The Value of Learning for life

USA Report Key findings

60% of parents see an Parents who think they undergraduate degree or will borrow money to fund higher quali cation as their child’s essential to their child costs expect to be paying achieving important goals it off on average for in their life, and 31% think a postgraduate degree (master’s or higher) is 8.8 years 65% necessary. after their child graduates, of parents would consider and expect their child to sending their child to study be paying off their own at university abroad and, of university debt for these, 66% would be willing to pay more than it would cost to educate their 9.6 y ears child in the USA.

78% 71% 55% of parents have a speci c of parents think that a university of parents with a pre-primary occupation in mind for their child, education is unaffordable for the child think they will use a with engineering (14%), medicine majority of people. speci c education savings plan to (13%), and computer science cover their future university costs; (10%) the most popular. however, only 31% of those with The research a child at university are funding or planning to fund their contribution The Value of Education is an independent consumer research study into global education trends, commissioned by from designated savings. HSBC. The global report, Learning for life, is the second in the series and represents the views of 5,550 parents in 16 countries and territories.

The findings in this report are based on a nationally representative survey of 332 parents in the USA, who have at £¥€$ least one child aged 23 or younger currently (or soon to be) in education, and who are solely or partially responsible for making decisions about their child’s education. The research was conducted online by Ipsos MORI in March and April 2015.

All references to income refer to gross annual household income.

3 78% of parents have a specific occupation in mind for their child

Making the grade

Happiness, the proportion who say being in 10 parents rate earning a high successful in their career (21%). income (9%) or owning their own proportion rising to around four falling from nearly three in five Engineering, medicine and achievement and home (8%) among their top three in five once children enter formal (56%) at pre- level computer science are parents’ Financial security and physical goals for their children. education (79% at primary level, to less than three in 10 (28%) at top career preferences for their financial well-being well-being are also rated highly 77% at secondary and 80% at university level. children university). in parents’ hopes for their Career ambitions Most parents want a happy life children. Nearly two in five (38%) Engineers, doctors Engineering for their children – nearly three- say earning enough to enjoy a Parents’ career preferences quarters (72%) say that being comfortable life is among their top When it comes to the for their children are based on and IT experts happy in life is one of the three three goals, with this proportion occupations that parents would several factors. More than two in most important goals they would higher among mothers (44%) most like their children to go into, five (45%) take into account their Professional, science-based careers like their children to achieve as than fathers (30%). A third (33%) nearly four in five (78%) have a child’s individual strengths when – which traditionally combine adults. of parents say it is important for specific job in mind. Even parents considering a desired occupation, good income-earning potential their children to lead a healthy of very young children have given while a similar proportion with a high level of job satisfaction 14% Parents prioritise their children lifestyle. thought to their future careers. consider income-earning potential – take the top spots in parents’ fulfilling their potential over Almost three-quarters (74%) have (38%) and the level of job preferences for their children. professional success, with two Other material goals are deemed a preferred occupation for their satisfaction (37%). Engineering is the most favoured Medicine in five (40%) saying this is an less important. Less than one pre-primary school child, with this occupation, with more than one important goal, almost double Around three in 10 parents favour in 10 (14%) parents preferring it. occupations for their children that Medicine (13% of parents) and provide job security (34%), are computer science (10%) are also intellectually challenging (30%), popular. The ultimate goal parents have for their children is to be happy in life or offer a good work/life balance (29%), and nearly a quarter Medicine is a more popular 13% 72% (23%) want their children’s future preference among parents with pre- careers to deliver benefit to primary school age children (20%) society. than it is among those whose Computer Science children are currently at university 40% 38% Parents are more likely to (12%), reflecting the challenging 33% consider whether an occupation entry requirements for this career. 21% suits their child’s strengths once their children are old enough to There is a distinct gender gap when have developed their individual it comes to career preferences. talents, rising from less than Parents are more than twice as 10% Be happy Earn enough to enjoy Lead a healthy Be successful a quarter (22%) at pre-primary likely to want their daughters to go in life potential a comfortable life lifestyle in their career school level to almost two into medicine (19%) as they are thirds (66%) at university level. their sons (9%). They are, however, Conversely, parents of younger more likely to want their sons to go Q: Which, if any, of these specific children are more likely to want into engineering (19%, compared types of occupation would you most Q: What are the three most important goals that you want your child to achieve as an adult? them to go into jobs that offer to 8% for daughters) or computer like your child to go into? (Base: All A: Ranked 1, 2 or 3. (Base: All parents) high income-earning potential, science (14% and 5%). parents)

4 The Value of Education Learning for life 5 Quality, tuition fees Most parents have paid or would consider paying for additional tutoring for their children 60% and employment rate: finding the of parents think right balance their child needs an undergraduate Given the importance that parents place on their child getting a degree or higher university degree, the choice of qualification to academic institution is one for 26% 65% 43% achieve their life careful consideration. A number of different factors feed into the have paid or would goals final decision. consider paying for additional tutoring The quality of teaching is the strongest consideration – almost nine in 10 parents (89%) say this is important when choosing a university. More than four in five (81%) say the cost of tuition fees : a recipe for is important, and almost three- quarters (74%) say the university’s Have paid for additional tutoring graduate employment rate. success and happiness Have not paid, but would consider paying Other factors considered by more than three in five parents include the cost of living (66%), the university’s facilities/equipment The road to USD100,000, and a postgraduate degree or higher qualification as (64%), the flexibility of its degree degree by just over a quarter (26%). necessary for their children (65%) Q: Have you paid or would you consider paying for any additional tutoring for your programmes (63%) and its child at any of the following stages of their education: primary school, secondary achievement than those whose education academic specialism (61%). Parents who received a university stopped at secondary level or school or university? (Base: All parents) Parents see university education education themselves are more below (37%). as an essential requirement for likely to see an undergraduate Subjects matter children to achieve the goals Of parents who obtained 10 (69%) have either paid or would they wish for them. Three in While the choice of a university is advice on their child’s university consider paying for additional five (60%) parents who have important, parents also feel that education, almost two thirds tutoring during at least one stage of specific goals for their child think Nearly a third of parents think a postgraduate degree is necessary for the subject they study will have (63%) say that it gave them their children’s education. that an undergraduate degree or their children to achieve their life goals a major impact on their children’s a more realistic view of the higher qualification is necessary, future success. options available, or that they In total, over a quarter (26%) of and almost a third (31%) think learned of possibilities and parents have paid for additional a postgraduate qualification The most popular degree subjects options they had not considered tutoring at least once during their (master’s degree or higher) is are professional or science-based. . Nearly three in five say that, children’s education. Almost a needed. Over half (51%) of parents would by seeking advice, they gained quarter (24%) of parents have paid most like their children to study a better understanding of the for additional tutoring at primary Parents in more affluent one of the following four subject financial implications (59%), school level, while one in five (20%) Undergraduate degree or higher households are likely to place 60% areas at university: business, relieved their worries (59%), have paid for tutors to supplement higher value on university management and finance (15%); or increased their confidence education. Just (57%), while around half say over one in 10 (12%) have paid for education as a means to achieving Master’s degree or higher medicine (13%); engineering life goals. Almost two thirds (12%); or computer and that they avoided making tutoring for children at university. (65%) of those with a gross information sciences (11%). mistakes (51%) or that they annual household income of 31% were alerted to barriers Of parents who would not consider USD100,000 or more see an and complications they had paying for additional tutoring for undergraduate degree or higher Asking for advice overlooked previously (48%). their child, almost two thirds (65%) as necessary for their child to think their child does well in school achieve their goals, and almost Almost three in five (56%) parents Giving an without extra help, and one in two in five (38%) a postgraduate have sought advice about their five (20%) think their child already degree. In contrast, attaining at child’s university education. The extra boost spends enough time on school most popular sources of advice least an undergraduate degree is Q: What are the three most important goals that you want your child to achieve and homework. However, cost is are family members (19% of seen as necessary by less than as an adult? Q: What level of education do you think is necessary for your child to Parents are keen to provide a barrier for some, with one in five parents), friends (18%), teachers three in five (55%) parents whose achieve these goals? extra educational support for (20%) saying they cannot afford it. (17%) and careers advisors (16%). household income is less than (Base: Parents who have specific goals for their children to achieve as adults) their children. Nearly seven in

6 The Value of Education Learning for life 7 to have a postgraduate degree. homework, while a quarter (25%) Nearly half of parents whose These proportions are lower (43% think they spend too much time highest level of education is 50% and 40% respectively) among on it. At primary school level, secondary school or below (46%) parents whose children are around one in five thinking their or university undergraduate (49%) primary school age or younger. child spends too much or too little think that university offers poor of parents think their time on homework (21% and value for money. This falls to under child’s generation In this perceived tougher 18% respectively). a third (31%) of parents who faces a tougher job job market, pure academic studied to postgraduate level. achievement is no longer seen market than they did as enough to give children a : could Of parents who say a university competitive edge: parents expect do better education represents poor value, universities to equip their children over half believe it does not with a broader set of abilities. Given the large number of parents do enough to enhance career hoping that their children will prospects (55%), or that it does Almost half (47%) of parents rank study to university level, a key not teach skills that are applicable learning to live independently question is whether universities in the real world (54%). within the three most valuable offer a good return on investment. aspects of university in preparing Many parents believe this is not By not equipping students with students for life after graduation. the case – more than two in the right skills to stand out in the While course-specific skills are five (42%) of them think that a job market, universities risk failing also valued highly (36% of parents university education offers poor to meet the demands of the rank this in the top three), a value for money. modern world. similar proportion of parents value non-academic softer skills such as learning to work and study independently (38%), developing analytical thinking skills (37%) or Many parents think a university education offers poor value for money enhanced confidence/social skills (34%).

Getting the Sound foundations balance right Parents are divided on whether university students work too hard for a successful life or not hard enough. Too little time spent studying could mean they fail to learn important course- specific skills, while too much could mean they do not have More than four in five (84%) was for their own generation. The path to time to develop the softer skills parents think that their children More than two in five (42%) they need to succeed in the job adulthood excelling academically is believe that it is more necessary market. important, while a similar to have a postgraduate degree to proportion think that less stand out in the job market. Parents view university as a rite One in five (20%) of parents with academic benefits such as of passage into adulthood for their a child at university say that their 42% becoming socially confident (82%) Only around one in five think the children. Non-academic softer child spends too much time on or developing strong leadership job market was tougher (16%) or think university skills – such as the ability to live independent study outside their skills (79%) are key to the that a postgraduate degree was offers poor value independently, to manage money taught classes, while more than university experience. more necessary (21%) for their responsibly and to socialise with one in 10 (14%) think they do not for money own generation. confidence – are seen as equally spend enough time on it. Parents important or even more important are more inclined to think that Wider skills for a Parents of older children are than traditional academic learning. their sons do not spend enough particularly likely to think their tougher market time on university studies (26%) child’s generation has it tougher For nearly nine in 10 parents, than their daughters (3%). what is most important for Parents see the job market than they did. Among those with a child at university, almost two their children to gain from their as increasingly competitive, Parents with younger children thirds (66%) think that their child’s university education is that they regardless of the educational are similarly divided on whether generation faces a harder time become independent (88%) or stage of their children. Half (50%) their children are working hard finding a job than did their own learn to be financially responsible think it is harder for their child’s enough. Nearly three in 10 (29%) generation, and almost half (46%) (87%). generation to find a job after think their secondary school child Q: Do you think a university education in your country offers good value for money, think that it is more necessary finishing their education than it does not spend enough time on or not? A: Fairly or very poor value for money. (Base: All parents)

8 The Value of Education Learning for life 9 Among those parents who have Getting a job while at university is Loans to study not yet saved anything towards one way for children to fund their the cost of their child’s university university education. Over half 71% Borrowing money is the main education, more than three in five (55%) of parents think that their means by which parents expect (63%) say they did not have enough children will have to work, or say their children to help fund their of parents think a money left to do so after paying they are currently working, either university studies. Almost three day-to-day bills, while one in five part time or full time, while they university education in five (59%) parents think their (20%) say they had just not given it are studying. is unaffordable for children will need to take on debt any thought. to do this, or say they already have. most people Three in 10 (30%) parents think their children will save up to This borrowing consists primarily The need to borrow contribute towards the cost of of specific student loans (51%); their own university education, or however, other general borrowing, The struggle to save leads many say their university age children such as personal loans or credit parents to seek to borrow money are using or expect to use their cards, also plays a role (22%). to fund university education. own savings to contribute.

Three in 10 (30%) parents of Parents expect their children to be pre-primary school children who repaying their own university debt are expecting their children to go on average for 9.6 years after they to university think they will have finish their university education. to take out a loan, close to the proportion (34%) of parents whose children are currently at university who have taken out a loan or Parents expect their own and their children’s university debts will take expect to have to do so. years to repay

Parents who expect to borrow, or are currently borrowing, to pay for university costs recognise the implications, expecting to spend on average 8.8 years repaying the debt after their children have finished Funding the future their education. First steps 8.8 Out of reach contribute to their tuition fees proportion (62%) of parents with to financial years 9.6 and/or living costs. Among children currently at university say years parents who already have a child their children are actually making independence Although some parents doubt at university, a lower proportion or expected to make a financial Parents' whether going to university offers (84%) say that they are currently contribution. Learning to become financially Children's good value for money, many debt contributing or plan to contribute responsible – which 87% of others see it as a pathway to debt to the cost. parents believe to be an important future success for their children. The need to save benefit of a university education – However, a university education Almost three in 10 (29%) can start with children contributing comes at a significant cost – parents whose children are yet Parents recognise the need to to the cost of their own university which is not always seen as being to reach university anticipate save to help pay for their child’s studies. within financial reach. that grandparents will share the university education – but many financial burden. This is almost do not put this into action. For many parents, the expectation Indeed, more than seven in 10 three times higher than the that children will contribute to their (71%) parents think that university proportion (11%) of parents with More than half (55%) parents of own university costs exists before is unaffordable for most people. children currently at university pre-primary school children think they even begin primary school they will fund their children’s education. Almost two thirds (65%) who say that grandparents are Q: You mentioned that you/your partner are funding or expect to fund your child’s future university costs through a of parents with a pre-primary school Who pays? contributing or expected to university costs through borrowing. How long do you expect it to take to pay off this specific education savings plan. child expect that, once their child contribute. debt once your child finishes their university education? (Base: Parents who expect However, among parents whose reaches university, that child will When it comes to funding a to borrow money or have borrowed money to fund their child’s university education) children are currently at university, personally contribute to their own university education, it is typically More than three in five (63%) less than a third (31%) are using tuition fees and/or living costs. A parents who provide the money. parents whose children are Q: You mentioned that your child is funding or expected to fund their university or plan to use a designated similar proportion (62%) of parents in secondary school or below costs through borrowing. How long do you expect it to take them to pay off this savings fund. with a child at university say that Nearly nine in 10 (91%) parents expect their children to contribute debt once they finish their university education? (Base: Parents who expect their their child is actually contributing or who are expecting their children towards their own future children to borrow money or whose children have borrowed money to fund their expected to contribute. to go to university plan to university costs, while a similar own university education)

10 The Value of Education Learning for life 11 Not wanting their child to be far five (18%) parents think that the from home is a more prevalent USA offers a superior university 65% reason for not sending them to education. university abroad among mothers (35%) than fathers (18%), and of parents would more parents feel this way about Worth paying more consider sending their daughter (34%) than their The benefits to be gained from their child to son (21%). Fathers are more likely to think that their children studying abroad come at a cost. university abroad going to university abroad is not Almost two thirds (66%) of worth the money (41%) or will not parents who are open to the deliver any benefit (30%), while idea of an international university mothers are less likely to share education would consider paying these opinions (16% and 17% more for it than they would to respectively). educate their children in the USA. A third (33%) would consider The quality of education available paying at least a quarter more, is also a factor in deterring some while nearly one in five (18%) parents from considering an would consider paying at least half international university education as much again for their children to for their children; almost one in go to university abroad.

Broadening horizons: Parents’ hopes of an international university education for their higher education abroad children vary with age

77% Increasing Parents see important Parents’ ambitions for an experiences to be gained by international university education 68% opportunities students who take advantage vary according to the age of their 64% of this increased opportunity children. Although more than Over a third (36%) of parents to study at university abroad. three-quarters (77%) of parents believe that their children’s More than seven in 10 (71%) with pre-primary school children generation has more opportunity rate students becoming more would consider sending their 49% to study or travel abroad than knowledgeable about the child abroad to university, the their own generation did at the wider world as a key benefit of proportion is smaller for parents same age. a university education, while with older children, with around nearly two in five (38%) believe two thirds of parents whose Less than one in five (18%) that learning to speak another children are currently in primary say that this opportunity was language is important, and three school (68%) or secondary greater for their own generation, in 10 (30%) value students getting school (64%), and less than half while the remainder (46%) think the opportunity to live abroad and (49%) of parents whose children that the level of opportunity is to experience different cultures. are at university, saying they the same for their children’s are considering an international generation as it was for theirs. Given these benefits, it is university education. not surprising that nearly two The difference between thirds (65%) of parents would Cost is a barrier generations is particularly strong consider sending their child Pre-primary Primary Secondary University among parents of older children. abroad to university, for either undergraduate or postgraduate For parents who would not More than half (55%) of parents consider sending their child to with a child at university think study. This rises to over three- Current of child quarters (77%) of parents in study at university abroad, the there is more opportunity for main barriers are that they do not their child’s generation to travel or households with a gross annual income of USD100,000 or more, want their child to be so far away study abroad. Among those with from home (27%), they do not a child of primary school age or compared to less than three in five (58%) parents with a think it is worth the money (27%), Q: Would you consider sending your child to university abroad, for either younger, less than a third (31%) they do not think it delivers any undergraduate or postgraduate study? A: Yes. think their child’s generation has household income of less than USD100,000. benefit (23%), or that they would (Base: Parents who expect their children to go to or whose children are currently more opportunity. like to but cannot afford it (22%). at university)

12 The Value of Education Learning for life 13 Practical steps for planning your child’s education

Here are some important insights and practical actions drawn from the research findings, for parents to consider when planning for their children’s education.

Plan for higher ambitions Almost a third (31%) of parents say a postgraduate qualification is a necessity for their children to achieve important goals in their lives.

Think about the financial implications of your children staying at university for longer, and have a plan 1 for meeting these costs.

Ask for advice More than three in five (63%) parents who sought advice about their children’s university education say that they learned about possibilities and options they had not considered, while almost half (48%) became aware of barriers and complications they had overlooked. 2 Don’t be afraid to seek advice. Make the most of the many resources available to give yourself a better idea of the opportunities and pitfalls involved in making university choices.

Allow for extra Almost a quarter (24%) of parents have paid for additional tutoring for their primary school children. However, one in five (20%) parents who would not consider tutoring say this is due to the cost.

Be sure to allocate sufficient money to support your child’s educational development from the earliest 3 stages.

Encourage independence More than four in five parents say that becoming independent (88%) or learning to become financially responsible (87%) are important benefits of a university education. More than three in five (62%) children currently at university are helping or planning to help fund their education through saving, 4 borrowing, paid work or other means. Becoming financially responsible is an essential step towards adulthood. Start teaching your children how to manage their finances from an early age.

Save more, repay quicker Parents anticipate that money they borrow to fund their child’s university costs will take an average of 8.8 years to repay. Over half (55%) of parents with a pre-primary school child think they will use a specific education savings plan to cover their future costs; however, only 31% of those with a child 5 currently at university are using or planning to use a designated savings fund. To minimise the impact of borrowing, start saving early and don’t let your plans get derailed.

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