Half of young Americans say college is too expensive and no longer necessary
Half of young Americans say college is too
expensive and no longer necessary
With
rising tuition costs, some aren’t going to college, and more are working jobs
on the side
In the spring of her senior year of high school, Malavika Vivek
had four choices: Caltech, UC Berkeley, Carnegie Mellon, or solutions architect
at software company Avasoft Inc.
She chose Avasoft.
Vivek had been working for the company part-time while at a
magnet engineering-focused high school in Edison, N.J. When she was offered a
full-time position, she couldn’t pass up the opportunity.
“I definitely thought about going to college because those
schools are all really good. But in the end, I knew I would learn more
discovering things on my own and working in the real world,” Vivek told
MarketWatch.
At 19 years old, Vivek
belongs to Generation Z. And while her experience isn’t yet common, Gen Z is
becoming more open to doing college differently or not going at all, according
to a new study by TD
Ameritrade.
The study surveyed over 3,000 U.S. teens and adults, including
approximately 1,000 Gen Z (ages 15 to 21), 1,000 young millennials (ages 22 to
28), and 1,000 parents (ages 30 to 60).
About one in five Gen Z and young millennials say they may
choose not to go to college. Many others see a less conventional path through
education as a good idea. Over 30% of Gen Z — and 18% of young millennials —
said they have considered taking a gap year between high school and college.
What’s more, 89% of Gen Z, along with nearly 79% of young
millennials, have considered an education path that looks different from a
four-year degree directly out of high school. For millennials, that’s up 18%
from 2017. (Gen Z was not surveyed in 2017.)
“There are more options today,” Dara Luber, a senior retirement
manager at TD Ameritrade, told MarketWatch. “More students are looking at
online courses, doing classes at community college, commuting from home, or
going to a trade school.”
Approximately 19.9
million students will attend college in the fall of 2019, according to the
National Center for Education Statistics, down from 20.3 million
a decade ago when some people likely decided to further their education during
the Great Recession.
While college
attendance has risen from 14.8 million two decades ago, the NCES expects it to
remain relatively steady over the next five years. But the $1.5 trillion in student debt has
given younger students pause for thought.
The burden of student debt
The average borrower now leaves college with about $37,000 of
loan debt, up more than $10,000 from 10
years ago. And outstanding student debt owed by all borrowers reached $1.5 trillion
in 2018. That’s nearly three times as high the collective $600 billion owed one decade prior.
“Rising college expenses are changing the modern college
experience,” Luber said.
Just over one in four young millennials say they are delaying
college due to the cost, according to the TD Ameritrade study. That’s up 7%
from 2017. And 73% of Gen Z and young Americans say “they chose or would choose
a less expensive college to avoid debt,” the study found.
“Paying for an education in America is ridiculously expensive,
and I think that’s a huge reason why a lot of people in our generation are
reconsidering if it’s actually worth it,” Vivek said.
Is a college degree necessary?
Parents still think so. Nearly all — 96% — of parents surveyed
in the TD Ameritrade study said they do expect their kids to go to college. But
a lot of young Americans don’t think a four-year degree is essential. About
half — 49% — of young millennials said their degree was “very or somewhat
unimportant” to their current job. Only 27% of parents said the same.
Vivek said she was studying “almost college-level” engineering
in high school but never thought skipping out on college was an option until
the summer after her junior year. That summer, she conducted computational
biology research at Memorial Sloan Kettering hospital. “I realized I really
didn’t need a degree to do the work that I was doing and that you can make an
impact without a degree.”
Working at Avasoft during her senior year further convinced her
that a college degree may not be worth her time.
“I could either pay money and not get real-world experience, or
I could earn money and get work experience,” she thought to herself when making
the final decision to continue at Avasoft instead of heading to Caltech.
“More students are working in college today than two years ago,”
Luber added. More than a third of young millennials and 48% of Gen Z say a
part-time job helps them pay for their education. “A lot of people my age I
know in college are working side hustles or even full-blown jobs,” Vivek said.
“I think it’s becoming a lot more common.”
Life without college
Since starting full-time at Avasoft, Vivek has been
“extraordinarily happy,” she told MarketWatch. “I feel like I fit better in the
‘real world’ than I did in school,” she said.
But her first year at the company has come with some social
challenges. “I lived alone in India for six months because 90% of the team I
manage are developers based out of India. I was definitely cut off from a lot
of people my own age there.”
She’s now living in Germany while she works with one of
Avasoft’s clients, a European pharmaceutical company. She says social media has
allowed her to keep in touch with a lot of her friends from home, but even
then, their lives are quite different from hers.
“Having money on the line and having clients is a different kind
of pressure that most people my age can’t relate to,” she said.
As for her future, Vivek wants to stick with Avasoft for at
least the next year, and possibly longer. After that, she’s not sure where
she’ll end up. “You never know what opportunities will come up.”
Among her generation, she agrees that “there’s a growing
attitude that college isn’t necessary or that it won’t make or break your
future.”
And she predicts the number of kids jumping directly into the
workforce is only going to increase. “A lot of young people have asked me how I
did it, or even just how to work during a gap year — I think it’s all going to
become more common.”
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