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CoCo Thesis Final April 22.pdf (889.43 KB)

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Parents’ Saving Behaviors on Children’s Potential College Expenses

Ouyang, Congrong, Ouyang
http://rave.ohiolink.edu/etdc/view?acc_num=osu1461286210

Abstract Details

2016, Master of Education, Ohio State University, Human Ecology: Family and Consumer Sciences Education.
Saving for college has always been considered the most conservative way of preparing to meet the cost of dependent children’s college education. With recent college tuition growth, the future financial burden to many U.S. families is uncertain. As a result, this study is interested in exploring parents’ saving behavior for their dependent children’s college expense. Specifically, this research seeks to understand these households by (1) exploring factors related to children’s college education saving behavior, (2) identifying the saving behaviors of households’ with different age group of children, and (3) analyzing parents’ saving behaviors in terms of their foreseeable educational expenses during the next 5 to 10 years (SCF codebook). The application of the life cycle model theory of saving for children’s college education provides one framework for understanding determinants of savings among households with at least one child younger than 18 years old, and social norm theory is also used to provide some insgihts. The 2013 Survey of Consumer Finances (SCF) is used to investigate the research questions through the use of means testing and logistic regression. Three different logistic regressions are used, including two different sample selections and two different dependent variables. The first sample consists of households with at least one child under 18 years old who is the child of the head and/or the spouse/partner. The results indicate that about 17% of households reported saving for college as the most important saving goal in 2013, and just over 29% reported saving for college as one of their saving goals. Based on a logistic regression, I found that income, marital status, health status, and homeownership were not related to having the goal, but the likelihood of having the goal was higher for parents with a college degree than for those without a high school degree. The likelihood of having the goal was highest for parents with zero net worth. Hispanic and Asian parents are more likely to have this saving goal than other racial ethnic group. Based on to our analysis of households with at least one child between the age of 13 and 17, only 13% of households have children’s college as their most important saving goal and less than 25% of parents have this goal at all. The second logistic regression indicates that excellent health condition, household with work status, household net worth level, homeownership, and parents’ foreseeable educational expense are strong predictors of the presence of this goal. Parents in their 40s are most likely to have this saving goal, and married parents are more likely to have this saving goal than single parents and partners. Homeowners are more likely to save for their children’s college than renters. Similar to our previous results, Hispanic and Asian parents have the highest likelihood of having this goal out of all the racial ethnic groups. Educational foreseeable educational expense is used as our response variable in the third logistic regression, parental educational attainment and households’ net worth level turned out to be the most significant predictors. Differences in significance, magnitude, and even direction of effects were observed between the two sample selections that I used. As a result, this study highlights the importance of the definition and measurement of key concepts. In terms of implications, helping households identify the importance of saving and providing rational saving plans should help relieve the financial burden of college expenses in the future. Social expectations also seem to be an important factor in saving behavior. Therefore, mentorship or peer counseling programs may be a plausible alternative to typical financial planning programs. Policymakers should consider these findings when considering alternative programs and initiatives to help families with higher education planning. Future research directions are also discussed.
Sherman Hanna (Advisor)
Catherine Montalto (Committee Member)
Tansel Yilmazer (Committee Member)
76 p.
Economics; Education; Education Finance; Home Economics Education

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Citations

  • Ouyang, Ouyang, C. (2016). Parents’ Saving Behaviors on Children’s Potential College Expenses [Master's thesis, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1461286210

    APA Style (7th edition)

  • Ouyang, Ouyang, Congrong. Parents’ Saving Behaviors on Children’s Potential College Expenses. 2016. Ohio State University, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1461286210.

    MLA Style (8th edition)

  • Ouyang, Ouyang, Congrong. "Parents’ Saving Behaviors on Children’s Potential College Expenses." Master's thesis, Ohio State University, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=osu1461286210

    Chicago Manual of Style (17th edition)

osu1461286210
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