Fidelity recently updated its College Savings Indicator report, which it has published since 2007. According to Fidelity, about three-fourths of American parents have saved something for their children’s college education. Although the Fidelity survey is obviously designed to promote 529 college saving plans, it does shed some light on the growing disconnection between parents and children on the value of a college education.
While 3 out of 4 parents say they have begun saving for a college education, according to the Education Data Initiative, only about 30% of families actually use a 529 plan. Parents who use a specific savings vehicle (like a 529 plan) end up saving about three times as much as those who don’t. This isn’t trivial; the cost of attendance is the primary reason high school students don’t enroll in post-secondary classes.
Not surprisingly, Michigan parents save about $20 less per month on average than parents nationwide. Accordingly, the average Michigan college savings account was worth nearly 11% less than the national average in 2023.
There is a growing divide between parents and their children regarding the value of a college education. Seventy-seven percent of parents in the Fidelity study said that the value of a college degree is worth the value that the degree delivers. A 2023 survey by Business Insider found that only 39% of Gen Z adults said that higher education is important, and 46% of young adult respondents said college wasn’t worth the cost.
College education needs to have value
Michigan recently zeroed out the cost of attending a community college for up to three years for certain high school graduates, but it remains to be seen how many of them will take up the offer. According to the State of Michigan, about 109,000 students were enrolled in the 12th grade for the 2023-24 school year. The State predicts that about 18,000 or 16.5% of the Class of 2024 will enroll in a community college this fall.
I have no doubt that Michigan’s community college classrooms would be overflowing if they focused on providing programs that prepare students for high-wage, high-demand jobs. Likewise, if our community colleges coordinated more closely with county and municipal governments to create and support economic development initiatives, Michigan would be more likely to capture larger federal grants aimed at capacity-building.
Gen Z young adults aren’t mysterious. They want the same thing everyone else does: jobs that pay well and enable them to enter or remain in the middle class. The difference is that Gen Z won’t settle for less. (And they shouldn’t have to.)
It is reasonable to expect our community colleges to update their programs to keep up with the cost of living, and to help would-be workers enter emerging fields. Until community colleges come around to this position, no one should be surprised that their enrollment will continue to suffer.
Photo Credit: Kyle RW, via Flickr
