Board of Governors of the Federal Reserve System

Education

Education is widely recognized as a path to higher income and greater financial well-being. The pandemic brought widespread education disruptions, including school closures for students of all ages in 2020. In 2021, K–12 schools largely returned to in-person education. At the time of the survey, most parents of primary or secondary school students reported that their youngest child was attending classes completely in person.

This shift to in-person learning likely reduced childcare responsibilities, and most parents said they preferred in-person classes over online or hybrid options. However, potentially reflecting ongoing concerns about COVID-19 transmission, some parents whose children were attending school in person in the fall of 2021 would have preferred online or hybrid classes for their child.

In contrast to the experience of K–12 students, online education remained prevalent at higher education institutions in the fall of 2021. Most higher-education students preferred at least some online classes.

Modes of Learning in Primary and Secondary School

In the fall of 2021, most parents of primary and secondary school students said their children had returned to completely in-person education after the widespread reliance on online learning in 2020.⁴⁷ At the time of the survey, 93 percent of parents with children in school said their youngest child enrolled in K–12 education was attending classes completely in person, compared to 27 percent with completely in-person classes in 2020.

Even among children attending school in person, however, disruptions occurred because of the pandemic. Over one-fourth (27 percent) of parents whose youngest child's classes were completely in person said that at least once, since the start of the school year, their child was unable to attend in person because of a pandemic-related disruption. For 7 percent of parents whose child's classes were completely in person, a disruption to in-person schooling led them to work fewer hours or take unpaid leave from work.

Though nearly all parents of K–12 students said that their child's classes were in person, lower-income parents were less likely to report in-person K–12 education than higher-income parents. Ninety percent of parents making less than $25,000 per year said that their child's classes were in person, compared with 97 percent of parents making $100,000 or more per year. Additionally, Black and Asian parents were less likely to say their child was attending school in person than White and Hispanic parents.

However, preferred modes of education also varied by income and race. Nearly 9 in 10 parents of school-age children with an annual income of $100,000 or more said they prefer completely in-person education, compared with fewer than 7 in 10 parents with an annual income under $25,000. Eighty-seven percent of White parents with school-age children said they prefer completely in-person education, higher than that seen among Black, Hispanic, or Asian parents (figure 32).

Additionally, parents' preferred mode of learning differed by the type and level of the school. Parents of children in public school were less likely (80 percent) than parents of children in private school (89 percent) to prefer completely in-person education, and parents whose youngest child is in middle or high school were less likely (76 percent) to prefer in-person class than parents with children in elementary school (84 percent).

Most parents (72 percent) felt that their child's school was taking the right level of COVID-19 precautions. Of those who did not, slightly more felt that the school was taking too few precautions (17 percent) than too many (12 percent). This is consistent with the observation that a larger share of students had in-person education than parents preferred.

Parents' views on the precautions taken by their children's schools varied along similar lines to their preferences for in-person education. Low-income parents were more likely than high-income parents to say their child's school was not taking enough precautions in light of the pandemic, and Black parents were over twice as likely as White parents to say this (figure 33).

Parents of children in public school were also more likely (18 percent) than those with children in private school (9 percent) to say their child's school was not taking enough precautions. However, parents' opinions on precautions at school did not vary by the age of their youngest child.

Some parents opted to home school their children in 2021. Just under 1 in 10 parents of school-age children said that one of their children was home schooled and not enrolled in public or private school. For most home-schooling parents, this was not because of COVID-19. Fifty-three percent said that COVID-19 concerns and school safety policies did not contribute to the decision. This is consistent with observations from other data that about half of the current rate of home schooling predated the pandemic.⁴⁸

Of those who home schooled their children for COVID-19-related reasons, most did so because of concerns about exposure at school. Thirty-seven percent of parents who home school at least one child said they do so in part because of concern about COVID-19 exposure at school. Fourteen percent said they decided to home school their child in part because the local school's safety measures were too strict.

Perceptions of Children's Performance in School

An important factor for parents as they are making work, spending, and housing decisions is the effects that these decisions have on their children. Parents may make changes in these areas that have implications for their family finances if they feel that their child is falling behind. Consequently, the survey asked parents how they felt that their child was faring as the educational environment shifted through the pandemic.

Many parents in the 2020 survey felt that the quality of their children's education had declined amid the pandemic. In 2021, parents generally said their youngest child in K–12 school was doing well, both academically and emotionally. Eighty-five percent of parents with a child in public or private school said that their child was doing well academically, 84 percent said that they were doing well socially and emotionally, and 84 percent said their child liked school. A slightly smaller majority (76 percent) said that their child was prepared for this school year.

A majority of parents with a child in public or private school also said that their child was doing better academically than in 2020. Fifty-six percent said that their child's academic performance improved, compared with 7 percent who said it declined. Similarly, a majority of parents (59 percent) said their child was doing better socially and emotionally compared with a year earlier, while many fewer parents (8 percent) said their child's social and emotional performance was worse than in 2020.

However, parents of children taking classes partially or completely online were less likely to say their child has improved socially and emotionally. Forty-three percent of parents whose youngest child was attending classes at least partially online said that their child was doing better socially and emotionally than in 2020, compared with 60 percent of parents whose youngest child was attending classes completely in person. In addition, parents of children in online or hybrid education were less likely to say that their youngest child likes school or that their child was doing well academically (figure 34). The share of parents who said their child had improved academically did not differ significantly between those with completely in-person classes and those with online or hybrid education.

While most parents said their youngest school-age child was doing well in school in the fall of 2021, parents' assessments of their child's educational performance varied by race and ethnicity. Seventy-six percent of Black parents believed their youngest child was doing well academically, lower than the share seen among the other racial and ethnic groups. Similarly, Black parents and Hispanic parents were least likely to say that their youngest child was prepared for the school year. However, the share of parents who said their child likes school did not differ significantly by race and ethnicity (table 19).

Table 19. Parent's assessment of child's performance in school (by race/ethnicity)

Parents' assessments of their children's performance in school also increased with income. Seventy-seven percent of parents with under $25,000 in income said their child is doing well academically, compared with 89 percent of parents with $100,000 or more in income. Seventy-four percent of parents earning less than $25,000 agreed that their child was doing well socially and emotionally, whereas 88 percent of parents with income of $100,000 or more agreed with this statement.

Modes of Learning in Higher Education

While primary and secondary schools largely returned to in-person classes in 2021, online learning remained prevalent at higher education institutions. More than three-fourths of students enrolled in higher education said their classes were partly or completely online. Although many postsecondary students in the 2020 survey expressed concern about the quality of online classes, 76 percent of college students in 2021 said they prefer online or hybrid education.

Bachelor's degree students were the least likely to prefer completely online education, given the situation with the pandemic. Just fewer than 3 in 10 students enrolled in bachelor's degree programs said they prefer completely online classes (table 20). In contrast, 47 percent of students in either technical and associate degree programs or graduate and professional degree programs prefer online-only education. This may reflect that technical and associate degree students, as well as graduate degree students, were more likely to be older adults who may have other responsibilities. Sixty-four percent of technical and associate degree students and 78 percent of graduate degree students were over age 24. Among bachelor's degree students, a far lower 36 percent were over age 24.

Table 20. Prefer online only education (by type of degree program)

College students generally expressed satisfaction with the amount of pandemic-related precautions taken by their school. Eight in ten postsecondary students said they thought their school was taking about the right amount of precautions, while just more than 1 in 10 said their school was not taking enough precautions.

Overall Value of Higher Education

At the time of the survey, 70 percent of adults had ever enrolled in an educational degree program beyond high school, and 36 percent had received a bachelor's degree. Self-reported financial well-being rose strongly with education, although the effects differed across demographic groups (see the "Overall Financial Well-Being" section of this report for details on financial well-being by education).

Consistent with the higher rates of financial well-being among those who have more education, more than half of adults who went to college said that the lifetime financial benefits of their higher education exceeded the financial costs. Meanwhile, one in five said that the costs are higher. The rest saw the benefits as about the same as the costs. These self-assessments of the value of education have changed little in recent years.

The self-assessed value of higher education, while generally positive, depends on several aspects of a person's educational experience. Most importantly, those who completed their program and received a degree were more likely to see net benefits than noncompleters. For example, among those who went to college but did not complete at least an associate degree, 31 percent said the benefits of their education exceeded the cost. This fraction jumped to 46 percent of those with an associate degree and 67 percent of those with at least a bachelor's degree.

The self-assessed value of higher education also differed by age. Among those with at least an associate degree, older adults were more likely than younger adults to see the benefits of their education as greater than the costs (figure 35).⁴⁹ One explanation for this result could be that older respondents have had a longer time to experience the benefit of their education than younger respondents. This variation in views on the net benefit of college may also be driven by the rising cost of higher education—people who attended college more recently likely faced a higher cost than those who attended college further in the past.⁵⁰

Additionally, the gap in valuations of higher education across age groups was wider among those with higher degree levels. Among those with an associate degree, fewer than 4 in 10 adults under age 30 said the benefits of their education exceeded the costs, compared with nearly 6 in 10 adults age 60 and over. Among those with a bachelor's degree or more, this gap was wider—56 percent of adults under age 30 thought the benefits of their education exceeded the cost, compared with 82 percent of adults age 60 and over.

One potential explanation is that younger adults are more likely to have taken out debt for their education and to be paying down these loans. Consequently, the costs of education may be more salient for them than for older adults (see the "Student Loans" section of this report for a discussion of educational debt and the self-assessment of the value of higher education).

Another contributor to differences in how people viewed their education was the type of institution attended.⁵¹ Consistent with previous years of the survey, 69 percent of those with bachelor's degrees from public institutions and 63 percent with bachelor's degrees from private not-for-profit institutions saw their educational benefits as greater than their costs. However, 43 percent of those with bachelor's degrees from for-profit institutions felt their education was worth the cost.

Look Back on Education Decisions

Another way to assess the value of education is to consider what people would have done differently if given the chance. Most people value the education they have, but with the benefit of hindsight and life experience, it is also common to think that different educational decisions could have been better.

Completing more education was the most common change that those with less education would have made if they were able to make a change. Sixty-seven percent of those without a college degree and 61 percent of those with an associate degree said they would like to have completed more education (figure 36). For those with a bachelor's degree or more, choosing a different field of study (37 percent) was the most common change they would make to their education. Few people of any education level said they would have completed less education if they could make their decisions again.

Additionally, reassessments of educational decisions varied by the type of institution attended. Slightly over half of those who attended a for-profit institution said they would have attended a different school, compared with 31 percent of those attending a private not-for-profit institution and 23 percent attending a public institution (figure 37). This difference remains even after accounting for the selectiveness of the institution, level of education completed, the parents' level of education, and demographic characteristics of the student.⁵²

The changes adults who completed at least some college said they would now make to their educational decisions were also related to the field of study they pursued. In particular, the share who said they would study a different topic in hindsight varied by fields of study. Forty-eight percent of those who studied the humanities and arts, and 46 percent of those who studied social and behavioral sciences, said they would choose a different field. In comparison, a lower share (24 percent) of those who studied engineering said they would have chosen a different field (figure 38).

 

References

 47. References to a child's education in this section refer to the individual's youngest school-age child. Parents of school-age children are respondents who lived with their own children under age 18 who were enrolled in a public or private K–12 school. Except where specified, parents who only home-school their children are excluded. Return to text

 48. The Census Household Pulse Survey indicates that, by the fall of 2020, the share of households with school-age children who home school their children was around 11 percent—about double the share who home schooled at the start of the pandemic. See https://www.census.gov/library/stories/2021/03/homeschooling-on-the-rise-during-covid-19-pandemic.html. By December 2021, the share of households with school-age children who reported home schooling in the Census Household Pulse Survey was still around 11 percent, similar to the share who reported home schooling in this year's SHED. Return to text

 49. If adults currently enrolled in higher education levels are excluded, the share of adults who say the benefits outweigh the cost increases with age at every education level. Return to text

 50. From 1995 to 2015, net tuition, fees, room, and board rose 54 percent at public four-year institutions and 29 percent at private, nonprofit, four-year institutions. See College Board, Trends in College Pricing 2014, https://research.collegeboard.org/pdf/trends-college-pricing-2014-full-report.pdf. In the current school year, net tuition, room, board, and fees at public and private nonprofit institutions are about the same as they were in the 2014–15 school year (see https://research.collegeboard.org/pdf/trends-college-pricing-student-aid-2021.pdf). Return to text

 51. Individuals do not self-report the type of institution in the survey. Instead, the institution type is assigned by matching the name and location of the college reported by the individual with data from the Center on Postsecondary Research at the Indiana University School of Education (https://cpr.indiana.edu/). For individuals who completed an associate or bachelor's degree, institution type is based on the school from which they received the degree. For other individuals, it is based on the last school attended. Return to text

 52. Selective institutions, as defined by the Carnegie Classification, are those whose first-year students' test scores are in the middle two-fifths of baccalaureate institutions; more selective institutions are in the top one-fifth of baccalaureate institutions. See also "The Carnegie Classification of Institutions of Higher Education," web page, http://carnegieclassifications.iu.edu/. The remainder are referred to here as "less selective" institutions. Return to text

* The Federal Reserve adjusted this report on February 2, 2023. Parent’s views on precautions taken by child’s school (by income and race/ethnicity),” were adjusted to match the figure values.