What’s your reaction when you hear that around 73% of Gen Zers are going to graduate with student loan debt? Are you pulling up the shocked Pikachu meme? After all, we know that student loan debt isn’t just a problem — it's a crisis. Millennials are financially lagging behind previous generations thanks to their loans, and according to this real-time student debt clock, at time of writing there’s around $1.7 trillion dollars of total student debt in the U.S.
A new survey conducted by college career platform Handshake is giving us a detailed look into what the crisis will mean for Gen Z. The company surveyed over 1,000 college students, mostly between 16 to 24 years old. It found that almost 3 in 4 Gen Zers will have student loans to pay off, with about 38% owing less than $25,000. 23.7% will have anywhere from $25,000 to under $50,000 in loans. On the highest end, 3.5% of graduates will owe over six figures.
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The fact that 73% of Gen Z students will graduate with debt isn’t a big jump compared to past years. What is surprising, though, is that 61% said they would take a job they aren’t passionate about so they could pay off their loans. Half of the respondents went even further, saying that they would take the very first job they were offered. Another 61% said that they felt pressure to choose a profitable college major. Anxieties about the urgency of paying off student loans make sense: Debt loads are increasing, but salaries aren’t tracking proportionately. On average, those who have between $20K to $40K in student loans take 20 years to get debt free.
The study also found an interesting (but again, not entirely surprising) gender difference in payment expectations: Almost 40% of men surveyed felt confident that they could pay off their loans in under five years, while just 25.7% of women said the same.
1,000 students isn’t a huge number of people, but the survey adds to growing insight into how Gen Zers are approaching college, with job outlook being a top factor when choosing majors. So far, signs point to Gen Z becoming the most educated generation ever.
How will this change the landscape of job hunting in the near future? Is Gen Z going to usher in a wave of STEM majors like we’ve never seen before? Will employers have too much leverage, knowing that fresh grads will probably say yes to the job?
Maybe due to their willingness to accept positions they aren’t truly excited about, Gen Zers are fairly optimistic about how long it’ll take them to be employed. 20.4% believe they’ll have one upon graduation, and 26.6% believe they’ll have one within a month of leaving school. About a third think they’ll have one within three months. 64.5% would be somewhat or very willing to relocate for a job.
One thing it definitely means? Student loan literacy — what types there are, how to defer them, how to lower monthly payments, which loans to pay off first and what your options are when you just don’t see a way out — is more important than ever. If you're looking to learn more yourself, resources like the Federal Student Aid website and Student Loan Hero are great places to start.