African American families are savvy in finding ways to fund a college education
The majority of African American parents (82 percent) agree that a college education is important and nearly the same amount (81 percent) agree that saving for college is a high priority. However, nearly 3 out of 5 (58 percent) are concerned about paying for college and half (49 percent) are concerned about the affordability in the future, according to new research from Massachusetts Mutual Life Insurance Company (MassMutual).
MassMutual’s College Planning and Saving Study examined the attitudes, behaviors and needs of families related to planning for and funding higher education. The study provides a deeper understanding of the importance placed on education and how ethnicity affects family decisions and financial behavior.
For African American parents college is seen as the path towards high-paying careers, financial security, and respect.
“Overwhelmingly, we heard parents emphasize the importance of an education, especially in today’s world, to help their children not only secure their financial futures but to help safeguard them against discrimination and other societal woes,” said Evan Taylor, a director of multicultural markets with MassMutual. “Many view an education as a critical tool for their children to move toward more equal footing in society as a college degree is something that can never be taken away. For this reason, most parents expect their children to go to college and are savvy in finding ways to pay for it.”
Top ways to pay for college cited by African American respondents to the survey included college-sponsored scholarships (48 percent), federal student aid (42 percent), own savings (37 percent) and work-study programs (35 percent). In fact, more African Americans cited having a child participate in a work-study program as a source of funding than any other group.
Based on the study’s insights, MassMutual offers three practical tips to help African American families plan and save for college:
1. Hope is not a plan. Begin with a clear picture of your family’s finances. Then identify priorities, budget for the unexpected, and start saving as early as you can. The birth of a child is a great time to begin saving for your child’s education. Time is on your side. The money will work for you as it earns interest, which compounds over the years. There are many tools and calculators to help you figure out how much you need to save. Visit the MassMutual savings calculator.
2. Continue to be resourceful. Get your child involved in exploring scholarships, grants and work-study programs.
3. Talk early and often. Sit down with your child and talk about their dreams and aspirations before choosing a college and major. Help your child balance being realistic with aspirational when choosing what colleges to apply to. Help them think about what schools and majors will help them land a job in their chosen career after graduation. Lastly, discuss how some careers may require further education, like graduate school.
The findings of this research study come on the heels of MassMutual’s launch of its newly refreshed brand, which was designed to better reflect and build on the legacy and the core values that have guided the company since its founding. The new brand recognizes that while the world celebrates independence, true happiness comes from interdependence and our reliance on one another.
“We’re here to help educate African American parents about options for their families, and then help them make their financial goals a reality,” concluded Taylor.
MassMutual’s College Planning and Saving Study was conducted for MassMutual by New American Dimensions, LLC in December 2016 to examine the attitudes and needs of families related to education planning and funding. Qualitatively, 22 mini focus groups were conducted with five ethnic groups (Hispanic/Latino, African American/Black, Chinese American, Korean American, and Asian Indian American) in English and in-language. Quantitatively, a 20-minute online questionnaire, conducted in English, comprised 1,750 interviews; within the total number of surveys, 150 completes were obtained for each of the five ethnic groups. Both qualitative and quantitative research was conducted with men and women age 30 to 64 with children age 5 to 15 for whom they are financially responsible. Respondents also met a minimum household income requirement ($50,000+) and participate in financial decision-making for their household. Results for the total were weighted to the 2010 U.S. Census distributions for ethnicity to be representative of American families in this age and income bracket.