As companies consider offering student loan assistance to entice Millennial job seekers, they may want to consider that the newest generation entering the workforce probably won’t find the benefit as attractive—or necessary.
Generation Z’s innate facility with technology, insight into younger demographics, and focus on avoiding debt translate into thriving careers in Market Research, Finance, and Tech – as detailed in the CareerCast report. (PRNewsFoto/CareerCast)
Today’s high school students, members of Generation Z, are taking a pragmatic approach to planning and paying for their higher education – targeting schools that will lead them to the careers they seek while keeping costs in check, according to research conducted by College Savings Foundation (CSF), a Washington, D.C.- based not-for-profit organization helping American families achieve their education savings goals. Sophomores, juniors, and seniors surveyed by CSF in its eighth annual How Youth Plan to Fund College survey also appear to be relying less on external funding such as loans and scholarships and instead on their own savings and expectations for working through college.
Cost Considerations
Costs and career paths are two key elements of their college decisions, with 79 percent of students saying that costs have been a factor in determining which college to attend, and 69 percent saying that their career plans would affect their school choice.
Overall, the vast majority of students is stepping up to the prospect of paying for college, with 35 percent saying they would pay for part or all of their higher education costs and 50 percent saying they would possibly do so.
“We are pleased to see this year’s high school students demonstrate a strong appetite for making responsible cost-effective choices,” said Richard Polimeni, chair of the College Savings Foundation. “This bears out the emerging profile of Generation Z students as financially careful and debt averse.”
Tendency to Save, Avoid Debt
How are high school students planning to pay for college? The survey finds 60 percent are saving, with 22 percent of them choosing 529 college savings plans as their primary way to save. High school students appear to be modeling their parents’ behavior: 60 percent say their parents are saving, with 32 percent saving primarily in 529 college savings plans. In fact, 71 percent of those students who are primarily saving in 529s have parents who are also doing so.
“Showing children how to save for their own educational future is a powerful lesson for parents to impart. These findings demonstrate that it works,” Polimeni said.
Nearly half of all students, 49 percent, have already saved $1,000 to $5,000; and more than one-quarter, 27 percent, have saved more than $5,000.
How are they doing it? A commitment to working: 54 percent have already gotten jobs to earn money for higher education; and 85 percent say they will work during college – with 20 percent planning to work full time.
At the same time, reluctance to take on debt shows up in student responses, with 69 percent saying they are concerned about paying back student loans. This year’s survey shows a 10-point drop among students who plan to take on debt, to 11 percent from 21 percent last year. Including those who would “possibly” take on student loan debt, the number dropped to 63 percent from 71 percent. In addition, those planning to take financial aid dropped to 49 percent from 56 percent last year.
College Choice Widespread and Varied
Most students, 87 percent, have talked to their parents about their involvement in funding college. Dominating those conversations were what career path the child wants to follow (41 percent), what type of school they want to go to (public or private) (27 percent), and how college costs would be paid (19 percent).
Recruiters and hiring managers should also note that over the last several years, the CSF Youth survey has tracked an increase in students planning to attend community college – and this year it showed a jump of five percentage points, from 20 percent to 25 percent. Among students surveyed, 44 percent are choosing public college; 18 percent are choosing private college; and more than 6 percent are choosing vocational school or career programs.
Not only is career a deciding factor in student choice of school – 39 percent of students say that costs have caused them to change their higher education paths. Among these students:
- 41 percent say they are now planning to attend a state school
- 40 percent say they will attend a community college
- 9 percent will attend a vocational or career school
- 7 percent indicate that they will be working instead of attending school
College costs were also a factor for 56 percent of students in deciding to attend college part or full time.
“We are seeing a broad embrace of all kinds of education – from traditional four-year, to community college and vocational schools, as young people consider at the outset what is the best career path for them,” said Polimeni.