Rising college costs are placing increasing stress on parents and grandparents, but a new study on the impact of parents’ financial support on young adults suggests students might be better off shouldering more of the bill.
Students who pay their own way through college more strongly consider themselves to be adults and spend less time drinking – particularly compared to students whose parents pay all educational expenses and also provide spending money, according to researchers from the Brigham Young University School of Family Life, who surveyed parents of more than 400 undergraduate students from three large public universities and one small private college.
The study, published in the Journal of Adult Development, found that one-half of the families surveyed paid tuition, books and housing costs. One-fourth of the families also paid other living expenses. At the other extreme, one-third of the students received little or no financial support from their parents, but the researchers discovered there can be a downside to no parental support.
Students who pay their own way are at higher risk for dropping out, leaving researchers to conclude a balanced approach may lead to the best outcome. According to Larry Nelson, a co-author of the study, “Parents who are in a position to help should provide a level of support that facilitates progress towards graduation while enabling children to become invested in their own education by contributing to the cost of getting a degree.”
The recommendation may provide some relief for parents and grandparents who feel increasingly stressed by college costs. According to Public Agenda, a research institute funded by the Bill & Melinda Gates Foundation, college costs have risen more than 400 percent in the last 25 years, while the median family income has increased less than 150 percent.
Even the wealthiest households express growing concern over educational expenses, according to ongoing Millionaire Corner research. Forty-five percent of high net worth individuals – those with investable assets of $5 million to $25 million – say they are worried about their grandchildren’s educational expenses – up from 40 percent last year. One-fourth is concerned about financing their children’s college education, compared to 11 percent last year.
A significant share of investors also supports the notion of students paying their own way. More than 40 percent of the more than 900 investors surveyed by Millionaire Corner in October say it’s important for students to pay their own college tuition. Yet 40 percent also said it was important for students to graduate from college debt-free – no small task in the current economic environment.