Nearly half (46%) of those in Generation Z say their biggest worry is having a large student loan balance when they graduate college (up from 39% in 2012), and 36 percent are concerned about being able to afford college at all, according to the 2nd Annual Generation Z Survey, released by TD Ameritrade Holding Corporation (NYSE:AMTD). When you consider that the cost of college has risen more than 1,120 percent 1 in the last 35 years, that comes as no surprise. But, the survey uncovered many more surprising insights into this group of teens and early 20-somethings.
Gen Z Goes to College … Despite Rising Tuition CostsIn spite of the climbing cost of college tuition, more than half (54%) of those in Gen Z still believe obtaining a higher education is critical to achieving success. And 64 percent agree that college is worth the cost because it helps secure employment.
The majority of those in Gen Z (72%) expect to attend college or are currently attending college, and despite the large price tag, 61 percent plan to seek an advanced/graduate degree. Only 1 in 5 have considered delaying college due to the expense.
How will they foot the bill? According to the survey, members of Gen Z plan to tap several sources to help fund their education. More than two-thirds (68%) say college will be paid for by assistance from scholarships and grants, 55 percent expect to receive some help from their parents, 46 percent say they will be paying for the expense themselves with savings or money earned while working during college years, and 44 percent anticipate assistance from student loans. Regardless of how they plan to pay, according to National Postsecondary Student Aid Study (NPSAS), 52 percent of students can expect to receive some sort of grant and 62 percent of students can expect to graduate with some education debt. 2“While the expense of college has skyrocketed, education is still viewed as critical to establishing a career, which is why it’s more important than ever for families to create a sound plan for how they will cover the costs,” says Carrie Braxdale, managing director, investor services TD Ameritrade, Inc. 3 “There are many options for advanced planning, like 529 plans or Coverdell accounts. And for those who may not have planned ahead, there are still resources available to help. The key is for parents and kids to clearly outline how they will manage paying for college, and how that fits into other long-term financial plans.” Sitting down with your child and developing a plan to pay for college is also a great opportunity for parents to teach financial responsibilities to their children. And the conversation may not be too tough. These teens and early 20-somethings seem to understand the importance of saving money. If given $500 a whopping 70 percent would save at least a portion of it – and 34 percent would save it specifically for college.