Should You Pay for Your Kid's College?

by Michael on Jan 18, 2013

Photo of School Building

If you want your kids to succeed in college, you might want to help them pay for it so they can focus on studying instead of working. Right?

Well… According to a recent study that looked at the impact of parental investment on GPA and timely degree completion, it’s not that simple.

As it turns out, increased parental financial investment actually decreases GPA, though it does increase the odds of graduation within five years.

The GPA effect is relatively modest but, when combined with the graduation data, these findings suggest that students with parental support work hard enough to stay in school, but otherwise “dial down their academic efforts.”

As for the effect on graduation rates, those with no parental support in their first year had a 56.4% chance of graduating within five years vs. 65.2% for those who received $12k in parental support.

Of course, just because you don’t graduate within five years doesn’t mean you won’t graduate at all. Rather, I suspect that many of these students are just slowed by their financial constraints.

Interestingly, other sources of financial support (grants, scholarships, etc.) didn’t negatively effect student GPAs — perhaps because the students have earned this support, thereby reducing their sense of entitlement.

While this doesn’t necessarily mean you should withhold financial support from your college-aged kids, it does suggest that you should set firm expectations in terms of performance in order to earn continued support.

Source: American Sociological Review

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