Determinants of Parents’ College Education Saving Decisions

Korankye, T., & Kalenkoski, C. M. (2021). Determinants of Parents' College Education Saving Decisions. Journal of Personal Finance, 20(1).

19 Pages Posted: 4 Apr 2022

Date Written: October 20, 2020

Abstract


This study examines the factors associated with the decisions of U.S. households to save for the college education of their children using state-level data from the 2015 U.S. National Financial Capability Study. The results suggest that financially fragile households and those characterized by low income, low education, more children, no health insurance, and no homeownership are less likely to have college savings. Households who are willing to take financial risks and those with higher perceived financial knowledge are more likely to save for the college education of their children. Whereas bond- and loan-pricing literacy are the only components of financial literacy that are associated with a higher probability of college savings, the overall financial literacy score is associated with a lower likelihood of saving for college.

Keywords: Savings for college, financial fragility, financial literacy, post-secondary education

JEL Classification: D14, G51, G53, I12

Suggested Citation

Korankye, Thomas and Kalenkoski, Charlene M., Determinants of Parents’ College Education Saving Decisions (October 20, 2020). Korankye, T., & Kalenkoski, C. M. (2021). Determinants of Parents' College Education Saving Decisions. Journal of Personal Finance, 20(1)., Available at SSRN: https://ssrn.com/abstract=4055633

Thomas Korankye (Contact Author)

University of Arizona ( email )

650 N Park Ave
Tucson, AR 85721
United States
8067019412 (Phone)

Charlene M. Kalenkoski

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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