Gen Z, who are currently about 8-22 years old, are the future of our workforce. Very soon, if not already, employers will be seeking to hire the cream of the older part of this crop. One effective recruitment tool could be adding student loan repayment assistance as a benefit. A new study by IonTuition of 1000 college students and graduates gives insight into the perspectives, values and attitudes of our future workforce. The study had over 500 Gen Z aged 18-23, and over 500 other respondents aged 24-40+ (most of whom were Millennials).
Gen Z is Financially Aware and Stressed About Debt
This generation has emerged as more financially conscious, value driven and independent than Millennials. Of those interviewed by IonTuition, 77% identified cost as a very important or the defining factor in choosing a college. Over half of them attend state colleges, compared to just 18% enrolled in more expensive private colleges (compare this with the 49% of the current workforce who graduated from private schools).
A full 93% of Gen Z college students chose their major based in part on future earning potential. And students are also seeking to earn income while still in school. IonTuition’s survey found that 90% of students are either employed or planning to work.
The following chart details the types of jobs students have today:
Despite working, half of Gen Z expect to graduate with over $25,000 in student loans. And they aren’t happy about it—consider the following graph that shows responses to the question, “How stressed are you about paying back student loans?”
Why Are Gen Z Graduating with So Much Debt?
If members of Gen Z are so cost conscious, why are they still piling up so much debt? Although they are trying to keep costs down and save more money for college than previous generations, there are two main reasons they can’t seem to achieve financial stability.
First, college tuition and associated fees significantly outpace inflation. Each year, college is growing more expensive in absolute terms. U.S. News reports:
“The average tuition and fees at private National Universities have jumped 157 percent. Out-of-state tuition and fees at public National Universities have risen 194 percent. In-state tuition and fees at public National Universities have grown the most, increasing 237 percent.”
Additionally, Gen Z is receiving less financial assistance. Just under half of Gen Z college students expect their family to be able help pay for college expenses—for the current workforce, 55% received assistance from family.
How Employers Can Attract the Best Gen Z Employees
These financially-savvy students are looking for creative ways to pay for their education and future careers, including from prospective employers. Of IonTuiton’s respondents, 83% would be more inclined to accept a job offer if it included student loan repayment assistance.
Consider the example of one senior nursing student of my acquaintance. She depends mostly on student loans, two part-time jobs and scholarships to afford tuition at her highly-respected private school. One of her jobs is as a Patient Care Assistant at a hospital, and she will graduate with real-world experience in the healthcare field. She had practical reasons for choosing this job—she believes it could help her start her career at this same hospital when she graduates. She also keeps up with employment trends in nursing, tracking possible career options like travel nursing, which can be lucrative. An employer offering student loan repayment assistance would certainly be attractive to her.
Early indications show that Gen Z have the potential to be creative, strategic and efficient additions to our workforces. Employers that can help them feel more financially secure in the short term and alleviate some of the student loan stress could find themselves hiring the best of the bunch.