When it comes to getting parental assistance to pay for college, better to be Friday’s child (loving and giving) than Wednesday’s (full of woe). According to a new University of Michigan study, if parents reported that their children at age 12 and under “were cheerful, self-reliant and got along well with others, the parents were more likely to give them financial gifts or loans when they were young adults.” In other words, parents help those who can help themselves.
The study found that more than 60 percent of young adults between the ages of 19 and 22 receive financial help from the Bank of Mom and Dad. The average amount they receive to help cover such expenses as college tuition, rent, and transportation, is about $7,500 annually.
The study, by Patrick Wightman and Robert Schoeni, is based on data from 2,098 interviews conducted between 2005 and 2009 with young men and women and their families. "Young people in the U.S. are taking longer to leave home, finish their schooling, get stable jobs, get married and have children," said Wightman in a statement. "And the slow transition to traditional adult roles has been accompanied by an increase in the financial support young adults receive from their parents."
Respondents were asked how much parents provided to their children beyond room, board and food. Among the key findings:
About 42 percent reported their parents helped them pay bills, ($1,741 on average).
Nearly 35 percent of young adults said their parents helped with college tuition, ($10,147 on average).
About 23 percent received help with vehicles (about $9,682 on average).
About 22 percent received help with their rent away from home ($3,937 on average).
About 11 percent said they received loans from their parents ($2,079 on average) and nearly 7 percent said they received financial gifts (average amount of $8,220).
"As expected, we found a large difference between high- and low-income families both in terms of whether or not they provided financial help to young adult children, and in terms of the amount they provided," Wightman said. About 80 percent of high-income parents provided help to young adult children, Wightman found, compared with slightly less than half of low-income parents.
An investor survey conducted by Millionaire Corner last month found that 71 percent of families with a net worth of less than $100,000 were not contributing financially for the education of a child or grandchild, compared with 57 percent of households with a net worth of $500 and $1 million. Just over one-third (34 percent) of investors overall said they were contributing to a child or grandchild’s education expenses.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.