” model minority”: Bane or blessing for Asian Americans? Journal of Multicultural Counseling and Development, 34(1), 38–49. https://doi.org/10.1002/j.2161-1912.2006.tb00025.x.CrossRefGoogle Scholar
- Yao, R., Gutter, M. S., & Hanna, S. D. (2005). The financial risk tolerance of Blacks, Hispanics and whites. Financial Counseling and Planning, 16(1), 51–62. https://ssrn.com/abstract=2740156.
- Yin, A. (2017). Asian test-prep centers offer parents exactly what they want: ‘Results’. New York Times, Magazine, Oct. 25. Retrieved from https://nyti.ms/2h9NeOR.