Many Gen Zers don’t see the value in advancing their higher educations as student debt soars.
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Many Gen Zers don’t see the value in a higher education anymore.A BI/YouGov survey found just 39% of them think advancing their education is important.Experts said student debt, and availability of jobs that don’t require degrees, will force colleges to adjust.
It didn’t take Sadie Shaw long to realize college wasn’t for her.
When Shaw was in high school, she said it was never a discussion on whether or not she would go to college — it was simply the reality for herself and her peers.
“It was just always something that was part of the plan,” Shaw, 22, told Business Insider. “My parents went to college, so did my brother, all my extended family went, it was just completely normal to me. And it wasn’t really until I got to college that I realized it wasn’t what I wanted to do.”
Shaw isn’t alone in her attitude toward higher education. Business Insider, in collaboration with YouGov, conducted a survey in July of more than 1,800 Americans across five generations, with more than 600 respondents belonging to Generation Z and above the age of 18.
According to the results, just 39% of Gen Z said advancing their education is important to them, and 46% of them said they don’t think college is worth the cost.
With millions of Americans holding student debt, along with a growing number of jobs no longer requiring a college degree, universities will likely need to adjust the costs of their programs — along with the types of programs they offer — to keep pace with the changing sentiment of younger generations toward the value of higher education.
If they don’t, they risk losing out on young people’s enrollment — like Shaw. She enrolled in Utah State University in 2019, and she began to take courses in business, marketing, and entrepreneurship. But as she was taking those classes, she said she was also making money off of reselling clothes online, and she “didn’t see the point of paying money to learn things she already knew” through her online business.
So two months after starting school, Shaw dropped out — and she doesn’t have a single regret. Currently making money as a TikTok creator and selling fitness plans online, along with working as a store manager at Plato’s Closet — a shop that resells gently used clothing — she said she earns more than enough to fully support herself financially.
“It has been amazing for me to not be in debt,” Shaw said. “I have no student loans, like so many of my friends are in $100,000 in debt and student loans just to get a job that pays $60,000 a year.”
“I definitely feel very thankful and privileged that I don’t have that,” she said.
The costs of college may outweigh the benefits
It’s just not worth it for some young people to pay thousands of dollars in tuition — and take on thousands more in student loans — and risk getting a job that might not even make use of their degree.
Ana Hernández Kent, a senior researcher with the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, highlighted that dilemma in November research on Gen Z’s perspectives on higher education. According to an analysis of the Federal Reserve’s 2022 Survey of Household Economics and Decisionmaking, Kent found that less than half of Gen Zers who are Black, Hispanic, women, and went to college but didn’t graduate, thought “the lifetime financial benefits of college would outweigh the costs.”
“When I’m talking to younger people of Gen Z, it seems like they’re very aware, and that might be a little bit of a shift. So instead of just a blanket approach, and assuming that they need to go to college and that it’s going to pay off, they’re much more critical,” Kent told BI.
St. Louis Federal Reserve analysis on Gen Zers attitudes toward college.
Ana Hernández Kent of St. Louis Federal Reserve.
Kent said that Gen Z is “being a little more critical” in evaluating the risks of a college degree, and whether they truly need one to be successful financially.
The availability of jobs that don’t require a college degree could also be a driving force behind Gen Z’s decision to forego a higher education. Joseph Fuller, a professor at Harvard Business School and co-lead of the school’s “Managing the Future of Work” initiative, told BI that working as truck driver, for example, could bring in six figures — and those types of wages for jobs that don’t require a college degree has spurred a rethinking of the value of a higher education.
“After the 70-year period in which policymakers and social commentators and community leaders all saying from the hymnal that you’ve gotta go to college to make it in America, that headline, that kind of postulate, has been overthrown,” Fuller said.
“That’s putting a lot of pressure on post-secondary institutions to think about ways to justify what they cost,” Fuller continued, “or to retrench so that they can live with a smaller amount of demand.”
Gov. Jared Polis explains about his supplemental budget between Lt. Governor Dianne Primavera, left, and Lauren Larson, director of Governor’s Office of State Planning & Budgeting, right, at Carriage House of Governors Mansion in Denver, Colorado on Thursday, January 3, 2023.
Hyoung Chang/The Denver Post
Colleges will have to put in the work
Some colleges have been seeing a drop in enrollment as fewer young people choose to apply and attend. According to the National Student Clearinghouse, an nonprofit that provides education data, postsecondary enrollment continues to be well below post-pandemic levels as of May, with 1.16 million fewer undergraduates enrolling compared to Spring 2020.
That means colleges will need to adjust to the sinking enrollment trends, Fuller said, or risk suffering the costs.
“They’re going to have to adopt for a steely-eyed vision that the worth would be paid for,” he said. “They’re going to have to work to demonstrate to potential students that graduates of their programs can enjoy success and a lifestyle that will support income level and support a household with a decent lifestyle.”
And some schools and states are already doing just that, Fuller said. The Texas community college system, for example, is working on implementing a structure that would determine most of its funding based on student outcomes. Colorado Gov. Jared Polis also recently announced he would be taking executive action to expand apprenticeship opportunities in his state to allow “students and workers of all ages to get the training they need to start or build careers that support them and their families.”
Fuller said he’s optimistic the US will soon start to see “a proliferation of alternatives” as colleges, students, and workers acclimate to the changing higher education landscape. Shaw said she hopes that becomes the case.
“I think there’s a lot of societal pressure, and I get a lot of hate from people that think they’re better than me because they have a degree,” Shaw said. “So I would really encourage people to base their decision on what they want, what their goals are, and not what other people think of them or what they think is normal or expected in society.”