How much financial help for college should you give your kids?
If you want them to graduate, definitely contribute. If you want them to finish with a good GPA, ask them to pitch in, or attach some strings to your donation, according to a new study published in the American Sociological Review.
Kids may be more likely to party rather than study if they know they won't suffer any consequences. "Children may direct more effort to school when they personally feel the economic costs of poor performance," writes lead author Laura Hamilton, assistant professor of sociology at the University of California at Merced and co-author (with Elizabeth A. Armstrong) of the upcoming book Paying for the Party: How College Maintains Inequality. In other words, they need skin in the game.
Both the diploma and the grades matter – a lot. As the study notes, a good GPA can help students get into advanced degree programs and boost their earning power. And completing a degree is associated with higher paying jobs, better health, and even a higher probability of getting married.
The study, based on data from the National Center for Education Statistics, also notes that students with married parents have, on average, higher GPA's.
Family Goes Strong talked with Hamilton about her research for this study and for her upcoming book. Excerpts:
Why should parents be careful about paying for everything, with no strings attached?
The study shows that certain types of funds – like grants, scholarships, work/study – have no negative effects and often have positive effects on GPA and college completion. The problem isn't the money. It's more in the way the parents give money. Parents tend to give money in college as sort of a free gift. They assume it's their responsibility to fund the kids. They just do it, often without conversation about it or setting any standards. Often it becomes something the child feels entitled to.
But parents should foot some of the bill if they want to increase the odds that their kids will graduate.
I would try to maximize getting them to graduation. But I would do things a little differently to make sure they don't dial down their academic efforts. [Say], "I'm going to fund some of your college. This is how much it's costing. This is how much I'm paying." Let kids know how expensive it is. How hard parents work to do that is important for them to understand.
What else should parents say to their kids before just handing over the money?
"This is your responsibility. Because it's your job, I expect you to get a 3.0 or a 3.2 or a 3.5" – whatever a parent thinks is a realistic objective for their particular child. Have your child contribute even just a small amount. A small amount can even be symbolic. That kind of involvement isn't going to hurt their ability to graduate.
What should parents pay for?
I always say "selective investments." If they need some help with supplies for their art class, fund that, but don't give them money for spring break. Help try to cover the costs of an internship over the summer, but don't cover a trip that doesn't have a purpose.
What happens when moms and dads simply open their wallets?
The majority of students whose parents just threw money at them and didn't really track what their students were doing – their kids didn't do so great. They didn't leave with very good credentials.
Kids who get no financial help from parents are less likely to graduate. Why?
They leave in part because they run out of money. And they leave in part because college is not very fun if everyone around you is partying, and you're not included in the peer groups. They can't afford to stay, and they don't want to stay.
What's the ideal situation?
The best off ones were the ones whose parents had their kids pay at least a little bit and/or they said, "I'm going to pay for this, but you are going to get a 3.0 or 3.2, and if you don't, I'm going to cut your funding off. We'll take you and put you in community college where I can watch you." Some of the parents had their kids come in with scholarships, and they said, "Keep that scholarship." Maybe they got a merit scholarship for their high school GPA. A lot of times those come with GPA stipulations.
Were these results true for all kinds of colleges?
The negative effects of parental aid on GPA, where GPA goes down, that is not as strong at an elite, prestigious school, mainly because the party scene isn't as developed. There aren't as many ways to go wrong – not as many temptations – when that party scene isn't as strong. Be careful about where you send your kid to school. Look at what's going on at the school. The top 100 party list is usually a good key.
You don't recommend a full-time job, but you like to see kids work part-time or play a sport or do other activities.
They did better when they were juggling a little bit of stuff. They learned to structure their time.
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