Tim Grant Pittsburgh Post-Gazette
Now a different type of high school student is heading to college.
Older graduates who will be pursuing post-secondary education and training over the next few years are less concerned with ivy-covered prestige than with saving money, cutting expenses, and keeping college debt to a minimum, even if that means living at home. .
In a nationwide survey of more than 1,000 high school, junior, and sophomore students, the Washington, D.C.-based College Savings Fund found that they needed more practical and functional education options that were tied to real work experience and the ability to complete their requirements faster.
The two years of school break caused by the pandemic seem to have changed the way young people think about what higher education looks like. Generation Z students, or Zoomers, born between 1995 and 2012, expressed the highest rate of appreciation—63%—for technical and vocational education or apprenticeship programs as a viable alternative to four years of college than ever before.
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“This year’s poll shows a greater maturity, a real maturation of young people and their views on the role of education after high school,” said Vivian Tsai, chairman of the College Savings Fund.
This survey marks the 13th annual nationwide study of high school seniors’ attitudes towards saving, choosing and paying for college.
Tsai said the results of the 2019 and 2020 survey showed that high school students see college as the next chronological step in their growing up. They looked forward to being independent from their parents, moving into a dorm, a new stage in life, and having fun with new friends.
“The reality of 2020, 2021, and now 2022 has shown that this view of college is a bit dated at the moment 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 spending low has been a recurring theme in this year’s canvases on 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 equally ranked as areas of higher education: 10% of high school students plan to go to technical and vocational schools, only slightly behind 12% of those entering private colleges.
Other key findings of the study were that 82% of high school students plan to work full-time or part-time while studying at university to cover expenses; 59% are saving for higher education, and 22% of them have saved more than $5,000; 54% plan to fully or partially pay for their higher education; and 66% plan to live at home.
Financial aid expert Mark Kantrowitz said students who graduate from high school are more serious about whether they will attend a four-year college, which one, what they will study and how they will pay for it.
Gone are the days when students spent two or three years in college without even declaring a major.
“Families are becoming more price sensitive and whether college is worth it,” Kantrowitz said.
“Students are increasingly trying not to borrow or borrow too much,” he said. “They are looking to see if the employer provides a student loan assistance program. They estimate how easy it will be to pay off student loans.
One rule of thumb he suggested was that if a student’s total debt upon graduation is less than his starting salary, he should be able to pay off the student debt in 10 years or less.
The rising cost of college education has led to an increase in the amount of debt that students take on to afford it.
As of December 31, 2021, student borrowers in the US owe a total of $1.75 trillion, according to the Federal Reserve Bank.
According to the US Department of Education, the average student loan debt outstanding on federal student loans and not on private student loans is about $37,000 per borrower.
High school students in the CSF study – 21% – reported that their families use 529 education savings plans to fund their higher education.
529 is a tax-advantaged savings plan that was created by Congress to help families pay for college expenses. Unlike deposit accounts, which are taxed based on income and capital gains, funds used for qualifying education expenses are increased without paying federal taxes under the 529 plan, allowing most of a family’s savings to be used for education and a smaller portion for taxes.
529 plans can be used to pay for technical, career, and vocational education, as well as tuition, room, and board at four-year colleges. Funds can be used to pay for books or any materials needed for courses.
Technical schools and vocational and vocational training programs are becoming increasingly popular due to their many benefits, including shorter completion times and lower costs. But it’s not for everyone.
“Not all kids have technical skills that spark interest in a career in a technical or vocational school,” Tsai said. “A traditional four-year university where you can take history and writing classes will always have a purpose.”
The College Savings Foundation is a trade group of 529 plan program managers, government sponsors, and financial services firms that manage accounts. The nonprofit reports that as of March 31, 2022, according to ISS Market Intelligence, there are 15.8 million individual accounts across 529 plans in the U.S. with assets totaling $457.7 billion that families have set aside for future higher education spending. .
Every state in the country has at least one 529 plan. Some states offer more than one. There are currently 93,529 plans in operation throughout the country.