Second-Gen College Students Make More Money, Have Less Debt, According to New Study

College graduate smiles confidently outdoors after graduation ceremony.
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The financial benefits of having a four-year college degree are more long-term than originally thought. Whether or not your parents have a college education is a determining factor in how much money you’ll earn, according to a new study. 

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Research from the Pew Research Center, a bipartisan think tank, used data from the Federal Reserve which included the education levels of parents, CNBC reported. 

The study found that 70% of adults ages 22 to 59 who have at least one parent with at least a four-year degree have also earned a bachelor’s degree as well. Only 26% of adults who do not have college-educated parents have a bachelor’s degree. 

For adults who have two college-educated parents, that number is even higher. Of the adults with parents who have both completed college, 82% have at least a bachelor’s degree, according to Pew Research.

Financial outcome is also linked to parental education, the study concluded. CNBC noted that the median household income of first-generation college graduates was $99,600, compared to $135,800 for second-generation grads. Pew Research also found differences in median household wealth. Head of household grads whose parents went to college had $244,500 in median household wealth. That number was $152,000 for first-gen grads.

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First-gen college grads also tend to take on more debt compared to second-gen graduates, including greater amounts of student loan debt, the Pew study indicated.

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While a college education is valuable, CNBC reports, it’s not the “great equalizer,” according to Richard Fry, senior economist at the Pew Research Center. For those with only a high school diploma, having a college-educated parent made no difference.

“It’s nice to have a college-educated parent,” Fry explained. “But it really only shows up if you get a college degree yourself.”

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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