CFED
Stay Informed!
The Inclusive Economy
Black Young Adults and College Completion
By Tiffany Anderson on 08/10/2011 @ 11:03 AM
If you could choose one thing that could most help a young person succeed in the world today, what would it be? For many Americans, college plays a vital role in achieving the American dream, and for many black young adults, earning a college education is the most important pre-requisite for success.
In light of the discrepancy between college attendance and actual college completion and the growing role education plays in fostering employability and financial security, policymakers are continually striving to create greater access and raise completion rates of low-income, minority households. Finding promising ways to promote college progress- which don’t rely on the accumulation of debt- is a growing concern, and Children’s Savings Accounts have emerged as an important strategy to help families finance college.
College-going statistics from 2007 show that 63% of white young adults between the ages of 17 and 23 were either in college or had graduated, compared to only 35% of black young adults. Research suggests that blacks who are on course to graduate from college experience increases in college debt. This ever-increasing debt can lessen the return on education, making college appear less desirable, attainable, and even out of reach for some students.
Recently our partners at the Center for Social Development released a study testing the direct effects of assets and savings on the college progress of black young adults. The results revealed that young adults with school savings as adolescents are approximately two times more likely to be on course (either as a current college student or graduate) regardless of race.
The results of the study revealed that white young adults are more likely to be on course for completing college than black young adults. Adolescent school savings is significantly related to both white and black young adults’ college progress, where net worth is not. However, parents’ savings for their child is not significantly related to college progress among white or black young adults. Only adolescents’ school savings is statistically significant to the affordability of college completion.
Other related research examines the relationship between different forms of assets and college attendance and/or graduation. In this particular study, researchers identified a number of factors – social capital, cultural capital, economic capital, and human capital – as key predictors of college attendance.
According to the study, a key barrier to attending college is black high school students’ perceived barriers to college, identified financial anxiety, and psychological barriers, such as the belief that only the wealthy can afford college. Over time, this could dampen a student’s motivation for investing effort into applying to school.
The study also recognized that the fear expressed by black children and parents of not being able to finance college was partially due to high attendance cost. This factor, the fact that black young adults earn less on average than their white peers, and the trend of black young adults’ college debt increasing over time perpetuate the negative perception of college. College-educated blacks are also more likely to borrow money to pay for college, borrow larger amounts on average, and earn less than their white counterparts; these concerns further contribute to the perception that the return on college is less than its cost.
More research is needed, and the study further suggests that researchers may want to examine whether or not academic successes achieved early-onwards amongst black young adults lessen their hesitations about pursuing college. It will be a great deal of time before researchers can test the way in which the results of the CSA research that is being conducted in Oklahoma (such as the SEED OK project) affects college completion. Accounts in SEED OK are issued at birth, and participants will not reach college age for several years to come.
In the meantime, finding other ways to test casual relationships and promoting asset-building policies are important next steps to help close the college completion gap. Children savings policies that promote asset accumulation among young adults may ameliorate the ongoing problem of increasing college debt. Various examples of CSA policies include the ASPIRE Act, Young Saver’s Accounts, 401Kids, Baby Bonds, and Plus Accounts.
For more research and resources related to CSAs and education attainment, please visit CFED’s CSA Resource Library.
Copyright © 2012 CFED – Corporation for Enterprise Development 
1200 G Street, NW Suite 400 Washington, DC 20005 202.408.9788
Powered by ARCOS | Design by Plus Three
Comments
Leave a Comment