The Role of Parent-Child Discussion about College Plans in Linking Parental College Savings to Low-SES Students' College Attendance

Asset-building approaches, college savings in particular, have received considerable attention as a promising financial aid strategy to empower disadvantaged students to maximize future expectations and to access higher education. Studies based on asset theory show that having college savings could be a positive contextual cue, giving low-SES students hope to have a way to finance their future education. However, if students do not know the presence of parental college savings, it is less likely to affect their college expectations and college attendance. Given this, parent-child discussion about college plans would be an important linking mechanism between college savings and college attendance.

Through conversation students are provided with information about college and recognize whether or not parents set aside money for their higher education.  However, if parents have inaccurate information about college or recognize the insufficient balance in their savings accounts, the discussions may have a negative effect on children’s expectations and effort. To date, relatively little work has been done examining the possible interaction effect of discussion about college on the association between college savings and college attendance.     

To fill the literature gap, this study has two research questions: (1) Does the impact of college savings on college attendance differ by SES? (2) Does parent-child discussion about college plans moderate the relationship between college savings and college attendance?

This study used binary logistic regressions to test the research questions with data from the Education Longitudinal Study of 2002/06. The study sample includes 4,825 students from all major racial/ethnic groups who were 10th graders in 2002. To test for interaction effects, the interaction term (college savings* parent-child discussion) was added in the regression models. A multiple imputation approach was applied to deal with missing data. Students were asked in 2004 how often they discuss going to college with their parents (no college discussion= 0; discussing college=1). Attending any type of college by 2006 is a dependent variable.          

Findings of this study show that while the positive relationship between college savings and college attendance is found within the high-SES group, college saving is not a significant predictor for low-SES group. This insignificant effect for low-SES students is unexpected, but could be explained in several ways.  As for the interaction effects, while the college discussion has positive influence on the saving-college attendance association for high-SES group, the discussion negatively affect the association between college savings and college attendance for low-SES group. 

Overall, this study shows the importance of parent-child discussions about college and college savings to improve college attendance. Considering the negative impact of college discussions for the low-SES group, it is crucial to provide adequate information about the college going process and available financial aid to encourage parent-child discussions. As for the college savings, the presence of general college savings itself seems to be not enough to make a significant change in low-SES students’ college attendance. That is, to make college savings programs work effectively, a more dedicated and structured form of special savings accounts, such as Child Development Accounts are required.