Most Determined, Least Informed: The Paradox of Chinese American Behavior Towards Children’s College Education Saving and Funding

Springfield, Mass., July 6, 2017 — Recognizing the importance of their children’s college education and the associated high cost, Chinese American families claim an average savings of $29,219 for college funding, according to MassMutual’s College Planning & Saving Study.  This is 53% more than the U.S. average of $19,124 and the highest among all of the ethnicities included in the study.


The study, commissioned by Massachusetts Mutual Life Insurance Company (MassMutual), examines the attitudes and needs of different ethnic groups in the U.S. with regard to college education planning and funding, analyzing cultural impact on family decision-making. The behavioral pattern of Chinese Americans is revealed to be unique and thought-provoking. 


The cultural emphasis on education is deeply rooted in Chinese Americans. Their concern for their children’s academic performance ranked the highest among all ethnicities included in the study. Chinese American parents who participated in the study, many of whom are educated working professionals, realize the value of education and hold firm that a good college education is crucial for their children’s success. 


The strong Chinese cultural belief that it is a parental duty to provide the best for their children further strengthens their commitment: paying for college is ranked as one of their top three financial priorities. Chinese American families not only have the highest average savings for college education, they also plan to contribute the most towards their child’s education.  Over 40% of Chinese parents say they plan to pay at least three-quarters of the costs, whereas just one-quarter of US families overall intend to contribute that much. . “For many Chinese American parents, paying for their children’s college is not just a responsibility but an achievement to be proud of.” said Candy Chan, Asian Markets Director with MassMutual. “So it is common that some parents start savings as soon as a child is born.”


Saving enough to avoid working in retirement and saving the maximum amount of money are also of great importance to Chinese Americans. One notable characteristic of this group is that they tend to shoulder all the responsibilities on their own. Among all the ethnic groups surveyed, Chinese American is the only group to list “personal savings account” as the primary source of college funding, while other groups consider college-sponsored scholarships first.


However, Chinese Americans appear to lack knowledge of some other college funding options. Similar to other ethnicities, IRAs and 529 Plans are most commonly known, but other methods, such as permanent life insurance and Coverdell Accounts, have a significantly lower awareness level among this group – indicating that although Chinese Americans are highly determined to fund their children's college education, they may not have fully explored the financial tools available to them. 


“There is a Chinese proverb, ‘Four ounces yields one-thousand kilos.’ Smart planning will help achieve financial goals more efficiently,” said Chan. “We honor Chinese American parents commitment and dedication to their children, and are here to provide advice on financial options for their families.” MassMutual offers three practical tips for Chinese Americans to plan and help pay for college: 


1. Balance priorities. It can be difficult when trying to save for retirement and children’s education. Talking to a financial professional can provide an objective perspective to help establish priorities, make planning easier, and maximize investment strategies. 


2. Know available options. There are many ways to help pay for college costs – for example, traditional college savings plans, grants, scholarships, investments. If you own a life insurance policy such as whole life insurance, you can use the guaranteed cash value to help fund college costs1. It would be wise to understand the pros and cons of all available options in order to make the most informed and beneficial decision.


3. Utilize free tools. The cost of college education may vary vastly in different contexts. The math behind determining how much it might cost and how much one needs to contribute every month is highly complex. There are free analytical tools that can help calculate college costs and monthly savings figures based on a consumer’s individual situation and needs, such as MassMutual’s online college savings calculator.


With the exclusive insights gained from MassMutual’s College Planning & Saving Study – as well as years of dedicated service in the Chinese community – MassMutual continues to strengthen its commitment in helping Chinese American families plan for a better financial future. Visit the MassMutual college planning calculator at or connect with a local MassMutual financial professional to learn more.


MassMutual’s College Planning & 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 meet 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.

About MassMutual

MassMutual is a leading mutual life insurance company that that is run for the benefit of its members and participating policy owners. MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, and long-term care insurance, annuities, retirement plans and other employee benefits. For more information, visit

1 Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.