Males were 31 percent less likely to get a loan for a child, compared to females

Table 8 provides the results of a binary logistic regression showing the likelihood of getting loans to finance a child’s college education, showing a step progression of how the model evolved with different control variables

Lastly, percent of respondents had high financial literacy; percent of whom did not have student debt, and 8.76 percent of them did. There is an association between financial literacy and student debt.

Empirical Results

Table 7 provides the results of a binary logistic regression showing the likelihood of respondents using an education savings vehicle. It shows a step progression of how the model evolved with different control variables.

Column A of Table 7 only controlled for parent’s student debt, and this research found that parents who have student debt are 73 percent less likely to use an education savings vehicle.

Column B controlled solely for high financial literacy, and the research found that parents who have high financial literacy are 385 percent more likely to use an education savings vehicle. Column C controlled for parent’s student debt and high financial literacy. In this https://www.getbadcreditloan.com/payday-loans-ma/newton/ model, parents with student debt are 75 percent less likely to use an education savings vehicle, and parents with high financial literacy are 393 percent more likely to use an education saving vehicle.

It is important to note that all the control variables for the first three columns are statistically significant. The last column, E, which contains all the variables for the final model, shows that parents with student debt are 67 percent less likely to use educational saving vehicles for their children. Parents with high financial literacy were 98 percent more likely to use educational saving vehicles for their children. Gender was not statistically significant. Blacks were 55 percent less likely to use educational saving vehicles for their children compared to the reference group (non-black, non-Hispanic), and Hispanics were 73 percent less likely to use educational saving vehicles for their children compared to the reference group.

Parents with a college degree were 298 percent more likely to utilize educational saving vehicles than parents without a college degree. Respondents who are married were 259 percent more likely to utilize educational saving vehicles than those who are not married. Increasing age by one year represented an 11 percent decline in the odds of using educational saving vehicles for children. Increasing one unit of net worth meant a 31 percent increase in the odds of using educational saving vehicles for children. Net income was not statistically significant in this model. The R-squared of this final model is 0.2796.

In column A, the study controlled only for parent’s student debt, the variable was not statistically significant. In column B the study controlled exclusively for high financial literacy and observed that parents with high financial literacy were 35 percent more likely to get a loan to finance his or her child’s college. In column C, the study controlled for parent’s student debt and high financial literacy. The research found that parent’s student debt remained statistically insignificant and the results for high financial literacy remained the same.

The final model showed that parent’s student debt and high financial literacy were not statistically significant. Race, age, and college degree were also not statistically significant in the model. Parents who are married were 127 percent more likely to get a loan for a child compared to parents that are not married. A unit increase in net worth resulted in an 8 percent increase in the odds of getting a loan for children. Increasing income by a unit resulted in a 9 percent increase in odds of getting a loan for children. The R-squared of this model is 0.0746.