Perceived Value of College as an Investment in Human

and Social Capital: Views of Generations X and Y

Carrie L. Johnson1, Michael Gutter2, Yilan Xu3, Soo Hyun Cho4 and
Sharon DeVaney5

1
North Dakota State University, 2University of Florida, 3University of Illinois at
Urbana-Champaign, 4South Dakota State University, 5Purdue University

This article examines the perception of college based on the investment in human or social capital. An online
survey was used to collect data. After deleting the responses from older cohorts (Baby Boomers and the Silent
Generation) and incomplete responses, the sample consisted of 1,000 adult participants who had student loans.
Similarities and differences between generations X and Y student loan borrowers were investigated. Generation
Y ranked social capital reasons for a college education higher than human capital reasons. In contrast,
Generation X ranked human capital reasons for a college education higher than social capital reasons.
Generation and perceived value of college were significantly associated with the satisfaction related to student
loans.

Keywords: millennial; generation X; generation Y; human capital; social capital

Social scientists contend that there are four generations in American society: the
Silent Generation, Baby Boomers, Generation X, and Generation Y, also known
as Millennials (Meredith & Schewe, 1994; National Endowment for Financial
Education, 2015). Generation X was born between 1965 and 1980 (Eisner, 2005).
Millennials were born between 1980 and the early 2000s. According to Pew
Research, there are more than 77 million Millennials (Taylor & Keeter, 2010).
Thus, this generation is larger than the 46 million in Generation X and
Millennials are almost equal to the 76.4 million Baby Boomers. There is a 5-year
difference in the size of generations X and Y; Generation Y, on average, had
3,850,000 born per year, while Generation X had only 3,066,667 born per year.
The Millennial generation is more racially diverse than previous generations
—47% are minorities compared to 37% minority for Generation X, 26% minority
for Baby Boomers, and 9% minority for the Silent Generation (Taylor & Keeter,
2010). More Millennials have a college degree than any other generation of

Authors’ Note: Carrie L. Johnson, PhD, AFC, Assistant Professor / Personal & Family Finance
Extension Specialist, NDSU Extension—HDFS, North Dakota State University. Michael Gutter, PhD,
Associate Dean for Extension and State Program Leader, 4-H Youth Development, Families &
Communities, University of Florida. Yilan Xu, Ph.D., Assistant Professor, Agricultural and Consumer
Economics, University of Illinois at Urbana-Champaign. Soo Hyun Cho, PhD, Associate Professor,
Department of Consumer Sciences, South Dakota State University. Sharon DeVaney, PhD, Professor
Emeritus, Purdue University. Please address correspondence to Carrie L. Johnson, PhD, AFC,
Assistant Professor / Personal & Family Finance Extension Specialist, NDSU Extension—HDFS,
North Dakota State University, 322B EML, PO Box 6050, Fargo, ND 58108;
e-mail: carrie.johnson.1@ndsu.edu.
Family and Consumer Sciences Research Journal, Vol. 45, No. 2, December 2016 193–207
DOI: 10.1111/fcsr.12195
© 2016 American Association of Family and Consumer Sciences
193
194 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

young adults. According to the Current Population Survey, 46% of 25- to 34-
year-olds received an associate’s, bachelor’s, or graduate degree in 2013 and an
additional 18% had completed some postsecondary education without receiving
a degree (Long, 2013). Millennials are also more likely to attend graduate school
than previous generations. Graduate school for 18- to 34-year-olds has increased
from 2.8% in 1995 to 3.8% in 2010. Enrollment of all students in colleges and
universities has increased over time, but more recent gains have been greatest
among Black and Hispanic students. Since 1995, enrollment for Blacks and
Hispanics, ages 18 to 34, has increased 9 and 17 percentage points, respectively
(Bailey & Dynarski, 2011).
Millennials are the first generation to have had access to computers and the
Internet during their early years and they are described as “digital natives”
(Prensky, 2001). This should provide an advantage as they pursue their
postsecondary education. However, as college enrollment grew, more students
have relied on loans to pay for postsecondary education (Choy & Berker, 2003).
The increase in the level of outstanding student debt has been attributed to
many factors such as greater enrollment, increasing numbers of students from
lower income families, rising tuition, parents’ inability to use equity in their
homes to pay for some portion of their children’s loans, and the fact that
students are taking longer to repay their loans (Bailey & Dynarski, 2011; Long,
2013).
The purpose of this study was to examine the perceived value of education
from both a human capital and social capital perspective of generations X and Y
student loan borrowers. The researchers wanted to determine whether there has
been a shift in the reasons why young adults want to obtain a postsecondary
education. The reason young adults obtain an education is important for
researchers, educators, and practitioners alike. If students’ perceptions are
changing, will it be necessary to change the way high school educators and
counselors and universities advise and market to young people? Along the lines
of monetary value, the researchers also wanted to determine whether there was
a difference in satisfaction with student loan debt (which helps to show whether
the graduates thought their education was worth the cost).

REVIEW OF LITERATURE

Human Capital

Formal education is seen as a productive investment in human capital (Olaniyan

& Okemakinde, 2008). By obtaining higher education, individuals are investing
in their future earnings. However, the cost of higher education has had an effect
on the view of those seeking a degree. A Gallup-Purdue study (2015) found that
only 50% of graduates strongly agreed that their education was worth the cost.

Student loan debt. The student loan debt has grown more rapidly than the
outstanding debts of credit cards, auto loans, and mortgages in the past decade
(Glowacki, 2012). In June 2010, total student loan outstanding debt exceeded
total credit card outstanding debt (Kantrowitz, 2010). Sixty percent of the
bachelor’s degree recipients who graduated from public and private nonprofit
institutions in 2012–2013 graduated with an average of $27,300 in student loan
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y 195

debt (College Board, 2014). By August 2015, the continually updated student
loan debt clock showed an accumulated debt total of approximately $1.29
trillion (Student Loan Debt Clock, 2015).
The size and sources of student loans have changed over generations.
Although cohort studies about student loans are scarce, the College Board’s
Trends in Student Aid series provides detailed trends of student loan amount
and composition over the past three decades (College Board, 2014). These
statistics can be matched to each cohort’s college years to shed light on the
student loan conditions faced by each generation. For instance, for the younger
Generation Xers who attended college during 1993–1998, the total student loan
amount originated in a year ranged from $31.3 billion to $47.4 billion, more than
half of which was federal subsidized loans. During this period, the unsubsidized
federal loans grew from 9% in 1993/1994 to 31% in 1997/1998. The nonfederal
loans started to emerge in 1995/1996, consisting of less than 10% of the total
loan amount at the time (College Board, 2014).
The older Generation Y, who attended college between 1998 and 2007,
witnessed a rapid growth of student loans during the period—the total student
loan amount almost doubled from $49 billion in 1998/1999 to $94.7 billion in
2006/2007. The share of subsidized federal loans declined to slightly more than
30%. This amount was exceeded by nonfederal loans, which consisted of a
quarter of the total student loan amount. Unsubsidized federal loans remained
about one-third of the total amount when older Generation Y were in college
(College Board, 2014).
Between 2008 and 2014, when the younger Generation Y attended college, the
student loan amount exceeded $100 million, reaching its historical high of $122.1
billion in 2010/2011. Nonfederal loans declined from about a quarter to less
than 10%, partially because of the credit crunch during the Great Recession. The
gap was filled by unsubsidized federal loans, which consist of half the total loan
amount at the time. Federal subsidized loans continued to fall from one-third to
a quarter of the total loan amount (College Board, 2014).
As student loans grew over the past three decades, tuition and fees also
increased steadily. Compared to the tuition and fees paid by the older
Generation Xers who attended private nonprofit 4-year college in the mid- to
late 1980s, young Generation Xers paid 1.5 times as much, older Generation Y
paid twice as much, and younger Generation Y paid 2.5 times as much. The
tuition and fees for public 4-year college grew even more, with the younger
Generation Y paying 3.25 times as much as the older Generation Xers.

Perceptions of student loan debt. Survey evidence suggested that millennial

students have considered education loans as an investment rather than a form of
debt (Chudry, Foxall, & Pallister, 2011). Utilizing the Theory of Planned
Behavior, the study demonstrated that past borrowing experience was
significantly associated with the intention to borrow among UK college students,
regardless of gender or major.
Despite the steady increase in tuition and fees, a college degree continues to
be a worthwhile investment for all age cohorts. The earning premium for college
graduates relative to high school graduates has increased for more recent
cohorts. After accounting for tuition and delayed employment, the present
discounted value of a college degree was estimated to be around $250,000 for
men and slightly above $100,000 for women who graduated from college in the
196 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

early 1980s. The premium had increased to almost $400,000 for men and
$300,000 for women in the late 1990s. For the younger Generation Y who
graduated in 2008, the premium has reached almost $600,000 for men and more
than $350,000 for women (Avery & Turner, 2012, all premiums are adjusted to
2008 dollars).
In terms of the lifetime financial wealth accumulation, both Generation X and
Generation Y seem to be more disadvantaged than their parents’ generation.
After analyzing the 1983–2010 Survey of Consumer Finances data, Steuerle,
McKernan, Ratcliffe, and Zhang (2013) suggested that the wealth of Generation
X and Generation Y is less than their parents held when their parents were in
their age group. The Great Recession’s impact on homes and retirement
accounts could be one of the causes of this difference in wealth.
A study of British Generation X college students showed a positive
relationship between level of debt and tolerance to debt (Davies & Lea, 1995).
Davies and Lea showed that being older, having an external locus of control,
and being affiliated with non-Christian religion were determinants of having
more tolerant attitudes toward debt. The results of this study are consistent with
the tenets of the life-cycle theory and also the cognitive dissonance theory, in
that younger people are expected to borrow from their future earnings. Because
the younger people are more likely to have debts, they maintain a positive
attitude toward debt to avoid dissonance (Davies & Lea, 1995).
The positive relationship between age and attitude toward debt seems
pervasive among Generation Y college students. Using a New Zealand sample
of college students in 2006, Haultain, Kemp, and Chernyshenko (2010) showed
that debt attitudes could be categorized into two factors: fear of debt and debt
utility. The fear of debt decreased with age; however, the debt utility (extent to
which students regard debt as useful) remained somewhat stable among
Millennial college students (Haultain et al., 2010).
Hornblower (1997) reported that 64% of young adults who are 18–24 years
old thought that material items (car and house) were very important to them.
Although Millennials might have had more exposure to financial education
either in high school, college, or by an employer than Generation Xers (Mottola,
2014), their level of worry over debt seemed to be similar. The National
Financial Capability Study (2012) demonstrated that both Millennials and
Generation Xers are worried about their debt levels. Fifty-five percent of
Millennials and Generation Xers who have student loans mentioned that they
may not be able to pay off their debt.
According to Huffpost (July 20, 2015), attitudes toward college debt were
more positive for Millennials than Generation X, although more money was
spent on college. Based on a survey of 500 university graduates, the same report
noted a greater proportion of Millennials (76%) compared to Generation X (68%)
thought college was worth the price. When choosing a major, the number of
people who said salary was an important factor was higher among Millennials
(33%) than Generation X (14%).
Have the socioeconomic benefits of student loans remained the same for the
Generation X and Millennial cohorts? For Millennial students with a heavy level
of student debt, the benefits of mobility and upward social mobility (future
socioeconomic outcomes) have declined. Utilizing the Federal Reserve Bank of
New York and Equifax consumer credit panel, Whitaker (2015) demonstrated
that today’s Millennial student loan borrowers are more likely to move up to
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y 197

higher income neighborhoods than nonborrowers, but the percentage was

higher for Generation X (20.4%) than for Millennials (14.5%).
It has been stated that there are distinct differences in their attitudes and
values between Generation X and Generation Y. In a qualitative study, Arnett
(2000) explored the views of the future among emerging adult Generation X. In
general, those in Generation X in their 20s said they expected to have a
successful and happy life like their parents (Arnett, 2000). Contrary to the
popular view held by journalists, Generation X were not as materialistic and
they placed financial well-being as a higher priority than other aspects in life
(Arnett, 2000). Arnett (2000) demonstrated that emerging adults ages 21–28 still
maintained high hopes for their personal futures. In terms of their occupation,
they preferred to have a job with more personal satisfaction than higher pay.
Millennials continue to view postsecondary education as very important.
According to the Clark University Poll of Emerging Adults (2015), those who
are between 21 and 29 years old (Millennials) believe that education should be
accessible to everyone and that online education can be as valuable as a
traditional form of education. However, 59% of all Millennials sampled
indicated that there was not enough financial support to get the education they
need. The same poll found that for those who pursued higher education, human
capital was the dominant reason. These reasons included having a better chance
of finding a good job, the possibility of making more money, and broadening
their knowledge of the world.

Social Capital

Portes (2000) has suggested that the first definition of social capital was
introduced by Pierre Bourdieu. The definition stated “the aggregate of the actual
or potential resources which are linked to possession of a durable network of
more or less institutionalized relationships of mutual acquaintance or
recognition.” Adler and Kwon (2002) defined social capital as the goodwill
available to individuals or groups. The source of social capital lies in the
structure and content of the actor’s social relations. Its effects flow from the
information, influence, and solidarity that social capital makes available to the
actor.
It is important to note that all social relations and social structures facilitate
some form of social capital; actors establish relationships purposefully and
continue them when they continue to provide benefits (Coleman, 1988). Social
capital is essential to current and future employment. Adler and Kwon (2002)
presented various benefits of social capital for job seekers and recruiters. The
benefits of social capital include the following: (a) It influences career success
and executive compensation; (b) it helps workers find jobs and creates a richer
pool of recruits; and (c) it assists in the creation of intellectual capital; and (d)
reduces turnover rates.
The Millennial generation has demonstrated a need to be connected to their
social pipelines, to have access to digital information, and to collaborate with their
peers (Lindbeck & Fodrey, 2010). Colleges have had to become creative with
marketing strategies to attract this age group (Han, 2014). This study examines the
decision to attend college based on the investment in human and social capital.
Similarities and differences between generations X and Y are presented to examine
trends in reasons to attend college and satisfaction with student loan debt.
198 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

METHODOLOGY

After receiving Institution Review Board permission, the researchers contracted

with Survey Sampling International (SSI) to survey the intended sample (Cho
et al., 2016). SSI provides Internet access and a small financial incentive to
members of the panel. SSI was contracted to collect 1,600 completed cases. The
survey company targeted participants between the ages of 18 and 64 who lived
in the United States. Data were collected via online survey from September 5,
2014 through September 16, 2014. It is important to note that SSI uses
participants from their existing panels of participants and that this was not
intended to be a nationally representative sample. The survey included
questions on attitude toward a student receiving a college education, student
loan history and satisfaction, and demographic characteristics.
At the beginning of this study, the intention was to investigate the beliefs of
all age cohorts. However, there were not enough observations from Baby
Boomers or Silent generations so they were deleted. A second and important
reason for removing these two generations was that the majority of them took
no student loans or very small loans to attend college. Since the purpose of the
study was to focus on reasons for college and student loan satisfaction, it was
important the respondents had a student loan.
The initial number of observations was 1,925. There were 43 that did not
have completed information, so they were deleted. Observations that were older
than generations X and Y (Baby Boomers and the Silent Generation) were also
deleted (443). Finally, 439 more observations were deleted because they were not
student loan borrowers. Of the 1,000 remaining cases, 440 were from Generation
X and 560 were from Generation Y. Nationally, generations X and Y are about
123 million with Generation X being 37% of that. In this sample, Generation X is
approximately 44%.

Measures

Participants were asked to rank the relative importance of the reasons for
attaining a college education. The list of reasons included nine options: making
more money, signaling to others that you are intelligent, having a better work
environment, enjoying the university experience, better employment
opportunities, improved skills, increased knowledge, opportunity to meet new
people, and other (participants were able to fill in their own reason). Participants
were asked to move the options up or down to create their ranking with one
being most important and nine being least important.
For this study, the researchers focused on two primary reasons for attending
college: the social capital investment or the human capital investment. Three of
the reasons, namely meeting new people, the college experience, and a better
work environment, were designated as the social capital investment. The
remaining five reasons, namely making more money, increasing skills, better
jobs, increasing knowledge, and showing that you are intelligent, were
designated as the human capital investment. For this study, “other” was not
included in the analysis. The researchers created an index for social capital by
computing the average ranking for the three social capital reasons. Also, an
index was created for human capital investment by averaging the ranks of the
five human capital reasons.
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y 199

Participants were requested to indicate the amount of their student loan by

selecting one of the following categories: 0–$9,999, $10,000–$19,999, $20,000–
$29,999, $30,000–$39,999, $40,000–$49,999, and $50,000 and above. Respondents
were then asked to rate their satisfaction with their student loans on a scale of 1
to 5 with one being very dissatisfied and five being very satisfied.
Control variables included race or ethnicity, gender, marital status, father’s
education, household income, and whether the participant had a child. Race/
ethnicity was coded as White versus other. Marital status was coded as (a) never
married, (b) married or cohabiting, or (c) divorced, separated, or widowed. The
father’s education was coded as 1 if the participant’s father had a college degree.
This variable was intended to be a measure of the socioeconomic status (SES) of
the participant’s family.

Analysis

The analyses included several steps. First, to understand the perceived value of
a college education as an investment in social capital or human capital, the
researchers examined whether there were generational differences by regressing
the indices on a generation dummy and a set of control variables. To determine
the perceived value of college, the coding was 1 for the most important reason
to attend college and 8 for the least important; hence, a positive coefficient in the
regression means “less important”.
The next step was to conduct an ordinary least-squares regression to
determine the factors related to the individual reasons that were related to each
generation in the presence of control variables. Finally, the researchers used
ordinary least-squares regression to test whether there was a generational
difference in the satisfaction with their student loans and how the perceived
value of a college education affected the loan satisfaction.

RESULTS

Descriptive Statistics

Table 1 presents a summary of demographic factors by generation. Among the

Generation X participants, 69% were White, 42% were female, 13% reported that
their father had a college degree, and 55% had a child in their household.
Marital status for Generation X participants was as follows: 60% were married
or cohabiting, 26% were never married, and 14% were divorced, separated, or
widowed. Average household income was $58,500. Student loan amounts for
Generation X were as follows: 22% reported 0–$9,999, 25% reported $10,000–
$19,999, 18% reported $20,000 to $29,999, 13% reported $30,000–$39,999, 11%
reported $40,000–$49,999, and 11% reported $50,000 and above.
The descriptive statistics for Generation Y participants were slightly different.
Whites made up a smaller share of the sample (61%), and the share of females
was slightly larger at 54%. A slightly larger share of participants (16%) reported
a father with a college degree. Half of the Generation Y (50%) were never
married, 47% were married or cohabiting, and only 3% were divorced,
separated, or widowed. The average household income was $49,100. This was
about $10,000 less than Generation X participants. The distribution of student
200 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

TABLE 1: Summary Statistics by Generation, N = 1,000

Generation X Generation Y

ALL (%) 44 56
Race (%)
White 69.3 61.4
Non-White 30.7 38.6
Gender (%)
Male 58 46
Female 42 54
Father’s education (%)
Graduate degree 13.4 15.7
No graduate degree 86.6 84.3
Dependents (%)
At least one child 55 45
No children 45 55
Marital status (%)
Married or cohabitating 60.2 46.6
Divorced, separated, or widowed 13.6 3
Never married 26.1 50.4
Loan amount (%)
$0–$9,999 22.1 20.7
$10,000–$19,999 24.6 24.8
$20,000–$29,999 18.2 20.7
$30,000–$39,999 12.7 12.9
$40,000–$49,999 10.9 8.2
$50,000+ 11.6 12.7
Household income $58,500 (M) $49,100 (M)

loan amounts was very similar; percentages were 21%, 25%, 21%, 13%, 9%, and
13% (as compared to these percentages for Generation X: 22%, 25%, 18%, 13%,
11%, and 11%).
The sample was not nationally representative but the demographic
characteristics are reasonably comparable. Nationally, Generation X is 50%
female, 62% White, and 36% are married. For Generation Y, 49% are female,
60% are White, and 21% are married (MetLife, 2013a, 2013b).
Table 2 presents loan satisfaction and the perceived value of college by
generation. The average satisfaction with the student loan amount for
Generation X participants was 3.5 on a 5-point scale (with 5 measuring very
satisfied), whereas for Generation Y, it was 2.98. There was a distinct pattern.
The human capital index was lower (approaching 1 for most important) for
Generation X suggesting that Gen X valued human capital more than
Generation Y. The social capital index as higher (approaching 8 for least
important) for Generation X than Generation Y suggesting that Gen X valued
social capital less compared to Gen Y.

OLS Regression on Value of an Education

The next step was to analyze the generational differences in the perceived
reasons for attaining a college education. Column 1 in Table 3 presents the OLS
regression results on the importance of the social capital investment. The
dependent variable is the index of the average ranking of the social capital
reasons for going to college with a value of 1 being the most important reason.
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y 201

TABLE 2: Perceived Value of College, N = 1,000

Generation X Generation Y Significance

M (SD) M (SD) t

Loan satisfaction 3.35 (1.27) 2.98 (1.22) 3.504***

Social capital reasons
Meet new people 7.06 (1.37) 6.75 (1.61) 4.373***
The college experience 5.66 (1.68) 5.65 (1.87) 0.30
Better work environment 4.29 (1.65) 4.40 (1.77) 1.088
Human capital reasons
Make more money 2.18 (1.53) 2.45 (1.84) 3.055**
Increase skills 4.58 (1.75) 4.48 (1.82) 0.515
Better jobs 3.00 (1.90) 3.24 (2.02) 1.746
Increase knowledge 4.44 (2.21) 4.3 (2.19) 0.234
Show intelligence 5.01 (2.35) 5.03 1.089
Index
Human capital 3.84 (0.53) 3.89 (0.58) 4.714*
Social capital 5.67 (0.88) 5.60 (.95) 3.717

NOTE: *p<.05; **p<.01; ***p<.001.

Therefore, a positive coefficient suggests a lower perceived value of social

investment.
The negative coefficient of 0.126 for Generation Y in Column 1 indicates
that Generation Y perceived social capital investment as a more important
reason for a college education as compared to Generation X. The estimate was
significant at the 1 percent level. The coefficient for the White dummy variable
was not significant suggesting that there was no difference by race or ethnicity.
Females perceived social capital as less important than males. Participants
whose fathers had a college degree perceived social capital as less important
than the reference group which was fathers with less education. Compared to
participants who were never married, those with other marital status perceived
social capital as more important.
Column 2 in Table 3 presents the OLS regression results on the importance of
the human capital investment. The dependent variable was the index of the
average ranking of the human capital reasons for going to college with a value
of 1 being the most important reason and 8 being the least important reason.
Generation Y perceived human capital less important than Gen Xers. The
estimate of 0.077 was significant at the 1 percent level. Compared to participants
from other races and ethnicities, White participants perceived human capital as
more important. Females and also those participants with a father with a college
education perceived human capital as more important than males and those
participants with a less-educated father. Those who were married or previously
married perceived human capital slightly less important than the never married.
Participants from higher income households were more likely to give higher
importance to social capital.

OLS Regression on Reasons for College

The next analyses focused on the specific reasons for going to college. Table 4
illustrates these reasons: Columns 1–3 for the social capital reasons and Columns
4–8 for the human capital reasons. An ordinary least-squares regression was
202 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

TABLE 3: Generational Difference in the Human Capital Versus Social Capital, N = 1,000

Social capital Human capital

b (SE) b (SE)

Member of Generation Y 0.126 (0.065)** 0.077 (0.028)***

White 0.021 (0.046) 0.003 (0.028)
Female 0.203 (0.044)*** 0.112 (0.027)***
Married or cohabitating 0.028 (0.049) 0.006 (0.030)
Divorced, separated, or widowed 0.106 (0.089) 0.053 (0.055)
Household income 0.013 (0.007) 0.006 (0.005)
Graduate education by father 0.039 (0.060) 0.036 (0.037)
R2 .016 .014

NOTE: Reference groups are Generation X, non-White, Male, Never Married, No Graduate Education
for Father.*p < .05; **p < .01; ***p < .001.

conducted on the average ranking for each of the variables including for the
reason category (i.e., social capital, human capital).
Generation Y valued “meeting new people” more than Generation X as
shown by the negative and statistically significant coefficient. Among the human
capital reasons, the Generation Y perceived “making more money” and “better
jobs” less important than Generation Y on average.
Among the control variables, race/ethnicity, gender, number of children, and
household income were statistically significant for some of the reasons for
attaining a college education. Compared to other races and ethnicities, White
participants ranked “meeting new people” higher and “making more money”
lower. Having a child was associated with higher rankings for the social capital
values of “college life” and “work environment” and lower for the human
capital values of “better skills” and “better jobs” but higher for “signaling that
you were smarter.” This suggests that a child in the household differentiates the
perspective parents have regarding the college education, toward acquiring
more of social capital rather than human capital. Females ranked “college life”
and “work environment” lower than males but females also ranked “better jobs”
and “better knowledge” higher and “signaling that you were smarter” lower
than male participants. These rankings for females suggest that the human
capital acquisition was more important as a college education value for women,
but for men, it was the social capital. This could reflect the persistent gender
earning gap for the college graduates.

OLS Regression on Student Loan Amount

The final analysis focused on satisfaction with the student loan amount. Four
models were examined. The results are presented in Table 5. In Model 1, the
variables included: a generation dummy, the social capital value, and the control
variables. In Model 2, an interaction term between social capital value and
student loan amounts was added to the model. Model 3 included a generation
dummy, the human capital variable, and the control variables. In Model 4, an
interaction term between the human capital value and the student loan amounts
was added to the Model 3.
The results from Model 1 suggested that Generation Y had lower satisfaction
with student loans than Generation X when other control variables including the
TABLE 4: Generational Difference in the Reasons to Go to College, N = 1,000

Social capital Human capital

Meet new The college Better work Make more Increase Better Increase Show
people experience environment money skills jobs knowledge intelligence
Β b b b b b b b

Member of Generation Y 0.335*** 0.058 0.015 0.286* 0.005 0.314* 0.063 0.133
White 0.230* 0.012 0.013 0.348** 0.042 0.116 0.126 0.198
Female 0.034 0.385** 0.301** 0.186 0.222 0.418*** 0.631*** 0.539***
Married or cohabitating 0.114 0.218 0.068 0.037 0.144 0.182 0.121 0.051
Divorced, separated, or widowed 0.137 0.419 0.264 0.227 0.129 0.078 0.219 0.196
At least one dependent 0.103 0.451*** 0.509*** 0.037 0.306* 0.615*** 0.538*** 0.646***
Graduate education by father 0.101 0.289 0.069 0.107 0.022 0.691*** 0.191 0.503*
Household Income 0.028 0.026 0.026 0.016 0.035 0.008 0.036 0.002
F 2.663** 4.563*** 3.696*** 2.703** 1.951* 6.963*** 4.813*** 5.247***

NOTE: Reference groups are: Generation X, Non-White, Male, Never Married, No Children, No Graduate Education for Father. *p < .05; **p < .01; ***p < .001.
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y
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204 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

TABLE 5: Generational Difference in the Student Loan Satisfaction N = 1,000

Loan Loan Loan Loan

satisfaction satisfaction satisfaction satisfaction
Model 1 Model 2 Model 3 Model 4

Demographics
Member of Gen Y 0.290*** 0.333 0.290*** 0.433
White 0.101 0.101 0.100 0.100
Married or cohabitating 0.014 0.013 0.015 0.014
Divorced, separated, or widowed 0.183 0.185 0.183 0.183
Household income 0.075*** 0.075*** 0.076*** 0.076***
Female 0.149 0.149 0.154
Children in the household 0.178* 0.179* 0.183* 0.187*
Graduate education by father 0.219* 0.219* 0.217* 0.218*
Human capital 0.196** 0.211**
Social capital 0.122** 0.119**
Loan amount
$10,000–$19,999 0.202 0.201 0.202 0.202
$20,000–$29,999 0.429*** 0.428*** 0.423*** 0.419***
$30,000–$39,999 0.412** 0.411** 0.411** 0.408**
$40,000–$49,999 0.456** 0.455** 0.452** 0.447**
$50,000+ 0.859*** 0.858*** 0.855*** 0.850***
Human capital * Generation Y 0.039
Social capital * Loan Generation Y 0.008
N = 1,000 F = 9.264*** F = 8.641*** F = 9.249*** F = 8.654***

NOTE: Reference groups are: Generation X, Non-White, Never Married, Male, No Children, No
Graduate Education for Father, $0–$9,999. *p < .05; **p < .01; ***p < .001.

social capital index were held constant. The participants who valued social
capital (higher than human capital) had a higher satisfaction with student loans.
In Model 2, when interaction terms between social capital and student loan
amounts were added, the generational difference disappeared.
The results in Model 3 show that the coefficient for Generation Y was negative
and significant suggesting lower student loan satisfaction for Generation Y
compared to Generation X, when human capital index and other control variables
were equal. The results in Model 4 show that the addition of the interaction
variables between student loan amount and human capital value caused the
generational difference to disappear. Across all of the model specifications, there
were no differences in student loan satisfaction based on race/ethnicity, gender, or
marital status. However, a higher household income, having a father with a college
education, and having a child were associated with higher satisfaction with the
student loan. Compared to participants who borrowed less than $9,999, those who
borrowed more showed lower satisfaction with the amount of their student loan.

CONCLUSIONS AND IMPLICATIONS

When looking at loan satisfaction between generations X and Y, it can be seen

that Generation X was slightly more satisfied than Generation Y. Looking at
overall debt by generation, one assumption could be that the generation that has
more student loan debt is less satisfied than the generation with less debt.
College Board (2014) explained that average student loan debt has increased
Johnson et al. / PERCEIVED VALUE OF COLLEGE OF GENERATIONS X AND Y 205

over recent decades. This study showed that 12.7% of Generation Y had more
than $50,000 in student loans which was almost 1% higher than Generation X.
A limitation of this study is that the researchers cannot be certain about the
level of satisfaction with student loan debt. Generation Y may be less satisfied
because they had not had as much time to pay down their debt and had not
experienced a financial return for their investment in education. Further research
into this topic could help to answer this question.
Also, the study did not consider the effect that loan satisfaction had on
borrowers’ overall subjective well-being. Research on this topic could be
informative. It might show whether the debt burden has additional
psychological effects on the borrowers (not just economic effects) years after
leaving school.
The results showed that Generation X had attended college for human capital
reasons (3.84 vs. 3.89 human capital index), while Generation Y had attended
college for social capital reasons (5.60 vs. 5.67 social capital index). The index
numbers themselves may not show a large difference, but by looking at
individual reasons, there were some significant differences between the two
generations. Although research has indicated that young adults attend college
for human capital reasons (Clark Poll of Emerging Adults, 2015), it has become
evident that more individuals are starting to think about social capital reasons
as well (Han, 2014). It is important for postsecondary institutions to be aware of
this shift to attract potential students and provide them with networking and
social opportunities.
Implications can be applied to employers as well. Younger workers may be
willing to make less money if they are given opportunities to build their social
capital. Network variety is social “capital” in the same sense that education and
work experience are human “capital.” All of these forms of capital yield returns
in greater employee productivity (Erickson, 2001). A study conducted in Spain
found that higher levels of social capital implied greater levels of satisfaction
and quality of life at work and that social capital was a better predictor of
quality of life at work and job satisfaction than characteristics of the worker, the
company, and the work environment (Requena, 2003). A report by Buckley,
Viechnicki, and Barua (2015) from a Deloitte survey found that Millennials
wanted businesses to focus more on people and purpose—less on profits.
With changing trends in how potential students view their postsecondary
education, high school counselors and college academic advisors should be
interested in learning that many Millennials include social capital as a primary
reason for attending college. This preference should be discussed when students
are selecting both a major and a college. Parents should be included in these
discussions because these preferences for social versus human capital are likely
to influence the cost of tuition, fees, room, and board. These preferences should
be considered when junior and seniors in high school are visiting colleges and
universities. The effect of these preferences on income over a student’s lifetime
should also be considered by students and parents.

AUTHOR’S CONTRIBUTIONS

All authors were involved in the design of the study and the development of
the manuscript. Dr. Johnson coordinated the team’s work. Dr. Gutter conducted
206 FAMILY AND CONSUMER SCIENCES RESEARCH JOURNAL

the data analysis. Dr. Johnson, Dr. Xu, Dr. Cho, and Dr. DeVaney contributed to
the review of literature, the discussion of results, and implications. This
publication is an output of the multistate research project NC2172, Behavioral
Economic and Financial Decision-Making and Information Across the Lifespan.
The activities of NC2172 are partially supported by the National Institute of
Food and Agriculture (NIFA). At the time of publication, the participating
universities (in alphabetical order) were: Iowa State University, Kansas State
University, North Dakota State University, Pennsylvania State University,
Purdue University, Rutgers University, South Dakota State University,
University of Delaware, University of Florida, University of Georgia, University
of Illinois, University of Maryland, University of Missouri, University of Rhode
Island, University of Incarnate Word, Utah State University, Virginia Polytechnic
Institute and State University.

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