Most Hopeful, Least Prepared: The Dilemma of Korean American Behavior toward Children’s College Education Saving and Funding

Springfield, Mass., July 6, 2017 - Korean American families tend to place high hopes on their children securing college-sponsored scholarships, as they are less likely to be financially prepared for funding college expenses. Korean families report an average college savings of $17,343, which is lower than the national reported average of $19,124, and significantly lower than the Chinese American average of $29,219, according to the new research from Massachusetts Mutual Life Insurance Company (MassMutual).

MassMutual’s College Planning & Saving Study examines the attitudes and needs of different ethnic groups in the U.S. with regard to college education planning and funding. The study provides a deep understanding of the importance placed on education and how ethnicity affects family decisions and financial behavior.

Emphasis on education is deeply rooted in Korean American culture, and for many Korean American parents, children’s college admission is a milestone in achieving the American Dream. This mindset goes back to the educational system in South Korea, where 93% of parents expect their children to go to collegei and 70% of secondary school-aged children use private tutorsii, hoping to excel academically.  While other parents in the U.S. cite concerns about internet safety, academic performance, and paying for higher education costs, Korean Americans primary concern is the quality of their children’s K-12 education prior to college.

Despite their focus on education, Korean Americans are behind other ethnic groups in saving for college.  With about half of household spending allocated to paying current bills, many Korean American families find it difficult to save for college. In fact, 40% currently do not contribute toward their children’s college fund at all, the highest among all ethnicities surveyed, and 58% of Korean American families are counting on college-sponsored scholarships as the primary source of college funding, 12 points higher than the national average. But scholarships are not a panacea. The average U.S. college-sponsored scholarship package is less than $6,000 per year, compared to the average annual cost of $20,090 for public 4 year school tuition, which still leaves a significant gap between expectation and reality.

In exploring other college funding options, Korean American families also seem to lag behind. MassMutual's study indicates that Korean Americans have the lowest awareness of college funding options, compared to other ethnicities surveyed in the U.S., even though their household income is actually higher than the national averageiii. The fact that they rely heavily on friends and family for suggestions on financial planning may limit the amount of information they receive.

“We respect Korean Americans’ commitment to their children, and we are here to provide guidance for a more stable financial future,” said Wonhong Lee, Head of Diverse Markets with MassMutual. Here are some practical tips to start with:

 1. Be prepared. Given the fact that a college-sponsored scholarship may not cover the majority of tuition, it is likely that a large amount still needs to be financed. Starting college savings at an early age will help families ease the financial burden. Multiple ways to prepare for college costs include traditional college savings plans, grants, investments. If you own a life insurance policy such as whole life insurance, you can use the guaranteed cash valueiv to help fund college costs. Understanding the pros and cons of all available options will help make the most informed and beneficial decisions.

 2. Balance priorities.It can be difficult when juggling multiple financial obligations at the same time. Talking to a financial professional can provide a clearer perspective to help establish priorities, make planning easier, and maximize investments.

 3. Utilize free tools. The cost of college education may vary 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, such as MassMutual’s online college savings calculator, that can help calculate college costs and monthly savings figures based on a consumer’s individual situation and needs.

With the exclusive insights gained from MassMutual’s College Planning & Saving Study, as well as years of dedicated service in the Korean community, MassMutual continues to strengthen its commitment in helping Korean 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

i South Korea's Education Fever Needs Cooling, Oct 25, 2013, 
ii Asians spend seven times as much as Americans on tutoring to give their kids an edge, April 27, 2017, 
iii The Rise of Asian Americans, June 2012, Pew Research Center 
iv 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.