How valuable is a college degree? Depends if parents have one, too - Deseret News

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A college degree typically rewards graduates with more opportunity and greater earnings. But graduates with at least one parent who also completed college are apt to get a bigger payoff than first-generation college graduates, according to a new report by the Pew Research Center.

“Even as the cost of college continues to rise, with student debt levels climbing along with it, the long-term financial benefits of a four-year college degree remain indisputable. Adults who have attained at least a bachelor’s degree have better economic outcomes, on average, than adults who have not completed college. They tend to earn more and accumulate more wealth,” wrote Pew economist Richard Fry in the report, released Tuesday.

Having at least one college-educated parent make it more likely an adult child will also complete college (70% vs. 26% for those with less-educated parents). And economic outcomes are better, too, with more household income and greater wealth accumulation, Fry told the Deseret News.

The benefits of a parent’s completed higher education evaporate, though, if that younger generation doesn’t stick it out and earn a four-year degree. “Among adults who have not graduated from college, there is no substantial economic boost associated with having a parent with at least a bachelor’s degree,” Fry wrote.

Experts agree that it’s worth looking at policies and practices that help “first-generation” students tackle college. And though earning a four-year degree is not “the great leveler” because by their 30s, 40s and 50s college grads don’t all fare the same, Fry emphasized first-generation graduates typically still create opportunities and bolster household earnings.

And they are very likely banking benefits for their sons and daughters.

Tricky but rewarding

The precise mechanism for the financial benefit tied to a college graduate’s parent’s education level isn’t known, but it’s a not hard to imagine possibilities, Fry said. Parents who made it through college probably give their children a leg up on navigating the complicated higher education system. They know from experience their children will need to take college prerequisites, and may have to take entrance tests, apply for financial aid — the federal form is no fun! several experts said — plus meet other deadlines and requirements.

Those educated parents also probably help their kids with some university-related costs. Studies show children without a well-educated parent generally take on more student debt, Fry said. Plus, if the college-grad parents don’t know everything about a particular college, they probably understand the college culture well enough to know what questions to ask and where to start asking them.

Income difference among college graduates based on a parent’s education is striking. College grads with a college-educated parent have a median household income of $135,800, compared to $99,600 for a first-generation college grad, the report said.

Wealth — the accumulation of property and other assets — is also skewed toward those with a well-educated parent. The median wealth of households headed by a first-generation college graduate is $152,000, compared to $224,500 for households headed by a second-generation graduate.

A parents’ educational attainment even shows up in what college their children attend. If a parent earned a degree, the college student is more likely to start out at a four-year institution. That matters because research says children who start out at a four-year college are more likely to get a bachelor’s degree or better than those who attend a two-year school and then have to figure out how to transfer credits to get a bachelor’s degree.

Second-generation college graduates are also more apt to get an advanced degree than are first-generation graduates. That boosts income, too.

Marital status doesn’t matter, “as first-generation college graduates are as likely as other college graduates to be married,” the report says.

A very strange year

Fry noted that many higher education institutions now emphasize providing extra help to students whose parents never went to college, both in helping them get on campus and do well once they’re there.

That need is particularly acute now as college students and their parents have been shaken by the pandemic, said Eva McGregor Dodds, an independent college consultant from Franklin, Michigan. She predicts a “season of summer melt like we have not seen before. First-generation students and those with college graduates in the family are splashing around looking for a path forward they can trust.”

Messages have been muddled and some rules changed because of COVID-19, including test admission requirements and financial aid, she said. “I worry that some first-year students are adrift as they distrust their options. Parents are not sure what messaging to trust, either — and it can be so complicated.“

Dodd said more students and their families are making deposits and reserving spots at more than one school to leave “pivoting room after over a year of not being able to control their educational narrative.“

The pandemic has made students, their parents and institutions of higher education all skittish as they’ve dealt with changing rules, social distancing, online coursework and a great deal of uncertainty. In response, some colleges are overenrolling, according to Dodds. That creates a student surplus, so If students don’t send back forms by a certain date, for example, it provides schools an excuse to cancel those enrollments. The colleges want to be sure they have enough students, but not too many.

“As colleges feel squeezed for space, unfortunately, some may look to find ways to reduce the number of students ... even more of a reason to be vigilant about requirements,” she noted.

COVID-19 also complicated college prep; many undergraduates not only don’t have a parent who has been through the process before them, but they lacked the in-person support of a school counselor during the pandemic, she said.

Housing deposits, tuition deposits, the language of financial aid offers and deadlines that vary by college have many parents creating spreadsheets to help their child decide where to commit, what to take and how to pay for school, she said.

Helping first-gens

The “soft skills” are the most important for first-generation students, according to Dodds. “Building their own advocacy network to make sure they are in the know about what they do not know can feel daunting, especially after a year of feeling disconnected online.”

Inside Higher Ed published a list of policy recommendations by Alecea Standlee for college administrators and faculty to help first-generation college students flourish and finish. An assistant professor of sociology at Gettysburg College, she knows first-generation challenges firsthand. She was the first in her family to earn a college degree.

Her recommendations include helping students form connections and relationships on campus, being explicit instead of assuming all students know basics such as the requirement that papers be typed and including parents in the coursework. “I have used a budget activity, a biography activity and an intergenerational pop culture activity successfully,” she wrote.

The Pew study used data from two Federal Reserve surveys: The Survey of Household and Economic Decisionmaking looked at college type and how much related debt they incurred. That was paired with the Survey of Consumer Finances, which provided data on parental education and data on inheritance — either already collected or expected. Combining them afforded a look at the relationship between finances and parental education, Fry said.

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