High school graduates want more diplomas | Economic news
Tim Grant Pittsburgh Post-Gazette
A different kind of high school student is now heading to college.
Graduate seniors who will be undertaking post-secondary education and training in the next few years care less about ivy-covered prestige and more about saving money, cutting costs, and keeping college debt to a bare minimum, even if it means living at home.
In a nationwide survey of more than 1,000 high school, junior, and sophomores, the Washington, D.C.-based College Savings Foundation found they wanted more practical, functional education options tied to an experience. real work and the ability to complete their requirements more quickly.
The two years of disrupted schooling caused by the pandemic seem to have reshaped young people’s idea of what higher education looks like. Gen Z students, or “zoomers” born between 1995 and 2012, expressed the highest level of appreciation – 63% – for technical and vocational education or apprenticeship programs as a viable alternative to college. four years than ever before.
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“This year’s survey reflects greater maturity, real growth among young people and their vision of the role of post-secondary education,” said Vivian Tsai, President of the College Savings Foundation.
This survey marks the 13th annual national study of high school students’ attitudes toward saving, selecting, and paying for a college education.
Tsai said survey results from 2019 and 2020 indicated that high school students viewed college as the next chronological step in their growth. They looked forward to independence from their parents, moving into their dorms, experiencing a new phase of life, and having fun with a whole new group of friends.
“The reality of 2020, 2021 and now 2022 has indicated that this vision of college is a bit outdated at this point, because the reality is that college is a four-year preparation for real life,” Tsai said. .
“I think a lot of our kids have seen that real life is a lot harder today than it was five years ago.”
Keeping higher education costs low was a consistent theme in this year’s survey of the college planning landscape.
Cost-cutting measures chosen by high school students included attending a public college (38%); and community college (27%). In an interesting comparison, technical and vocational education and private colleges are ranked equally among higher education destinations, with 10% of secondary school students planning to go to technical and vocational schools, only slightly behind 12% in private colleges.
Other key findings from the survey were that 82% of high school students plan to work full-time or part-time while in college to help cover costs; 59% are saving for their higher education and 22% of them have saved more than $5,000; 54% plan to pay for part or all of their higher education; and 66% plan to live at home.
Financial aid expert Mark Kantrowitz said students coming out of high school are taking a more serious approach to whether they will attend four-year college, which one, what they will study and how they will pay for it.
The days of students spending two or three years in college without even declaring a major are about to disappear.
“Families have become increasingly price-sensitive and increasingly sensitive to whether college is worth it,” Kantrowitz said.
“Students are increasingly trying to avoid having to borrow, or borrowing too much,” he said. “They are looking to see if the employer offers a student loan repayment assistance program. They assess how easy it will be to repay student loans.
A rule of thumb he proposed was that if a student’s total debt upon graduation is less than their starting salary, they should be able to pay off the student debt in 10 years or less.
The rising cost of a college education has driven up the amount of debt students have taken on to afford it.
Student borrowers in the United States owe a total of $1.75 trillion as of December 31, 2021, according to the Federal Reserve Bank.
The average outstanding student debt for federal student loans — not private student loans — is about $37,000 per borrower, according to the US Department of Education.
High school students in the CSF study – 21% – said their families used 529 college savings plans to fund their higher education.
A 529 is a tax-advantaged savings plan that was created by Congress to help families pay for college expenses. Unlike custodial accounts, which are taxable based on income and capital gains, funds used for eligible educational expenses grow free of federal tax under a 529 plan, allowing for use more of a family’s savings for tuition and less for taxes.
529 plans can be used to pay for technical, vocational, and vocational training, as well as tuition and room and board, at four-year colleges. Funds can be used to pay for books or supplies needed for classes.
Technical schools and vocational and vocational training programs are gaining popularity due to their many advantages, including a shorter time to complete studies and a lower cost. But it’s not for everyone.
“Not all children have the technical skills that lead to an interest in a career at technical or vocational school,” Tsai said. “The traditional four-year college where you can take courses in history and creative writing will still have a purpose.”
The College Savings Foundation is a trade group of 529 plan program managers, state sponsors and financial services companies that service the accounts. The non-profit organization reports that there are 15.8 million 529 individual plan accounts in the United States with a total of $457.7 billion in assets that families have set aside for spending. higher education futures as of March 31, 2022, according to ISS Market Intelligence.
Every state in the country has at least one 529 plan. Some states offer more than one. Currently, 93 schemes operate out of 529 schemes across the country.