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Parental Income & Capital ~student debt

VU International News and Reviews No. 122 October 22 2018

October 2018

The National Bureau of Economic Research in the US has published a sophisticated study “The role of parental wealth and income in financing children’s college attendance and its consequences”, calculating the correlation and causation between parental income and parental wealth on the one hand and college attendance and college debt on the other. There is a body of research showing a link between parental housing wealth and college attendance, but the authors claim to be the first to look at college attendance and success, college quality and post college debt for the students and the parents in one integrated study.

The found that parental income correlates more strongly with college attendance, but that parental wealth correlates more strongly with college success.

They also found that that parental support for college students leads to limited decrease of student indebtedness, but to substantially higher (mortgage) debts with the parents.

In this manner, the study adds to the evidence-base of what is generally assumed: steep rises in the cost of higher education in the US come at a price!

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