Answer: The right answer is U.S.-born children of at least one foreign-born parent.
Explanation: Just to elaborate a little on the answer, it can be added that the phrase is ambiguous and can create some confusion, since it could be thought that since they are the second generation, their parents, that is, the first generation, were also born in the U.S. There are other terms that describe other individuals, such as first-generation, 1.5 generation, 2.5 generation and so on.