Parents Give Young Adult Children about $7,500 Annually, New Report Finds

 

More than 60 percent of young adults between the ages of 19 and 22 received some financial help from mom and dad, according to a new University of Michigan/Network study.  The average amount they received – including help with college tuition, rent, and transportation – was roughly $7,500 a year.

The study, “Familial Financial Assistance to Young Adults,” by Network fellow Patrick Wightman, Robert Schoeni of the National Poverty Center at the University of MIchigan, and Keith Robinson of the University of Texas at Austin, is the first to use nationally representative data to calculate parental assistance to young adults.  It is based on data from 2,098 interviews conducted between 2005 and 2009, with young men and women and their families, part of the Panel Study of Income Dynamics Transition to Adulthood Study at the U-M Institute for Social Research.

The findings predate the recession, which has likely only increased the costs. Recent estimates show that more than half of recent college graduates under age 25 are either unemployed or underemployed (working at jobs for which they are overqualified). In addition to the economic crisis of late, as readers of this blog know, the path into adulthood had begun to slow in the late 1980s, and this slowdown is a key reason for the rising financial burden on mom and dad.

Interestingly, the researchers find that a child’s disposition early in life helps predict how willing parents are later to support them. (Any 12-year-olds reading this: shape up and pitch in around the house.)  If parents reported that children age 12 and under were cheerful, self-reliant, and got along well with others, they were more likely to give them financial gifts or loans when they were young adults.

“Basically, this finding shows that parents are more inclined to provide extra support to children whom they perceive as more positive and outgoing,” says Wightman, who is the MacArthur Network on Transitions to Adulthood research fellow at the Gerald R. Ford School of Public Policy at University of Michigan.  “They’re more likely to help those who, even at a young age, help themselves.”

About 65 percent of the young adults lived at home for a significant portion of every year, and the analysis did not include the value of room, board or food.  It did include how much parents gave or paid on children’s behalf for housing away from home, a vehicle, college tuition, help paying pills or just as a gift or personal loan.

Among the key findings:

  • About 42 percent of respondents reported their parents helped them pay bills, with those receiving help getting an average of $1,741;
  • Nearly 35 percent of young adults said their parents helped with college tuition, with those receiving help given an average of $10,147;
  • 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,” says Wightman.

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.

“The gap is especially large for education related assistance,” he reports–which should give us pause, given the growing income disparities between those with and without a college degree and the rising cost of education.

“While just 11 percent of low-income youth received tuition assistance from their parents, 66 percent of high-income youth did.  And among those who did get help, kids from high-income families received an average of $12,877, compared to $5,788 for those from low-income families.”

Still, he reports, poorer families who did help their young adult children provided as great a share of their income overall as wealthier families did – about 10 percent.

The analysis was funded by the Research Network on Transitions to Adulthood with the support of the John D. and Catherine T.  MacArthur Foundation.  The Panel Study of Income Dynamics is funded by the National Science Foundation, the National Institute on Aging, the National Institute of Child Health and Human Development, and the U.S. Department of Agriculture.

Related Links:  http://npc.umich.edu/publications/working_papers/

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A New Model for Helping At-Risk Youth Graduate from College


One thing that the recession has made clear: the value of a college credential, whether a two-year or a four-year degree. The unemployment rates of those without anything more than a high school degree have been persistently higher, as this chart from the Bureau of Labor Statistics makes clear.

That’s one reason why a recent report by the Youth Development Institute is so encouraging. In “The Best of Two Worlds: Lessons from a Community College-Community Organization Collaboration to Increase Student Success,” YDI and its partners, Jobs for the Future and Back on Track, lay out the steps it takes to engage more vulnerable youth in higher education. It also lays out a road map for how community development organizations and community colleges can partner more successfully to help young people secure their futures.

In 2004, YDI and its partners brought together six community-based organizations (CBOs) and the City University of New York (the major college placement for most New York City high school graduates), along with the New York Department of Education. The goal was to design a program to help young people who had struggled in high school, were recent immigrants, or who had dropped out and recently obtained their GED to graduate from college.  They called the program, College Access and Success initiative (CAS).

CBOs often see a one side of young people’s lives — the side that faces the daily hurdles that low incomes and under-resourced neighborhoods present. Meanwhile, community colleges see another side–the struggling student who are hanging on by a tenuous string. In CUNY city colleges, only 18% of students who began an associate’s degree program in 2003 had earned the degree six years later. Only 11% had earned a bachelor’s degree. The graduation rates are even lower for those students entering with a GED, according to the report.

CAS brought these two groups–community colleges and CBOs– together to focus their strengths and coordinate their actions to provide a set of wrap-around services for young people. More than just lip service to the idea of coordination, the initiative is truly collaborative. The CBO (the Cypress Hills Local Development Corporation) and the New York City College of Technology (“City Tech”) met monthly to review the progress of students, and share insights and ideas about what might work better for a particular student. The result was a partnership that blended the strengths of each group to improve student success.

The partnership, as the report notes, “leads to a deeper understanding of each student than would be possible if each partner acted without the insights of the other.” These tete-a-tetes help determine the courses a student should take to complete a major and minimize waste in financial aid; find internships and job opportunities that fit the academic schedules; and decide on any necessary referrals to a range of social, health, and financial services are appropriate.

As the director of programs at Cypress Hills said, “Being able to talk directly to the provost and the administration has made a huge difference. We’ve never had access to higher administration before.”

Likewise, the provost at City Tech has realized how important CBOs are to students as a safety net. “Our students face complex situations that require complex responses,” she told the authors of the report. “I worked in adult education for years. I thought I knew the story. The reality is much more complicated and serious now.”

Like one young single mother. She and her son were in and out of homeless shelters during her time in school, and although she was determined to get into a college program, she kept hitting a brick wall. She was very good in literature and reading, but her math was weak. She could pass the GED reading section, but math tripped her up every time. And she couldn’t go to college until she passed the test. It took her seven years to get the degree.

Key to successful collaboration, as former executive director of YDI and now an ongoing consultant Peter Kleinbard told us, was the intermediary–in this case YDI. “It’s difficult and takes a lot of commitment,” Kleinbard said. “The role of the intermediary was important to keep the people at the table and iron out whatever problems arise.”

To Kleinbard, the success that stemmed from the collaborative, person-centered approach was heartening. “It was encouraging,” he said, “that  when we did the things that experience and research show are effective, they actually worked. Staying close to the kids, it really helped them get through.”

Overall, the students hear the same message from both groups and they are given a plan and a pathway, a roadmap that everyone mutually supports. Together they more effectively help students overcome the unique hurdles they face in trying to get a college education.

An added bonus: The experience for the college administrators made them realize that “the lessons we were gathering were applicable more broadly to the college as a whole,” says Kleinbard— “to all the kids in the community college, not just those in the program. The college leadership definitely took that lesson from the work.”

To date, the graduation rates of the students in this program are slightly higher, at 20%, than the graduation rates at CUNY schools overall.  That’s promising. But as Kleinbard notes, one of the things he has realized over the years is that the associate’s degree is not the only outcome. “It was very tough to get to the graduations,” he said. “And there are other routes such as certificates, and students can always come back to the degree program once they have a certificate. Not everyone has to get an AA degree the first round.”

The final question, as all policymakers want to know, is: Is it “scalable”? Can it be ramped up and applied to many more community colleges?  Kleinbard thinks it is. “The costs weren’t that high,” he says, “and the codification is good enough that others can draw on it. The biggest challenge is the time it took to meet and review each student’s work. But we have protocols to make that easier.”

See also:

Academics Launch New Efforts to Retain Community College Students” (Wall Street Journal)

Reclaiming the American Dream: Community Colleges and the Nation’s Future (American Association of Community Colleges)

New data source on college attendance patterns from Harvard

 

Harvard’s  Strategic Data Project has released the first set of “Strategic Performance Indicators” used to examine college-going patterns among five districts that serve more than 500,000 high school students. The project is creating  a benchmark for school evaluations.

Among its findings: gaps in college enrollment between white and non-white students are dramatically reduced when accounting for similar socioeconomic and achievement backgrounds. For example, the gap between black and white students in college attendance overall is 15.5 percentage points. But after controlling for socioeconomic background and high school performance, black students are more likely than white students to attend college.  The gap between whites and Latinos overall is 35.3 percentage points. This drops to 14.9 percentage points after adjusting for SES and high school performance.

Also, college attendance rates vary considerably between students with similar academic qualifications who attend different high schools within a district. And a considerable number of qualified kids choose not to attend competitive colleges.

A free toolkit is available for those interested in conducting similar research. Next up: a set of indicators that look at where districts place novice teachers and how well districts retain their most effective teachers.

More information in the press release; The Quick and the Ed provides a succinct summary.


A college degree is a great leveler, but not graduate school

 

Must Read

A new study by sociologist Florencia Torche in American Journal of Sociology documents what many suspected: a college degree is indeed a great equalizer, essentially erasing the barriers that lower socioeconomic status can present. Although it is certainly the case still that those from lower socioeconomic backgrounds are under-represented in higher education, ”once people get college degrees,” the editors of the Wilson Quarterly write in a review of the study, “the power of their socioeconomic background to predict their future status and income is virtually zero.”

But that equalizing effect stops at graduate school. There the boons of high socioeconomic status reassert themselves in higher pay and other advances.

Read more at the Wilson Quarterly. For full access to the article, you must pay $14 or be a subscriber to the journal.

New online options for (not going to) college abound

 

There’s been a lot of talk lately about college– its purpose, whether it’s worth it, and how to measure what kids are learning, among others discussions. As doubts about the value of various college degrees grow with high unemployment among  young adults, some have begun to cast about for new ways of thinking about college. Many of the newest ideas tap into the freedom and possibility of online worlds. Pearson, one of the largest players in this realm, is gobbling up online learning ventures left and right (see herehere, here, and here for examples).

The latest that crossed my desk is Minerva. With $25 million in seed money from from Benchmark Capital,  the Minerva Project is creating an elite university where tuition will cost less than $20,000 per year for students. Coursework will be delivered online; students will live together. The first class of students is to start in September 2014.

As EdSurge reports:

Now former Snapfish CEO Ben Nelson, with advice from former Harvard U president Larry Summers, aims to reinvent elite universities with The Minerva Project. “Our mission is to accelerate the life trajectory of the smartest, hardest working kids in the world for our collective benefit,” he says. For less than $20K a year, Nelson plans to offer each student a unique education experience: online lectures from the world’s leading professors; specialty programs aimed at strengthening critical, analytic thinking; dorms around the world. “If I don’t know that a Minerva degree is creating substantial value, to the students, every single year, then I’m not doing my job,” Nelson declares. The doors open in September 2014.

And PayPal entrepreneur Peter Thiel is paying students to skip college altogether. He’s offering two-year, $100,000 fellowships to young adults with entrepreneurial visions (and a solid idea) to make their ideas happen. Or there’s Sebastian Thrun, who is dedicated to expanding elite education, and is offering Stanford-caliber courses for free. As he writes on his home page, “I want to democratize education. Education should be free. Accessible for all, everywhere, and any time.”

Many others are in the game as well. Peer-to-Peer University (P2P) offers a platform for people to come together on their own, design a course, and learn from each other. MIT has joined with its MITx, where MIT courses are available online. The Mozilla Foundation along with the MacArthur Foundation (who funds the Network) is creating a credentialing system (Badges for Lifelong Learning). 2tor wants to create an online extension of degrees. The list could go on.

It feels like a revolution is brewing– a revolution that fits the spirit of this current generation in many ways. As Philadelphia Inquirer columnist Karen Heller recently wrote, young adults today are looking at the world differently. They’re not corporate-bound. They’re less enamored of raw capitalism. And they’re looking at their futures in more entrepreneurial eye. Perhaps that includes their education.