Study Explores Parental Wealth and College Outcomes

A new study by researchers at Duke University and the University of Massachusetts at Boston exploits an intergenerational database of Americans to explore the connection between parental income and wealth and college outcomes. Among the findings of the study, released by the National Bureau of Economic Research (abstract here):

• Young people whose parents get a boost in income and housing wealth are likelier than other students to enroll in college, in large part because the parents in turn increase their financial support for the children.
• Increased parental housing wealth also correlates to a greater likelihood of graduating from college, mostly because the parents take out home equity loans. Increases in parental income appear to have no such effect on graduation.
• Evidence from the study suggests that parents who help finance their children's college going increases the parents' mortgage debt, without lowering the student-debt levels of their offspring.