Laura T. Hamilton, a sociology professor at the University of California, Merced, found students' GPAs decreased with increased financial support from their parents.
However, the study also found students with financial aid from their parents were more likely to complete college and earn a degree.
"Students with parental support are best described as staying out of serious academic trouble, but dialing down their academic efforts," Hamilton wrote in the study.
Over the past several decades, colleges and universities have responded to deep cuts in external funding by increasing tuition and these costs increasingly fall on the shoulders of U.S. parents.
The study, scheduled to be published in the February issue of the American Sociological Review, found parental aid increased the odds of graduating within five years, but students with no parental aid in their first year of college had a 56.4 percent predicted probability of graduating, compared with 65.2 percent for students who received $12,000 in aid from their parents.
"Regardless of class background, the toll parental aid takes on GPA is modest," Hamilton wrote. "Yet, any reduction in student GPA due to parental aid -- which is typically offered with the best of intentions -- is both surprising and important."
Hamilton said many other funding sources such as grants and scholarships, work-study, student employment, and veteran's benefits did not have negative effects on student GPA.