Race, Gender, and Parental College Savings: Assessing Economic and Academic Factors

This article assesses the relationships between race, gender, and parental college savings. Some prior studies have investigated race differences in parental college savings, yet none have taken an intersectional approach, and most of these studies were conducted with cohorts of students who predate key demographic changes among U.S. college goers (e.g., the reversal of the gender gap in college completion). Drawing on theories of parental investment and data from the High School Longitudinal Study of 2009 (HSLS:09), we show that both race and gender are associated with whether parents save for college, as well as how much they save. Both black boys and black girls experience savings disadvantages relative to their white peers. However, black girls experience particularly striking disparities: Black girls with the strongest academic credentials receive savings equivalent to black girls with the weakest academic credentials. Results suggest this is due, at least in part, to the fact that high-achieving black girls tend to come from families that are much less well-off than high achievers in other race-gender groups. As a result, parents of black girls frequently rely on funding sources other than their own earnings or savings to pay for their children’s college. These funding sources include private loans that may pose financial challenges for black girls and their families across generations, thus deepening inequalities along the lines of gender, race, and class. These findings demonstrate the power of taking an intersectional approach to the study of higher education in general and college funding in particular.

Race, Gender, and Parental College Savings: Assessing Economic and Academic Factors

This article assesses the relationships between race, gender, and parental college savings. Although some prior studies have investigated race differences in parental college savings, none have taken an intersectional approach, and most of these studies were conducted with cohorts of students who pre-date key demographic changes among U.S. college-goers (such as the reversal of the gender gap in college completion). Drawing on theories of parental investment and data from the High School Longitudinal Study of 2009 (HSLS:09), we show that both race and gender are associated with whether parents save for college, as well as how much they save. Both Black boys and Black girls experience savings disadvantages relative to their White peers. However, particularly striking disparities face Black girls: Black girls with the strongest academic credentials receive savings equivalent to those with the weakest academic credentials. Results suggest that this in due, at least in part, to the fact that high-achieving Black girls tend to come from families that are much less well-off than high achievers in other race-gender groups. As a result, parents of Black girls frequently rely on funding sources other than their own earnings or savings to pay for their children’s college. These include private loans that may pose financial challenges for Black girls and their families across generations, thus deepening inequalities along the lines of gender, race, and class. These findings demonstrate the power of taking an intersectional approach to the study of higher education in general and college funding in particular.

Employer Matching Contributions to Section 529 College Savings Plans

The alarming increase of higher education and the resulting growth of student debt in recent years has resulted in a number of employers adopting programs to assist employees with 529 college savings plans. However, the design or adoption of such plans is complicated. They are 529 prepaid tuition plans, educational savings plans or Coverdell Educational Savings Accounts. Many states offer tax deductions, tax credits or grants. Fees and expenses vary significantly among the different types of plans and from state to state as does investment performance. This article examines these matters from the perspective of an employer considering the adoption of a 529 or other college savings plan as an employee benefit.