Financial pressure leads a third of Gen Z and millennials to skip college, new survey finds

Young people are struggling to justify the cost of higher education when they already have trouble making ends meet, according to a new survey from Deloitte.

The survey found that one-third of both groups chose not to pursue higher education. Among those, 32% of Gen Z and 40% of millennials cited financial constraints as the main reason they skipped college.

After all, they have to cut back somewhere.

The survey also found that more than half of both generations live paycheck to paycheck, and almost one-third feel financially insecure.

These generations have a lot on their shoulders, says Elizabeth Faber, Deloitte Global Chief People & Purpose Officer.

“This year’s survey spotlights two generations who are grappling with financial insecurity, high stress levels, and mounting climate anxiety,” Faber says in the report.

Going to college seems to be the last thing on their minds, especially as it gets more expensive.

According to Creditnews's student debt tracker, the average monthly payment on student loans is already $200-$299 per month on an average balance of $37,009.

With the recent hike in interest rates on federal loans, those bills will inevitably grow as soon as the 2024-2025 academic year and potentially beyond.

Put simply, many GenZs and millennials are being priced out of college.

In a new world of work, is college even worth it?

The rapidly changing nature of work is throwing another wrench into our views on the cost of higher education.

As emerging technologies and AI blur our view of the future, some students choose to avoid a mountain of debt for a career that may not exist by the time they graduate.

According to Deloitte, 24% of Gen Zs and 18% of millennials stated that they are seeking to acquire skills outside of university.

Six out of 10 from both generations are considering jobs less vulnerable to automation such as skilled trades or manual labor, many of which do not require college degrees.

The report’s authors say there's pressure on educational institutions to evolve to address rapidly changing nature of work if they want to convince students to invest in a college education.

Employers also have a role to play, according to the report.

“There will also likely be a need for organizations to supplement higher education with learning and development opportunities, particularly as emerging technologies make lifelong learning even more essential,” the report states.

While younger generations are deeply concerned about their finances and their future, there’s still good news.

48% of GenZ and 40% of millennials believe their personal financial situation will improve in the next year.

It’s unclear where this optimism comes from, but it’s evident that Gen Zs and millennials aren’t just relying on a degree to secure their future.