Is university still the best option for Gen Z?

As the gap the vocational skills required for the modern labour force and the skills taught in universities become more disparate, Gen Z are left to question whether the piles of debt are worth it.

The meaning of university has changed a great deal in the past 25 years. Higher education used to be an affordable luxury and a degree was a mark of academic excellence that meaningfully set you apart from the field in many disciplines.

Nowadays, we have a crisis of university and college affordability that ranges from extremely inconvenient (the UK and Europe) to urgent (the US). Due to skyrocketing tuition, the average US student graduates with around $30,000 USD of debt to their name. In most US cities, that’s a pretty hefty deposit on a nice home.

Moreover, higher education institutions are also facing rapidly declining completion rates. Only about 50% of US students matriculating end up receiving their degree, with this number only being marginally higher in the UK at 58%.

And just to bother you with some more stats, more than 40% of new and recent graduates who’ve secured a job have only managed employment in the gig economy, meaning they’re not earning a living wage. The technical economic term for this is ‘underemployed’. The colloquial term is ‘pissed off’.

All this paints a pretty depressing picture for the future graduate. But it doesn’t necessarily stand as in indictment to the university system so much as to the job market. That is, until you consider that 44% of successfully full-time employed graduates in the US end up in a job that didn’t request a university degree in the first place.

Gen Zers have grown up with a prevailing discourse of aspiration surrounding the idea of college. During the late 20th century when most of our parents were young, the white-collar middle class burgeoned, and specialisation took root in more industries. More attainable and more valuable ‘American dream’ type jobs entered the market, meaning that college training degrees became the obvious route of upward mobility for people from working class families.

So, it stands to reason that older generations of teachers and mentors, for whom college meant so much, would push their progeny down the same path. The problems with this are twofold: firstly those who begin degrees due to social pressure are, naturally, more likely to drop out. All the debt and no payoff makes Jack a dull boy.

Secondly, a degree simply doesn’t mean the same thing to employers as it once did. As more people cottoned on to the transformative power of university around the mid-90s, more universities started cropping up with more degree options. The industry began exploiting people’s thirst for qualifications, with the price of college attendance rising by 260% in the US from 1980 to 2014 compared to an average 120% inflation of other goods and services.

The primary purpose of university to encourage knowledge synthesis and innovation gave way to institutions who’s sole aim was to churn out graduates at maximum cost. The market became saturated by degrees that were bought and not earned, and so having one no longer set you apart from the crowd. What was once a clear indicator of intellectual curiosity now had to hold up to more scrutiny.

The value of the degree is now so eroded (bar those from high level institutions already far more difficult to get into), and the cost so high that it’s been a financial calamity for US millennials: overall, two-thirds of home loan borrowers from graduated between 2006 and 2011 have defaulted on their home loans.

As Gen Z reach college age they could be forgiven for looking at their debt burdened predecessors with an air of ‘why the hell bother with this nonsense’?

Experts such as Doug Belkin, education reporter for the Wall Street Journal, believe that fast and cheaper paths to good first jobs are poised to supplant slow, expensive bachelor’s degrees in Gen Z’s estimation, as he states here.

Vocational and trade schools are becoming increasingly popular options for students during their high school years, with the number of students graduating from traditional institutions declining in both the US and UK. Moreover, in the US college admission rates have lowered from 66.2% of high school graduates in 2015 to 65.9% in 2016, and the number continues to fall.

Gen Z seem increasingly to want to get its foot on the first rung of the career ladder earlier, and without incurring any debt, before deciding what secondary or postsecondary education pathways to follow in order to move on and move up.

This desire is compounded by the knowledge that the jobs market is developing at a much faster rate than educational institutions. The World Economic Forum found that only 27% of small companies and 29% of large companies believe they have the digital talent they require. Deloitte has found that in the UK, only 25% of leading digital firms believe that their workforce is sufficiently skilled to execute their digital strategy.

The digital skills gap between what employers need and universities are teaching is becoming so dire that companies have begun to donate large swathes of money to universities and technical colleges, funding courses tailor made for its own workforce. And, if a company is willing to upskill people who are only potential future employees, Gen Z are right to assume that it’s likely willing to develop employees on the job too.

Before bachelor’s degrees became the marker for starting positions in desirable professions, and before universities began concocting carefully market researched and tested master’s programs, ones best option in the labour market was to get your foot in the door with an existing practitioner: to get an entry level job or internship. In many industries this has traditional taken the form of an apprenticeship. In all these cases, the idea is to learn as you go, and the stats show that it would be in the interests of employers to revert back to this system.

Gen Z are already prejudiced against large upfront investments. Why buy a car when you can use Uber or Lyft to summon one at will? Why spend money on a TV package when you can online stream for free?

It makes sense to us to try out the labour market before committing ourselves to an enormous financial burden; many Gen Zers grew up in the 2008 financial recession, and so understand the crippling power of debt. Moreover, higher education is a particularly risky move currently as recent intel suggests traditional universities are in the dark regarding the skills actually needed in today’s work force.

As most employers now believe that the current system of entry-level hiring is broken, the next front in the talent war will be entry-level hiring. And the primary loser in that battle will likely be colleges and universities.

@thredmag

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