PITTSBURGH — High school students who grew up during the 2007-09 recession whose parents rode out the financial struggle are showing a greater tendency to save for college, avoid debt, and embrace attending two-year community colleges and vocational schools, according to the latest survey by the College Savings Foundation.
Sophomores, juniors and seniors across the country surveyed by the Washington–based foundation in its eighth annual “How Youth Plan to Fund College” survey are targeting schools that will lead them to careers while keeping costs in check. They also appear to be relying less on loans and scholarships as opposed to their savings and expectations for working through college.
“We are pleased to see this year’s high school students demonstrate a strong appetite for making responsible cost-effective choices,” said Richard Polimeni, chairman of the College Savings Foundation. “This bears out the emerging profile of Generation Z students as financially careful and risk averse.”
Gen Zs are young people born during the mid- to late-1990s.
Polimeni said student debt has been a growing concern nationally, now at an all-time high of $1.3 trillion.
“A lot of students are seeing their parents struggle to pay off their own student loans,” he said. “They’ve also lived through the recession and seen their parents have a tough time making ends meet. The way they are assisting is by being more responsible financially and taking more responsibility for their own college costs.”
Part of that financially responsible mindset involves embracing all kinds of education — traditional four-year colleges and universities, community colleges and vocational schools.
Over the past several years, the survey has tracked an increase in students planning to attend community colleges, and this year rose of 5 percentage points to 25 percent.
Among those surveyed, 44 percent are choosing public colleges; 18 percent private colleges; and more than 6 percent vocational schools or career programs.
Forty-nine percent had already saved between $1,000 and $5,000; 27 percent had saved more than $5,000.
Fifty-four had jobs to earn money for higher education, and 85 percent planned to work during college. Twenty 20 percent planned to work full-time.
Reluctance to take on debt was a recurring theme, with 69 percent saying they were concerned about loans.
This year’s survey showed a drop among students who planned to take on debt, to 11 percent from 21 percent last year. The number of high school students who would “possibly” take on student loan debt also dropped to 63 percent from 71 percent. Those planning to take financial aid dropped to 49 percent from 56 percent last year.
Researchers found that parental modeling counts. Just over 70 percent of those students who were primarily saving for college in tax-advantaged 529 plans had parents who are doing so, too.
“We are seeing great engagement between students and parents, and that conversation is helping them be more responsible,” Polimeni said. “Also, there is a modeling effect. The students look at their parents saving money and they model that behavior.”
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