Post-Baccalaureate Financial Literacy and Economic Well-Being of First-Generation College Graduates
DOI:
https://doi.org/10.14738/assrj.1207.19042Keywords:
First-generation college students, Financial literacy, Financial security, Post-Baccalaureate outcomes, Higher educationAbstract
This study examines the relationship between first-generation status and post-graduation financial literacy among bachelor's degree recipients. Drawing on data from the 2012/17 Beginning Postsecondary Students Longitudinal Study (N = 7,010), multivariate regression analyses investigate disparities in financial literacy, financial behaviors, and financial security between first-generation and continuing-generation college graduates. First-generation graduates demonstrate significantly lower financial literacy scores (1.77 vs. 2.08 on a 1-3 scale, p < 0.001), with particularly pronounced deficits in investment diversification knowledge. After controlling for demographic characteristics, academic factors, and employment status, first-generation graduates score 0.161 points lower on financial literacy measures and have 33.8% lower odds of correctly answering investment diversification questions. First-generation graduates also exhibit distinctive financial behavioral patterns. Logistic regression results show first-generation graduates have 54.9% higher odds of prioritizing debt repayment, 31.5% lower odds of prioritizing savings, and 32.0% lower odds of paying credit card balances in full. First-generation status remains associated with 4.6% lower salary and 21.9% lower odds of financial security after controlling for financial behaviors and literacy. Student loan debt negatively affects financial security for all graduates, but interaction terms reveal no differential effects by first-generation status. Mediation analysis reveals that financial literacy accounts for approximately 13.2% of the relationship between first-generation status and financial security, indicating that multiple pathways contribute to these disparities. However, academic satisfaction significantly moderates this relationship, with highly satisfied first-generation students achieving financial security levels closer to continuing-generation peers. Results highlight the need for targeted interventions addressing financial knowledge gaps, behavioral patterns, and college experiences to support first-generation graduates' financial well-being.
References
Addo, F. R. (2014). Debt, cohabitation, and marriage in young adulthood. Demography, 51(5), 1677-1701. https://doi.org/10.1007/s13524-014-0333-6
Agbonlahor, O. (2025). The Limits of Educational Mobility: Examining Socioeconomic Disparities Among College Graduates by First-Generation Status. Higher Education Research, 10(3), 93-115. https://doi.org/10.11648/j.her.20251003.14
Agbonlahor, O. (2025). The Impact of Student Loan Debt on Civic Engagement: Evidence from the College and Beyond II Dataset. Education Sciences, 15(6), 764. https://doi.org/10.3390/educsci15060764
Agbonlahor, O. (2025). Necessary but not sufficient? Evolving perceptions of higher education's value across four decades. International Journal of Arts, Humanities and Social Sciences, 6(6), 29-49. https://ijahss.net/assets/files/1749831353.pdf
Archuleta, K. L., Dale, A., & Spann, S. M. (2013). College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety. Journal of Financial Counseling and Planning, 24(2), 50-62. https://files.eric.ed.gov/fulltext/EJ1043230.pdf
Arum, R., & Roksa, J. (2014). Aspiring adults adrift: Tentative transitions of college graduates. University of Chicago Press. https://press.uchicago.edu/ucp/books/book/chicago/A/bo19088566.html
Becker, G. S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago Press. https://press.uchicago.edu/ucp/books/book/chicago/H/bo3684031.html
Bourdieu, P. (1977). Outline of a theory of practice. Cambridge University Press.
Bourdieu, P. (1986). The forms of capital. In J. Richardson (Ed.), Handbook of theory and research for the sociology of education (pp. 241-258). Greenwood.
Cahalan, M., Perna, L. W., Yamashita, M., Wright, J., & Santillan, S. (2018). Indicators of higher education equity in the United States: 2018 historical trend report. Pell Institute for the Study of Opportunity in Higher Education. https://files.eric.ed.gov/fulltext/ED583543.pdf
Carnevale, A. P., Rose, S. J., & Cheah, B. (2013). The college payoff: Education, occupations, lifetime earnings. Georgetown University Center on Education and the Workforce. https://cew.georgetown.edu/cew-reports/thecollege-payoff/
Cataldi, E. F., Bennett, C. T., & Chen, X. (2018). First-generation students: College access, persistence, and postbachelor's outcomes. Stats in Brief. NCES 2018-421. National Center for Education Statistics. https://nces.ed.gov/pubs2018/2018421.pdf
Chetty, R., Friedman, J. N., Saez, E., Turner, N., & Yagan, D. (2017). Mobility report cards: The role of colleges in intergenerational mobility. NBER Working Paper No. 23618. National Bureau of Economic Research. https://www.nber.org/papers/w23618
Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94, S95-S120. https://doi.org/10.1086/228943
Consumer Financial Protection Bureau. (2015). Financial well-being: The goal of financial education. Washington, DC: Consumer Financial Protection Bureau. https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
DeAngelo, L., Franke, R., Hurtado, S., Pryor, J. H., & Tran, S. (2011). Completing college: Assessing graduation rates at four-year institutions. Higher Education Research Institute, UCLA. https://www.heri.ucla.edu/DARCU/CompletingCollege2011.pdf
Dynarski, S. (2016). The dividing line between haves and have-nots in home ownership: Education, not student debt. Evidence Speaks Reports, 1(17), 1-7. https://www.brookings.edu/wp-content/uploads/2016/07/homeownership-FINAL2b.pdf
Federal Reserve. (2020). Report on the economic well-being of U.S. households in 2019. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/publications/files/2019-report-economic-well-
Agbonlahor, O. (2025). Post-Baccalaureate Financial Literacy and Economic Well-Being of First-Generation College Graduates. Advances in Social
Federal Reserve Bank of New York. (2021). Quarterly report on household debt and credit. Center for Microeconomic Data. https://www.newyorkfed.org/microeconomics/hhdc
Fernandes, D., Lynch Jr, J. G., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8), 1861-1883. https://doi.org/10.1287/mnsc.2013.1849
FINRA Investor Education Foundation. (2019). The state of U.S. financial capability: The 2018 National Financial Capability Study. FINRA Investor Education Foundation. https://finrafoundation.org/sites/finrafoundation/files/NFCS-2018-Report-Natl-Findings.pdf
Furquim, F., Glasener, K. M., Oster, M., McCall, B. P., & DesJardins, S. L. (2017). Navigating the financial aid process: Borrowing outcomes among first-generation and non-first-generation students. The ANNALS of the American Academy of Political and Social Science, 671(1), 69-91. https://doi.org/10.1177/0002716217698119
Gerrans, P., & Heaney, R. (2019). The impact of undergraduate personal finance education on individual financial literacy, attitudes and behaviors. Accounting & Finance, 59(1), 177-217. https://doi.org/10.1111/acfi.12247
Goldrick-Rab, S. (2016). Paying the price: College costs, financial aid, and the betrayal of the American dream. University of Chicago Press. https://press.uchicago.edu/ucp/books/book/chicago/P/bo24663096.html
Gudmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of Family and Economic Issues, 32(4), 644-667. https://doi.org/10.1007/s10834-011-9275-y
Hacker, J. S. (2019). The great risk shift: The new economic insecurity and the decline of the American dream. Oxford University Press.
Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89, 309-322. https://heinonline.org/HOL/LandingPage?handle=hein.journals/fedred89&div=90&id=&page=
Houle, J. N. (2014). Disparities in debt: Parents' socioeconomic resources and young adult student loan debt. Sociology of Education, 87(1), 53-69. https://doi.org/10.1177/0038040713512213
Houle, J. N., & Berger, L. (2015). Is student loan debt discouraging homeownership among young adults? Social Service Review, 89(4), 589-621. https://doi.org/10.1086/684587
Hout, M. (2012). Social and economic returns to college education in the United States. Annual Review of Sociology, 38, 379-400. https://doi.org/10.1146/annurev.soc.012809.102503
Ishitani, T. T. (2006). Studying attrition and degree completion behavior among first-generation college students in the United States. The Journal of Higher Education, 77(5), 861-885. https://doi.org/10.1080/00221546.2006.11778947
Ishitani, T. T. (2016). First-generation students' persistence at four-year institutions. College and University, 91(3), 22-32. https://research.ebsco.com/c/jfgtwb/search/details/twjykdunxb?db=eue
Kelchen, R. (2018). Higher education accountability. Johns Hopkins University Press.
Kuh, G. D. (2008). High-impact educational practices: What they are, who has access to them, and why they matter. Association of American Colleges and Universities.
Lareau, A. (2015). Cultural knowledge and social inequality. American Sociological Review, 80(1), 1-27. https://doi.org/10.1177/0003122414565814
Lusardi, A., & Mitchell, O. S. (2007). Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205-224. https://doi.org/10.1016/j.jmoneco.2006.12.001
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44. DOI: 10.1257/jel.52.1.5
Lusardi, A., Mitchell, O. S., & Curto, V. (2010). Financial literacy among the young. Journal of Consumer Affairs, 44(2), 358-380. https://doi.org/10.1111/j.1745-6606.2010.01173.x
Manzoni, A., & Streib, J. (2019). The equalizing power of a college degree for first-generation college students: Disparities across institutions, majors, and achievement. Research in Higher Education, 60(5), 577-605. https://doi.org/10.1007/s11162-018-9523-1
Nunez, A. M., & Cuccaro-Alamin, S. (1998). First-generation students: Undergraduates whose parents never enrolled in postsecondary education. Statistical Analysis Report. Postsecondary Education Descriptive Analysis Reports. National Center for Education Statistics. https://nces.ed.gov/pubs98/98082.pdf
Pascarella, E. T., & Terenzini, P. T. (2005). How college affects students: A third decade of research (Vol. 2). Jossey-Bass.
Pascarella, E. T., Pierson, C. T., Wolniak, G. C., & Terenzini, P. T. (2004). First-generation college students: Additional evidence on college experiences and outcomes. The Journal of Higher Education, 75(3), 249-284. https://doi.org/10.1080/00221546.2004.11772256
Putnam, R. D. (2000). Bowling alone: The collapse and revival of American community. Simon & Schuster.
Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1-17. https://www.jstor.org/stable/1818907
Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470. https://doi.org/10.1007/s10964-009-9432-x
Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30(6), 708-723. https://doi.org/10.1016/j.appdev.2009.02.003
Torche, F. (2011). Is a college degree still the great equalizer? Intergenerational mobility across levels of schooling in the United States. American Journal of Sociology, 117(3), 763-807. https://doi.org/10.1086/661904
Wilbur, T. G., & Roscigno, V. J. (2016). First-generation disadvantage and college enrollment/completion. Socius, 2, 1-11. https://doi.org/10.1177/2378023116664351
Xiao, J. J., Ahn, S. Y., Serido, J., & Shim, S. (2015). Earlier financial literacy and later financial behaviour of college students. International Journal of Consumer Studies, 39(6), 588-602. https://doi.org/10.1111/ijcs.12122
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Osasohan Agbonlahor
This work is licensed under a Creative Commons Attribution 4.0 International License.
