I had a conversation Monday night with a friend who, along with paying tuition, provided her daughter with $1,300 a month for living expenses in college. That money went to rent, meals and extras.
I felt Scrooge-like as I only gave my two older children $400 a month to cover rent once they left the college dorms and moved into shared off-campus rental apartments where they were responsible for their meals.
I didn’t pay anything else toward their related living expenses. My kids held part-time jobs so I assumed they could cover their own groceries. (One worked in a restaurant and ate there a lot, while the other made a lot of Ramen noodles, They both graduated college in less than four years, probably because they were starving. )
Turns out that my miserly ways could have had some value.
There is a fascinating new study in the American Sociological Review that shows that the more money parents pay toward college, the lower their kids’ grades.
Students from wealthy families are more likely than those from poor families to go to college, and those whose parents pay their way are more likely to graduate. But according to “More Is More or More Is Less? Parent Financial Investments During College,” a study by Laura Hamilton, a sociology professor at the University of California, Merced, greater parental contributions were linked with lower grades across all kinds of four-year institutions.
“It’s a modest effect, not big enough to make the kid flunk out of college,” said Dr. Hamilton, whose study was published in this month’s American Sociological Review. “But it was surprising because everybody has always assumed that the more you give, the better your child does.”
Dr. Hamilton suggested that students who get a blank check from their parents may not take their education as seriously as others. She became intrigued with this possibility years ago, after spending a year living in a college dormitory and observing the students, then following them through graduation and, eventually, interviewing their parents.
“Oddly, a lot of the parents who contributed the most money didn’t get the best returns on their investment,” she said. “Their students were more likely to stay and graduate, but their G.P.A.’s were mediocre at best, and some I didn’t see study even once. I wondered if that was nationally true, which led me to this quantitative study, which found that it is.”
“There were some affluent families who thought their children were spoiled and didn’t pay the whole cost, and there were some families who had scrimped and saved and borrowed from family members and taken out loans,” she said. “And the affluent families aren’t hurt the most by the lower grades, because they had the connections to call the head of NBC or the N.F.L. and get their child a job. It’s more of a problem for the middle-class parents, who worked hard to pay the college costs, used up their retirement funds and are out of money by graduation time.”
This finding backs the idea that parental financial support can act as a “moral hazard” in that students make decisions about how seriously to take their studies without having personally made the investment of cash in their educations.
The impact of parental contributions on grades was lower (but still present) at highly competitive institutions. Generally the grades were lowest for students with high levels of support from their parents at private, out-of-state and more expensive colleges.
Before parents reading this article cancel those spring semester tuition checks and Facebook message their college-age kids to get jobs, there are two important caveats to the study.
One is that the study found a positive association (even controlling for other factors) between increased parental contributions and graduation over five years. In an interview, Hamilton said that she explained this finding (even if apparently contradictory with the results on grades) because those with minimal levels of parental support have a much more difficult job paying for college, and those who can’t pay, can’t graduate. “Kids who don’t have funds, they don’t stay,” she said.