How Generation Z is Managing Student Loan Debt

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Meet Gen Z who get a bad rap for being like millennials but are not as bad as that generation.

In the 1940s the GI Bill made college a reality for more young people than ever. Combined with an increase in federal loans, higher education was relatively easy to access and generally affordable for those who wanted it. By the 1990s however, state support for colleges decreased dramatically and tuitions began to rise.

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As the generation of Millennials (defined as those born between 1981 and 1996) have struggled with student loan payments, the next generation (those born between 1996 and 2011), known as Gen Z, have taken notice. As they approach college many have begun to put together strategies that will allow them to more responsibly pay for higher education without as much fear of mortgaging their futures. As a study from NitroCollege demonstrates, other generations have a great deal to learn from Generation Z when it comes to financial savvy.

Current student loans can be tricky to navigate. As of 2017, there are over 44 million borrowers representing over $1.3 trillion in student loan debt. So, where is the new generation finding savings?

In general they are looking close to home. According to the study of over 5000 students, almost 70% are considering nearby state schools. This is because in state tuition is usually roughly half of what out of staters pay. And with the average cost of room and board at over $10k per semester, about 20% of Generation Z students are considering continuing to live with parents to save their cash.

Not only are these students thinking more about their money when it comes to higher education, they have some realistic expectations about their futures as well.

Millennials have been characterized as suffering under the assumption that those with college degrees in competitive fields should be guaranteed high paying jobs right out of college. As this has not panned out it has led to some frustration. Again, Gen Z has taken notice. In general, their expectations are lower and more realistic when envisioning their fledgling careers, with about half clearly prepared to be making under $50k as they begin their professional lives. See below for the average entry level salary for a common Bachelor’s degree.

Gen Z

There’s a great deal more to learn from Generation Z and what they have gathered from the mistakes of the past. The statistics in this study tell a clear story of a generation that will not endure the same financial mismanagement of their elders, particularly when it comes to higher education costs.

Gen Z infographic retirement guide below.


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