AEFP Conference, March 17, 2017, Washington, DC.
High school seniors have been shown to have low levels of financial literacy, yet they are months away from important decisions about how to finance college. One contributor to low financial literacy is that students may not have observed or participated in household financial decisions with their parents. Relatedly, students may not be able to accurately state their parents’ income, though this is a key determinant of the financial aid they can qualify for. This study compares students’ knowledge about parental income to actual measures of parental income to document how accurate students are. We then explore potential causes and consequences of inaccuracy.