Four years after the Covid pandemic began, there are more than 900,000 fewer undergraduates enrolled in college.
The overall rate of high school graduates choosing to enroll in college held steady in 2023, compared to a year earlier, according to a recent report from the National Student Clearinghouse Research Center — which Doug Shapiro, the Center’s executive director, said was “an optimistic sign.” Although the data shows the rate of high school graduates enrolling within a year of their graduation is significantly higher for students from low poverty high schools.
“Large and widening gaps for low-income students continue to be a cause for concern,” Shapiro said.
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Increasingly, worries over rising costs and large student loan balances are causing some high schoolers to make alternative plans after high school, a separate report by Junior Achievement and Citizens found. Junior Achievement and Citizen polled 1,000 teenagers between the ages of 13 and 18 in July.
Roughly half, or 49%, believe a high school degree, trade program, two-year degree or other type of enrichment program is the highest level of education needed for their anticipated career path.
Even more, 56%, believe that real world and on-the-job experience is more beneficial than obtaining a higher education degree.
“Teens are starting to get a clearer idea, if they are not going to go the college route, of what the alternatives might be,” said Ed Grocholski, chief marketing officer at Junior Achievement. Advancements in artificial intelligence and technology training have also helped change the equation for some young people, Junior Achievement found.
‘You may not necessarily need a college degree’
“While cost is a factor, there’s also the recognition that you may not necessarily need a college degree to be successful,” Grocholski said. “That message is really starting to get to young people.”
Between online credits and certifications, there are more career-connected pathways available at a lower cost, according to Grocholski. “College is one pathway I can take, but then there are other pathways — that wasn’t as clear a few years ago,” he said.
A separate study commissioned by EdAssist by Bright Horizons underscored the role student loan debt has played in rethinking the value of college.
Now, 86% of U.S. workers with education debt said their degree wasn’t worth the toll that student loans has had on their overall well-being. Further, 53% of workers said that knowing they would incur additional debt has prevented them from pursuing more education, according to Bright Horizons’ fourth annual education index, which in May polled more than 2,000 adults who are employed either full- or part-time.
The rise of the ‘toolbelt generation’
With college costs now nearing six-figures a year and a ballooning student loan problem, more would-be students are pursuing careers in skilled trades, other studies show.
Over 2012 to 2021, the number of registered apprentices rose 64%, according to data from the U.S. Department of Labor, especially in industries such as construction, public administration and education.
From 2022 to 2023, alone, enrollment in vocational programs jumped 16%, the National Student Clearinghouse found.
A shortage of skilled tradespeople, due to experienced workers aging out of the field, is also boosting the number of job opportunities and pay.
“The great news about economics is the law of supply and demand,” said certified financial planner Ted Jenkin, CEO and founder of oXYGen Financial in Atlanta and a member of CNBC’s Financial Advisor Council.
The college affordability crisis and the rise of alternative career pathways, together, have helped transform Generation Z into the so-called “toolbelt generation,” Jenkin said. And many are benefitting from the secure job track and high earnings potential these vocational jobs now provide.
“The delta between white-collar jobs and good blue-collar jobs is not that big anymore,” Jenkin said.
Federal data also shows that trade school students are more likely to be employed after school than their degree-seeking counterparts — and much more likely to work in a job related to their field of study.