I have been spending a lot of my time learning and worrying about the economics of being Gen Z. I appreciate this post and will use it to inspire more of my other reading and research.
Seems like the biggest contributor to this problem is college debt. Far too many people go into debt for degrees that don't pay off and aren't necessary for most jobs. Meanwhile skilled "blue collar" jobs offer paid apprenticeships and all sorts of incentives to get started.
Real income for all age groups has increased over this business cycle, 2013 to 2025. You have a graph that shows this increase, but the article implies and in one place claims that wages have fallen behind inflation. They have not. I wish this article had made that clear, because real income growth has been the big success of this last decade.
I sympathize with your perspective related to inequality and would gladly vote for a higher marginal tax rate, but your analysis here is highly misleading. I'll focus just on section 2, Education and student debt.
"student loan debt reached $37,338 per borrower in 2023." This average is misleading because it includes the higher debt load of the increasing number of graduate students. The median debt of a student with just an undergraduate degree is likely half this amount. That's not onerous. As far as I can tell, you can only get data at the school level, which makes analysis of the distribution of debt difficult, but I've detailed all of this in three post for undergrad, master's, and Ph.D.
I sympathize with an 18-year-old that took on too much debt for a 4-year degree, as higher ed is somewhat predatory, but grad school is a different story. Where is the line between a problem and a bad personal decision? Overall, I don't believe there is a student debt crisis; however, the situation is complicated and includes exceptions such as for-profit colleges and lower-income students whom colleges admitted when they perhaps should not have, leading to their dropping out with debt.
Despite the section heading, the graph you present is for overall debt and not just student loan related. Again, the $94k is an average, which shouldn't be used here. The caption says this: "30% of Gen Z has more than $50,000 in debt." In other words, the median is less than $50k. By how much, we don't know, but it really matters. This 30% likely consists of individuals who went on to expensive graduate programs that they expect to pay off over time. The debt here is less a problem and more an investment.
As for debt in general, it isn't an indicator of a problem per se. The more money one makes, the more money one can borrow. Similarly, lower debt may simply mean lower income. A better metric would be a debt-to-income ratio.
I think you missed the point. First, grad students are students and should be included. The 50% plus figure is validated across many sources. The data could not be clearer. I appreciate your work and opinion , but the broader message is undeniable.
Basic statistical concept: When data is skewed, means are a poor representation of center. Medians should be used. Grad students are outliers and skew the data. The student loan debt mean is misleading, and this isn't my opinion but stats 101.
Graduate students are still considered students, but the debt they incur is taken on with more intention. Lawyers and doctors can handle the debt. It isn't bad debt.
Now, a student who takes on debt for a year or two of college and drops out, for whatever reason, has bad debt. Gen Z doesn't have an overall problem, but that doesn't mean there aren't specific problems. Either way, bad data or bad use of data ends up with bad policy.
I don’t think you understand EE Rand how debt works. Further, as a data analyst, you should not be deciding who is in a cohort or not. They are self defining based on circumstances. It is not your job to judge. So, respectfully I disagree with your subjectivity
Your reply completely fails to address the points made and has nothing to do with the comment youre replying to. Instead you rely on throwing out spurious accusations like "dont understand how debt works" and "your subjectivity"
You are blaming the individuals for problems that are systemic. The problem is not that kids want and need an education. The problem is that we prey upon them. College kids are profitable!
Some jobs require a degree but don’t pay a large amount. What are those young people to do?!
Why would you compare your kids' student loan rate to your mortgage rate? Its like saying that when your kids bought some organic melons last week, the price they paid was higher than what you paid for apples a few years ago. It's two totally different things even if they're both fruit (loans)
The point is that your kids got loans at rates that they could not have otherwise gotten (because frankly not many people are dumb enough to loan money long term to 18 year olds).
Compare your kids student loans rate to what they would have to pay on a credit card.
(Also currently student loan rates and mortgage rates averages are about comparable - difference is, mortgage is backed by a house)
Why are we charging interest at all? Why isn’t college simply provided for free or very little? Hell, some countries provide a stipend on top of free college! WHY DO WE NOT DO THAT?
I’ll tell you why — because we don’t care about kids or frankly humanity. We only care about money.
We charge tuition for college because it actually costs money to provide an education and someone has to pay that cost. Those same countries also either really restrict who can go to college, also charge high tuition, or provide a "free" education that is only a bit more than just watching a bunch of YouTube videos.
I dont know who this uncaring "we" is supposed to be. Certainly there are people in our society who don't care about kids, humanity and only money. But as a society as a whole we do in fact subsidize the crap out of education (well... at least so far, we'll see how bad it gets going forward)
BTW, if your argument is that a degree/license/certificate shouldnt be required for doing certain types of therapy work (i dont know the details here) then I probably agree
Really? Means should not be used here in representing student loan debt. Medians should be used instead, as this is a basic statistics concept and suggests the problem isn't systemic.
I even note that "as higher ed is somewhat predatory." But a student with $10-15k in undergraduate debt is not the same as a student with $100k in law school debt. The first is not particularly onerous or a problem, and the second might be a reasonable investment in oneself. If you don't use the correct statistical measurement, you don't end up with good policy. There are clear pockets of problems, but not a systemic one.
Even the housing data is questionable for the same reasons. There are likely substantial variations by state and locality.
What are those young people to do? First, many shouldn't be going to college (I say that with 25+ years as a faculty member). There are excellent options in the trades. Another option to keep costs down is spending the first two years at a community college to keep costs down.
Your analysis means jack shit to me, as the mother of a child who works as a therapist. She had to get a master's degree to do this important work, and that has meant debt. I don't know how she will ever pay it down, since therapists are modestly paid.
She didn't want to be a fucking plumber, OK? She wanted to work with people who need help with things like depression. Not everyone should go into the trades. Some people want to perform other kinds of work.
I will be sure to let her know she's actually fine according to you and your superior analytical skills.
God, I wish YOU had opted to fix toilets for a living. That would have been more helpful.
Nice. Insults are a powerful way to make your point. The thing is, as I noted at the beginning of my first post, I'm not your enemy. Please stay in your echo chamber and see how that works for you.
Aren't you? Looks to me like you're the enemy of everyone who wants all young people to be able to afford a good education. As soon as you start recommending that all poor kids go into the trades, I know what you are.
Most kids are able to afford a good education (2 years of community college and 2 more at a state school is one path), and tuition discounting, rightfully so, favors lower-income students. In fact, higher education historically has funded poorer students by discounting wealthier students less and giving it to poorer students.
I never said poor kids should go into the trades. I am not poor; one of my children is in the trades, and I had his college education fully funded if he chose to pursue it. It was a better path for him that may, in fact, be better in the long term than most college grads in white-collar jobs, as AI can't do his job.
I regularly speak out on campus about the travesty of accepting underprepared students (not all poor, but disproportionately so) and having them take out loans while not providing them a legitimate path to be successful. We are just taking their money for a few semesters. I've already referred to higher ed as predatory, and I'm in it.
No, you don't know what or who I am. I mean, based on your comments, maybe I should infer that you look down on people in the trades. The overgeneralized arguments presented in this article and comments will not resonate with the wider public. Given the complexity of society, relying solely on means without a comprehensive understanding of distributions will not suffice.
Please proceed to advocate for the public funding of grades 13-18. It won't happen, and in the meantime there are populations, predominately lower income, that could be helped. Good luck to you, and keep in mind I didn't insult you.
Pew Research Center and the Federal Reserve found that of those who borrow and obtain bachelors degrees 49% and 48% borrowed at least $25,000 respectively.
The problem with viewing education as a monetary investment is that the job market is evolving much faster than anyone can predict and wages and employment aren't guaranteed. New technologies such as AI are upending employment prospects for many careers making it very hard for students to choose a degree which will pay off. Add on top of that the fact that graduates are facing lower employment rates once finishing their degrees.
This is a systemic issue. Youth are told a university education is required to have a decent life, making enough money to pay for at least the basic necessities and for retirement. Then graduating only to suffer from high competition for entry level employment, lower employment rates, and wages that aren't keeping up with the cost of living. All while having to pay off the debt plus the interest on that debt. The interest alone has forced borrowers to pay their debts multiple times over.
We're forcing youth to decide between potentially lower earnings and financial hardship or higher earnings along with massive debt early in their adult lives. The profiting off of education while simultaneously requiring that they get an education creates a cycle of exploitation.
Thank you for the links. The median BS degree holder under 40 who borrowed has $25k in debt (my point about the $37k mean stands). But only 1 in 4 under 40 has any debt at all (Pew article). So 75% under 40 have no debt, the next 12.5% are under $25K (maybe a few issues here), and then there is the 12.5% over $25K (more issues). I don't see that as systemic. I would say about 12.5% may have some issues to look at. Where did they go to college? For example, for-profit colleges often present significant issues.
"Youth are told a university education is required to have a decent life, making enough money to pay for at least the basic necessities and for retirement." We should stop telling kids that. It isn't true. As a 25+ year college faculty member, one of my kids doesn't have a degree and is doing well financially in carpentry and general contracting. Also, AI can't do his job.
The data we have is historical; I would agree that moving forward with AI there are issues, and not just for young people.
"We're forcing youth to decide between potentially lower earnings and financial hardship or higher earnings along with massive debt early in their adult lives." A small percentage has massive debt. That concerns me, but that isn't systemic. There are ways to do this with spending less money, and I bet many of those under $25K did. Do the first two years at a community college. Finish at a state school and, when possible, live at home instead of staying in a dorm (more the European model). Work a little more (students work less than they used to). This can all be done without any policy changes.
"The profiting off of education while simultaneously requiring that they get an education creates a cycle of exploitation." I've noted the predatory nature of some of higher education. But who exactly is profiting? Some administrators make too much money. Faculty at elite colleges, yes, but certainly not those at community colleges and most regional colleges. It should be noted that some states have stopped requiring degrees for jobs that really didn't need them.
Part of the problem is the market; students increasingly wanted more amenities, which drove up the cost. Higher education is people intensive, and increasing health care has added costs. Solving the cost issue is complex, especially considering that endowments fund a significant portion of tuition as it is.
That's about 44 million student loan borrowers, nearly half of which have at least $25,000 in student loan debt. Totaling 1.7 trillion and rising in student loan debt, the third largest debt behind mortgages and auto loans. A quarter of adults under 40 and nearly 50% of all borrowers isn't a small number of people and while yes it's a small percentage overall, the fact still stands that student loan debt is built into getting a higher education and therefore systemic.
Those 1 in 4 under 40 are more likely to earn a higher income. Earning more is essential in a country where cost of living is skyrocketing. I'm glad your kid is doing well without a degree, I totally support trades and crafts being able to make a living wage while also saving for retirement, but that's irrelevant as we are speaking about those who are choosing to get an education. Most likely choosing to do so because of the statistically higher earnings. (https://www.ppic.org/publication/is-college-worth-it/)
I agree with cutting costs out ourselves by living at home or with a group and by attending community college first but there needs to be some leeway for students to attend colleges specializing in their chosen fields. I don't agree with the suggestion to work while studying due to this impacting lower income individual more. Plus they should be able to focus on their studies until they're towards the end of their degree when they should be able to earn credits through internships.
Faculty costs is a grey area. What do you consider being paid too much? Is it dependent on the physical location of the job and if so, aren't businesses/schools doing this already when they decide how much to pay for a position?
The market is the problem. Education shouldn't be treated as a commodity that profits off of people who want to get an education. The purpose of schools is to educate and research, not add amenities because students want them. Public universities and community colleges should focus on education first and foremost to cut the costs, ensuring all to have the ability to attend without being burdened with debt lasting much of our adult lives.
Student loans are used systematically, but I don't see them as a systemic problem. We can just agree to disagree on this. I will say that I don't think the argument of loans being a systemic problem will work in society at large.
"but that's irrelevant as we are speaking about those who are choosing to get an education. Most likely choosing to do so because of the statistically higher earnings." I think the word choosing carries a lot of weight here. They can choose to do other things. They can choose to take a year or two off and work first, they can choose community college (most of the time), etc. I don't want to debate it, but how much should society be responsible for people's choices? My wife and I paid our loans until we were about 50. We dealt with it. Yes, it was a burden, but we accepted it as a choice.
More important is the confusion about the payoff of higher ed. Yes, it pays off on average, but averages don't provide a complete picture. One study puts 23% of BS degrees with a negative return on investment and 43% for MS degrees. https://freopp.org/whitepapers/does-college-pay-off-a-comprehensive-return-on-investment-analysis/ From my perspective and experience, too many students think they just need the piece of paper and don't really need to work hard and learn. Part of why they don't get a return on their investment. I give this info to students in my classes to try to impress upon them that the degree isn't a guarantee, with little effect. This is part of the problem. I'd hate to see what it would be like if college was free to anyone who wanted to show up. Or maybe we'd feel more free to fail students, and it would be better.
"Plus they should be able to focus on their studies until they're towards the end of their degree, when they should be able to earn credits through internships." Part of the issue here is that students don't really focus on studies. For most college students, attending college resembles a part-time job that requires about 30 hours of work each week. Even at Harvard: https://www.harvardmagazine.com/2024/03/university-people-the-undergraduate-balance A good summer job and 6-10 hours during the semester are more than doable to deal with costs. Internships are a great idea, but there aren't enough of them available for all students.
"Education shouldn't be treated as a commodity that profits off of people who want to get an education." Yes and no. Students currently invest little in their education, so I am uncertain whether making it free for them would be beneficial. I would also say that there are too many students in college. I don't mind them paying and taking out loans, but how much is another question.
Colleges are not profiting in the same manner that businesses do, but I see the point. Changes are needed, broadly related to how 18-year-olds progress in life. Better apprenticeships, and not necessarily just for traditional trades. At the same time, we send too many people to college, yet we aren't educating society enough or maybe properly.
As to faculty pay, people I tend to talk to don't recommend that students go on to a Ph.D. to try and get a faculty job. They are too hard to get, and pay is hit and miss (I haven't seen a raise that matches inflation for almost a decade).
Overall, I agree there are issues but not at the magnitude suggested. The issue is less with undergrad than it is with graduate programs. Many MS programs are there to generate a "profit" to help pay for undergraduate programs. Endowment and dorms also help cover academic costs. Which brings us back to the fact that college is expensive and cutting costs isn't entirely simple (coming from a place trying to cut costs). Understanding this complex system requires nuance and details.
Yes, the problem with the cost of higher education is systemic.
We are preying on our kids. Instead of helping them start their adult lives, we see them as a profitable products from which we can squeeze profits.
You know, society used to cover the entire cost of educating most people. You started with kindergarten and finished with 12th grade (or even less in the past.) And that was sufficient for almost everyone. Now, kids need preschool, which is at the parents' expense. They need higher education, which is at the parents/child's expense. If you consider a year of preschool, four years of college and two years for grad school, that's SEVEN YEARS that aren't generally paid for by society. That's a lot, and most (not all) young people will need this if they want to succeed financially.
There's absolutely no good reason for public education to only cover the years of schooling that were appropriate 50 years ago.
Of course Gen Z has higher debt. They're younger. Typical lifestyle is borrow when young, save when middle aged, dissave when old. This has been true of every generation since ww2. Trying to present it as a "scare statistics" is at best misleading and at worst dishonest
Again, it is the totality of the data, this generation has unusual challenges that have been aggregated over decades. I am not interested in a debate, if one uses a datapoint among other datapoints that you disagree with to come to a larger conclusion it is not dishonest. You may not agree , but it is not dishonest. Thank you for contributing to the discussion.
Also, my conclusion which is very similar to many, is not “dishonest” because it is different than yours . There is nothing dishonest about looking at data and when it is clear coming to a logical conclusion. You must look at all the data. Name calling will not help this generation
I never said your conclusion was dishonest. I was very specific in my criticism. Using a fact that has been true for decades to try to make a point about "how bad the world has gotten" seems dishonest to me. Either that or careless
I guess we have very different conclusions, when. A full generation is faced with higher prices exponentially so, has more built in debt, wages are stagnant and there is no policy for change, I maintain my warrant here.
Can you provide some evidence? I care whether or not young people are worse off than they used to be. Real wages are a decent proxy. Debt is not. Inflation is not. Housing prices is not.
It's very easy to imagine a world where young people have more debt, the economy has more inequality, inflation is higher than it used to be, and real wages are more stagnant than they used to be, but almost everyone is objectively better off and has a higher standard of living!
Read my article. This is officially been a circle, which happens. The circle in now closed. Please feel free to debate on with yourself. My columns are always open places.
Your first graph actually makes it look like a good situation for young workers. Your second graph is just a one-time snapshot and therefore does not make a comparison over time. (There's also another comment explaining why using means is misleading.) Your third point is overblown; home ownership rates are very high for young people. I have no clue how your 4th point is relevant. Your 5th point has been true for every generation. I've already responded to your 6th and 7th point: we should define mobility based on objective characteristics, not relative income. We should also measure the well-being of individuals based on the well-being of individuals, not based on how close they are to being in the top 1%. None of these are controversial takes.
The only real data you provide that implies things aren't looking good is the alleged wage stagnation for 16-24 year olds since 2010. I actually care about this because it's a good measure of objective well-being.
Also, the section on inheritance is really strange. Of course, Boomers and GenX have much more inherited wealth because they're the generations whose parents have died (which is almost always where inherited wealth comes from). That wealth is all going to flow to GenZ eventually; it's just going to take some time.
I have been spending a lot of my time learning and worrying about the economics of being Gen Z. I appreciate this post and will use it to inspire more of my other reading and research.
Glad to hear it!
Nice article highlighting all the Gen Z struggles. Like Dr. A, I'm going to use it for inspiration!
Seems like the biggest contributor to this problem is college debt. Far too many people go into debt for degrees that don't pay off and aren't necessary for most jobs. Meanwhile skilled "blue collar" jobs offer paid apprenticeships and all sorts of incentives to get started.
Community colleges and technical programs are looking more and more attractive to many people
Thank you for all you do! 🤗♥️
Real income for all age groups has increased over this business cycle, 2013 to 2025. You have a graph that shows this increase, but the article implies and in one place claims that wages have fallen behind inflation. They have not. I wish this article had made that clear, because real income growth has been the big success of this last decade.
Here's an article from the Economic Policy Institute that discussed this. https://www.epi.org/publication/swa-wages-2023/#:~:text=Real%20wage%20growth%20at%20the%2010th%20percentile%20was%20exceptionally%20strong,%2Dpercentile%20wage%20grew%204.4%25.
I sympathize with your perspective related to inequality and would gladly vote for a higher marginal tax rate, but your analysis here is highly misleading. I'll focus just on section 2, Education and student debt.
"student loan debt reached $37,338 per borrower in 2023." This average is misleading because it includes the higher debt load of the increasing number of graduate students. The median debt of a student with just an undergraduate degree is likely half this amount. That's not onerous. As far as I can tell, you can only get data at the school level, which makes analysis of the distribution of debt difficult, but I've detailed all of this in three post for undergrad, master's, and Ph.D.
https://briefedbydata.substack.com/p/is-there-a-student-loan-debt-problem
https://briefedbydata.substack.com/p/is-there-a-student-loan-debt-problem-9c0
https://briefedbydata.substack.com/p/is-there-a-student-loan-debt-problem-f4a
I sympathize with an 18-year-old that took on too much debt for a 4-year degree, as higher ed is somewhat predatory, but grad school is a different story. Where is the line between a problem and a bad personal decision? Overall, I don't believe there is a student debt crisis; however, the situation is complicated and includes exceptions such as for-profit colleges and lower-income students whom colleges admitted when they perhaps should not have, leading to their dropping out with debt.
Despite the section heading, the graph you present is for overall debt and not just student loan related. Again, the $94k is an average, which shouldn't be used here. The caption says this: "30% of Gen Z has more than $50,000 in debt." In other words, the median is less than $50k. By how much, we don't know, but it really matters. This 30% likely consists of individuals who went on to expensive graduate programs that they expect to pay off over time. The debt here is less a problem and more an investment.
As for debt in general, it isn't an indicator of a problem per se. The more money one makes, the more money one can borrow. Similarly, lower debt may simply mean lower income. A better metric would be a debt-to-income ratio.
Funny thing too, despite all these challenges, Gen Z is saving for retirement more: https://www.nytimes.com/2025/06/28/business/retirement/gen-z-retirement-savings.html
An analyst uses data that contradicts their worldview to adjust it, while an advocate disregards or explains away such facts. Be an analyst first.
I think you missed the point. First, grad students are students and should be included. The 50% plus figure is validated across many sources. The data could not be clearer. I appreciate your work and opinion , but the broader message is undeniable.
Basic statistical concept: When data is skewed, means are a poor representation of center. Medians should be used. Grad students are outliers and skew the data. The student loan debt mean is misleading, and this isn't my opinion but stats 101.
Graduate students are still considered students, but the debt they incur is taken on with more intention. Lawyers and doctors can handle the debt. It isn't bad debt.
Now, a student who takes on debt for a year or two of college and drops out, for whatever reason, has bad debt. Gen Z doesn't have an overall problem, but that doesn't mean there aren't specific problems. Either way, bad data or bad use of data ends up with bad policy.
I didn't reference 50%, so I'm not sure what you refer to. But as I noted in the other comment, homeownership rates are in line historically for Gen Z. https://jabberwocking.com/young-people-buy-a-lot-of-homes/
I don’t think you understand EE Rand how debt works. Further, as a data analyst, you should not be deciding who is in a cohort or not. They are self defining based on circumstances. It is not your job to judge. So, respectfully I disagree with your subjectivity
This is a pretty dishonest reply Marie
You have piqued my interest. Please share what is “dishonest”?
Your reply completely fails to address the points made and has nothing to do with the comment youre replying to. Instead you rely on throwing out spurious accusations like "dont understand how debt works" and "your subjectivity"
Not sure I defined a cohort. Good luck to you.
You are blaming the individuals for problems that are systemic. The problem is not that kids want and need an education. The problem is that we prey upon them. College kids are profitable!
Some jobs require a degree but don’t pay a large amount. What are those young people to do?!
Agree Michelle. It is that simple.
We do not pray on them. We give them loans at well below market rates so they can have opportunities they otherwise would not have.
(Schools do charge too much but that's not the fault of loan giving federal government)
Bullshit. The rates my kids paid were well above my mortgage rate.
You’re preying on them.
Why would you compare your kids' student loan rate to your mortgage rate? Its like saying that when your kids bought some organic melons last week, the price they paid was higher than what you paid for apples a few years ago. It's two totally different things even if they're both fruit (loans)
The point is that your kids got loans at rates that they could not have otherwise gotten (because frankly not many people are dumb enough to loan money long term to 18 year olds).
Compare your kids student loans rate to what they would have to pay on a credit card.
(Also currently student loan rates and mortgage rates averages are about comparable - difference is, mortgage is backed by a house)
Why are we charging interest at all? Why isn’t college simply provided for free or very little? Hell, some countries provide a stipend on top of free college! WHY DO WE NOT DO THAT?
I’ll tell you why — because we don’t care about kids or frankly humanity. We only care about money.
We charge tuition for college because it actually costs money to provide an education and someone has to pay that cost. Those same countries also either really restrict who can go to college, also charge high tuition, or provide a "free" education that is only a bit more than just watching a bunch of YouTube videos.
I dont know who this uncaring "we" is supposed to be. Certainly there are people in our society who don't care about kids, humanity and only money. But as a society as a whole we do in fact subsidize the crap out of education (well... at least so far, we'll see how bad it gets going forward)
BTW, if your argument is that a degree/license/certificate shouldnt be required for doing certain types of therapy work (i dont know the details here) then I probably agree
Really? Means should not be used here in representing student loan debt. Medians should be used instead, as this is a basic statistics concept and suggests the problem isn't systemic.
I even note that "as higher ed is somewhat predatory." But a student with $10-15k in undergraduate debt is not the same as a student with $100k in law school debt. The first is not particularly onerous or a problem, and the second might be a reasonable investment in oneself. If you don't use the correct statistical measurement, you don't end up with good policy. There are clear pockets of problems, but not a systemic one.
Even the housing data is questionable for the same reasons. There are likely substantial variations by state and locality.
What are those young people to do? First, many shouldn't be going to college (I say that with 25+ years as a faculty member). There are excellent options in the trades. Another option to keep costs down is spending the first two years at a community college to keep costs down.
Finally, if things are so dire, how are they saving more? Why are homeownership rates consistent with history? https://jabberwocking.com/young-people-buy-a-lot-of-homes/
Your analysis means jack shit to me, as the mother of a child who works as a therapist. She had to get a master's degree to do this important work, and that has meant debt. I don't know how she will ever pay it down, since therapists are modestly paid.
She didn't want to be a fucking plumber, OK? She wanted to work with people who need help with things like depression. Not everyone should go into the trades. Some people want to perform other kinds of work.
I will be sure to let her know she's actually fine according to you and your superior analytical skills.
God, I wish YOU had opted to fix toilets for a living. That would have been more helpful.
Nice. Insults are a powerful way to make your point. The thing is, as I noted at the beginning of my first post, I'm not your enemy. Please stay in your echo chamber and see how that works for you.
Aren't you? Looks to me like you're the enemy of everyone who wants all young people to be able to afford a good education. As soon as you start recommending that all poor kids go into the trades, I know what you are.
Most kids are able to afford a good education (2 years of community college and 2 more at a state school is one path), and tuition discounting, rightfully so, favors lower-income students. In fact, higher education historically has funded poorer students by discounting wealthier students less and giving it to poorer students.
I never said poor kids should go into the trades. I am not poor; one of my children is in the trades, and I had his college education fully funded if he chose to pursue it. It was a better path for him that may, in fact, be better in the long term than most college grads in white-collar jobs, as AI can't do his job.
I regularly speak out on campus about the travesty of accepting underprepared students (not all poor, but disproportionately so) and having them take out loans while not providing them a legitimate path to be successful. We are just taking their money for a few semesters. I've already referred to higher ed as predatory, and I'm in it.
No, you don't know what or who I am. I mean, based on your comments, maybe I should infer that you look down on people in the trades. The overgeneralized arguments presented in this article and comments will not resonate with the wider public. Given the complexity of society, relying solely on means without a comprehensive understanding of distributions will not suffice.
Please proceed to advocate for the public funding of grades 13-18. It won't happen, and in the meantime there are populations, predominately lower income, that could be helped. Good luck to you, and keep in mind I didn't insult you.
Pew Research Center and the Federal Reserve found that of those who borrow and obtain bachelors degrees 49% and 48% borrowed at least $25,000 respectively.
The problem with viewing education as a monetary investment is that the job market is evolving much faster than anyone can predict and wages and employment aren't guaranteed. New technologies such as AI are upending employment prospects for many careers making it very hard for students to choose a degree which will pay off. Add on top of that the fact that graduates are facing lower employment rates once finishing their degrees.
This is a systemic issue. Youth are told a university education is required to have a decent life, making enough money to pay for at least the basic necessities and for retirement. Then graduating only to suffer from high competition for entry level employment, lower employment rates, and wages that aren't keeping up with the cost of living. All while having to pay off the debt plus the interest on that debt. The interest alone has forced borrowers to pay their debts multiple times over.
We're forcing youth to decide between potentially lower earnings and financial hardship or higher earnings along with massive debt early in their adult lives. The profiting off of education while simultaneously requiring that they get an education creates a cycle of exploitation.
https://www.pewresearch.org/short-reads/2024/09/18/facts-about-student-loans/
https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-higher-education-student-loans.htm
Thank you for the links. The median BS degree holder under 40 who borrowed has $25k in debt (my point about the $37k mean stands). But only 1 in 4 under 40 has any debt at all (Pew article). So 75% under 40 have no debt, the next 12.5% are under $25K (maybe a few issues here), and then there is the 12.5% over $25K (more issues). I don't see that as systemic. I would say about 12.5% may have some issues to look at. Where did they go to college? For example, for-profit colleges often present significant issues.
"Youth are told a university education is required to have a decent life, making enough money to pay for at least the basic necessities and for retirement." We should stop telling kids that. It isn't true. As a 25+ year college faculty member, one of my kids doesn't have a degree and is doing well financially in carpentry and general contracting. Also, AI can't do his job.
The data we have is historical; I would agree that moving forward with AI there are issues, and not just for young people.
"We're forcing youth to decide between potentially lower earnings and financial hardship or higher earnings along with massive debt early in their adult lives." A small percentage has massive debt. That concerns me, but that isn't systemic. There are ways to do this with spending less money, and I bet many of those under $25K did. Do the first two years at a community college. Finish at a state school and, when possible, live at home instead of staying in a dorm (more the European model). Work a little more (students work less than they used to). This can all be done without any policy changes.
"The profiting off of education while simultaneously requiring that they get an education creates a cycle of exploitation." I've noted the predatory nature of some of higher education. But who exactly is profiting? Some administrators make too much money. Faculty at elite colleges, yes, but certainly not those at community colleges and most regional colleges. It should be noted that some states have stopped requiring degrees for jobs that really didn't need them.
Part of the problem is the market; students increasingly wanted more amenities, which drove up the cost. Higher education is people intensive, and increasing health care has added costs. Solving the cost issue is complex, especially considering that endowments fund a significant portion of tuition as it is.
That's about 44 million student loan borrowers, nearly half of which have at least $25,000 in student loan debt. Totaling 1.7 trillion and rising in student loan debt, the third largest debt behind mortgages and auto loans. A quarter of adults under 40 and nearly 50% of all borrowers isn't a small number of people and while yes it's a small percentage overall, the fact still stands that student loan debt is built into getting a higher education and therefore systemic.
Those 1 in 4 under 40 are more likely to earn a higher income. Earning more is essential in a country where cost of living is skyrocketing. I'm glad your kid is doing well without a degree, I totally support trades and crafts being able to make a living wage while also saving for retirement, but that's irrelevant as we are speaking about those who are choosing to get an education. Most likely choosing to do so because of the statistically higher earnings. (https://www.ppic.org/publication/is-college-worth-it/)
As a borrower myself I can say one of the worst aspects of student loan debt is the interest. Supposedly the average interest is around 6.8% with an average time to pay off loans of 20 years. That's tens of thousands of dollars added onto the loan exacerbating the financial difficulties of borrowers, more so for those with lower incomes. (https://educationdata.org/average-time-to-repay-student-loans & https://www.pewresearch.org/social-trends/2024/05/23/is-college-worth-it-2/)
I agree with cutting costs out ourselves by living at home or with a group and by attending community college first but there needs to be some leeway for students to attend colleges specializing in their chosen fields. I don't agree with the suggestion to work while studying due to this impacting lower income individual more. Plus they should be able to focus on their studies until they're towards the end of their degree when they should be able to earn credits through internships.
Faculty costs is a grey area. What do you consider being paid too much? Is it dependent on the physical location of the job and if so, aren't businesses/schools doing this already when they decide how much to pay for a position?
The market is the problem. Education shouldn't be treated as a commodity that profits off of people who want to get an education. The purpose of schools is to educate and research, not add amenities because students want them. Public universities and community colleges should focus on education first and foremost to cut the costs, ensuring all to have the ability to attend without being burdened with debt lasting much of our adult lives.
Student loans are used systematically, but I don't see them as a systemic problem. We can just agree to disagree on this. I will say that I don't think the argument of loans being a systemic problem will work in society at large.
"but that's irrelevant as we are speaking about those who are choosing to get an education. Most likely choosing to do so because of the statistically higher earnings." I think the word choosing carries a lot of weight here. They can choose to do other things. They can choose to take a year or two off and work first, they can choose community college (most of the time), etc. I don't want to debate it, but how much should society be responsible for people's choices? My wife and I paid our loans until we were about 50. We dealt with it. Yes, it was a burden, but we accepted it as a choice.
More important is the confusion about the payoff of higher ed. Yes, it pays off on average, but averages don't provide a complete picture. One study puts 23% of BS degrees with a negative return on investment and 43% for MS degrees. https://freopp.org/whitepapers/does-college-pay-off-a-comprehensive-return-on-investment-analysis/ From my perspective and experience, too many students think they just need the piece of paper and don't really need to work hard and learn. Part of why they don't get a return on their investment. I give this info to students in my classes to try to impress upon them that the degree isn't a guarantee, with little effect. This is part of the problem. I'd hate to see what it would be like if college was free to anyone who wanted to show up. Or maybe we'd feel more free to fail students, and it would be better.
"Plus they should be able to focus on their studies until they're towards the end of their degree, when they should be able to earn credits through internships." Part of the issue here is that students don't really focus on studies. For most college students, attending college resembles a part-time job that requires about 30 hours of work each week. Even at Harvard: https://www.harvardmagazine.com/2024/03/university-people-the-undergraduate-balance A good summer job and 6-10 hours during the semester are more than doable to deal with costs. Internships are a great idea, but there aren't enough of them available for all students.
"Education shouldn't be treated as a commodity that profits off of people who want to get an education." Yes and no. Students currently invest little in their education, so I am uncertain whether making it free for them would be beneficial. I would also say that there are too many students in college. I don't mind them paying and taking out loans, but how much is another question.
Colleges are not profiting in the same manner that businesses do, but I see the point. Changes are needed, broadly related to how 18-year-olds progress in life. Better apprenticeships, and not necessarily just for traditional trades. At the same time, we send too many people to college, yet we aren't educating society enough or maybe properly.
As to faculty pay, people I tend to talk to don't recommend that students go on to a Ph.D. to try and get a faculty job. They are too hard to get, and pay is hit and miss (I haven't seen a raise that matches inflation for almost a decade).
Overall, I agree there are issues but not at the magnitude suggested. The issue is less with undergrad than it is with graduate programs. Many MS programs are there to generate a "profit" to help pay for undergraduate programs. Endowment and dorms also help cover academic costs. Which brings us back to the fact that college is expensive and cutting costs isn't entirely simple (coming from a place trying to cut costs). Understanding this complex system requires nuance and details.
Thanks for your thoughtful responses and links.
Yes, the problem with the cost of higher education is systemic.
We are preying on our kids. Instead of helping them start their adult lives, we see them as a profitable products from which we can squeeze profits.
You know, society used to cover the entire cost of educating most people. You started with kindergarten and finished with 12th grade (or even less in the past.) And that was sufficient for almost everyone. Now, kids need preschool, which is at the parents' expense. They need higher education, which is at the parents/child's expense. If you consider a year of preschool, four years of college and two years for grad school, that's SEVEN YEARS that aren't generally paid for by society. That's a lot, and most (not all) young people will need this if they want to succeed financially.
There's absolutely no good reason for public education to only cover the years of schooling that were appropriate 50 years ago.
Thank you for this
Of course Gen Z has higher debt. They're younger. Typical lifestyle is borrow when young, save when middle aged, dissave when old. This has been true of every generation since ww2. Trying to present it as a "scare statistics" is at best misleading and at worst dishonest
Again, it is the totality of the data, this generation has unusual challenges that have been aggregated over decades. I am not interested in a debate, if one uses a datapoint among other datapoints that you disagree with to come to a larger conclusion it is not dishonest. You may not agree , but it is not dishonest. Thank you for contributing to the discussion.
Please substantiate your claim.
Google the permanent income hypothesis. This theory has been around for 60 years. There's some disagreement on the extent of it.
Radek is right. It's expected that Gen Z has higher debt and less wealth! Given this, it seems dishonest to use it to validate your point.
I could write a whole post with the exact same data and talk about how good Gen Z has it compared to previous generations.
Also, my conclusion which is very similar to many, is not “dishonest” because it is different than yours . There is nothing dishonest about looking at data and when it is clear coming to a logical conclusion. You must look at all the data. Name calling will not help this generation
I never said your conclusion was dishonest. I was very specific in my criticism. Using a fact that has been true for decades to try to make a point about "how bad the world has gotten" seems dishonest to me. Either that or careless
I guess we have very different conclusions, when. A full generation is faced with higher prices exponentially so, has more built in debt, wages are stagnant and there is no policy for change, I maintain my warrant here.
Can you provide some evidence? I care whether or not young people are worse off than they used to be. Real wages are a decent proxy. Debt is not. Inflation is not. Housing prices is not.
It's very easy to imagine a world where young people have more debt, the economy has more inequality, inflation is higher than it used to be, and real wages are more stagnant than they used to be, but almost everyone is objectively better off and has a higher standard of living!
Read my article. This is officially been a circle, which happens. The circle in now closed. Please feel free to debate on with yourself. My columns are always open places.
Your first graph actually makes it look like a good situation for young workers. Your second graph is just a one-time snapshot and therefore does not make a comparison over time. (There's also another comment explaining why using means is misleading.) Your third point is overblown; home ownership rates are very high for young people. I have no clue how your 4th point is relevant. Your 5th point has been true for every generation. I've already responded to your 6th and 7th point: we should define mobility based on objective characteristics, not relative income. We should also measure the well-being of individuals based on the well-being of individuals, not based on how close they are to being in the top 1%. None of these are controversial takes.
The only real data you provide that implies things aren't looking good is the alleged wage stagnation for 16-24 year olds since 2010. I actually care about this because it's a good measure of objective well-being.
Interesting, but I'm not sure how to square it with this data:
https://economistwritingeveryday.com/2024/01/24/young-people-have-a-lot-more-wealth-than-we-thought/
Also, the section on inheritance is really strange. Of course, Boomers and GenX have much more inherited wealth because they're the generations whose parents have died (which is almost always where inherited wealth comes from). That wealth is all going to flow to GenZ eventually; it's just going to take some time.
Not familiar with his work, but will give it a read