Millennials, the most educated generation in America’s history, are starting to question the value of a college education. A COUNTRY Financial survey released Tuesday found that only 64 percent of 18 to 29-year-olds think college is a good financial investment, a steep decline of 13 points from last year.
The rising costs of tuition and the tough job market are inevitably casting those seeds of doubt among this traditionally optimistic and pro-education group.
With student loans looming over their heads, many Millennials wish they could turn back the clock and re-do their college education. Chanelle Schneider, a Millennial in Washington, D.C., says going to college on loans, rather than saving and paying cash for her education, was the “worst decision (she’s) made thus far in life.” Her only debt is student loans.
“Every time something good happens I’m beaten back by phone calls from Sallie Mae wanting money – money that I don’t have. Why don’t I have this money? Because I went to college with the assumption that I would graduate and get a job that would pay well enough to pay back the loans I took out,” writes Schneider on her blog, There From Here.
Schneider is not alone. Of the 37 percent of 18-29 year-olds who borrowed money to go to college, 59 percent have not paid off their loans, according to the COUNTRY Financial data.
This doesn’t mean all these Millennials are necessarily expecting too much money for an entry-level job their college education should land them. In many cases, they are struggling just to find an entry-level job.
Gen Y’ers, like Ty Unglebower in Maryland, say they didn’t expect to “walk up to (his) dream job, wave a degree at them, get hired and become rich and powerful.”
Unglebower explains in his blog, Too XYZ, that while he was wise to avoid that delusion, he wasn’t “wise enough to realize that all the time, expense and work to get a degree might not ever open ANY doors. And, it certainly did not for me.”
Consequently all these realizations are having an impact on how Millennials perceive other big financial decisions.
Three-quarters (78 percent) of Millennials, more than any other age group, who borrowed money for college say their education loans have had a somewhat or large impact on other big life decisions like marriage or buying a home. In addition, the number of young Americans who are unsure which is a higher priority--saving for retirement or saving for a child’s education--has jumped up 6 points since last year, to 17 percent.
In keeping with that statistic, the COUNTRY Financial survey found that more Millennials than Americans overall, 15 percent to be exact, don’t think parents should pay for any college costs.
That certainly doesn’t sound too much like a generation who thinks everything should be handed to them.
Actually it sounds like Millennials are figuring things out, although quite a few of them are indeed learning those lessons the very hard way.
About the Survey: The COUNTRY survey on college savings is based on a national telephone survey of 3,000 Americans and is compiled by Rasmussen Reports, LLC, an independent research firm. The margin of sampling error for this survey is approximately +/- 2 percentage points with a 95 percent level of confidence.
Comments
Time to rant about education. 1.) I think the disfaction is being driven by the weak job market. 2.) Our College & University educational system needs to be blown up. Broken model. Big business, Presidents and tenured professors are getting paid too much, thus tuition costs are going up. There needs to be a salary cap. 3.) Tenured professors need to be required to teach more vs. worrying about their next book, thus handing off their classes to graduate assistants; and 4.) We need to start offering a more balance education with sciences and liberal arts to start preparing people in areas outside of business like science that will lead to innovation. I could go on and on and yes, Boomermon gets serious once in a while.
Boomermon has my vote for being right on target!
It’s frightening to think Gen Y’ers are seriously questioning the value of their college educations. Is the job market tough? Yes. Do entry-level jobs pay well? Maybe not. But, the reality is, people of all educational brackets are having trouble finding work. Cutting out higher education will only make it that much more challenging to get a high paying job in the future. We need to support this group by reminding them of this, and recognizing that they’re not alone, and the challenges they face are being confronted by millions of other people.
A recent article in the Wall Street Journal estimated there is roughly a $450,000 lifetime earnings difference for college grads over high-school graduates, and this number accounts for school loans. Moreover, I recently attended a seminar at Northeastern University titled ‘Recruiting in an Uncertain Labor Market’ which cited that non-college educated individuals are among a group experiencing lowest hiring rates since the Great Depression.
A few things you may want to consider: 1) When talking about how 59% of Millenials have not paid back their loans...Of course the majority has not. I'm surprised the number is not higher. FAFSA puts you on a 10 year repayment plan. The "oldest" Millenials would just be turning 32 and thus would just be finishing their loan repayments.
2) I'm interested in the "why" they are not interested in college. You've cited political reasons and we know the job market is weak right now, but what you haven't discussed in the rise in VC funding (no degrees needed) as well as that as we move into this decade, technology jobs are becoming more and more prevalent; again - no need for a degree.
Thank you for all of the comments. You all make great points.
@Boomermon I think the there are some flaws in the educational system. You made some valid points.
@Ed I think you're right on the money. Right now there may be Gen Y'ers wondering why they went through all the work and $$ to go to college, but it will pay off for them eventually. As a society, as employers, as mentors, etc. we need to remind them of this.
@Jamie I was actually surprised that the number was less than 60% as well. I figured it would have been much higher. As far as the biggest reason "why" they think it isn't a good investment? To be brutally honest, I think it is another case of Millennial impatience. They aren't seeing the return on their investment yet and are wondering if it was a sound investment to make. Good point about VCs, entrepreneurship is BIG among Gen Y.
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