Gen Z's Concern Over Student Loan Debt Drives Them to Prioritize Finances Over Passion When Making Career Choices
SAN FRANCISCO, Jan. 22, 2020 /PRNewswire/ -- Student loan debt is a significant driver in Generation Z career choices, with the majority (73%) of students reporting that they will be graduating with student loan debt. That's a key finding from a new survey of current college students from Handshake, the leading career community for college students in the U.S.
The study found that an overwhelming 61% of college students would take a job they're not passionate about due to the pressure to pay off their student loans. In fact, half of Gen Z respondents disclosed that they would take the first job they're offered, with nearly two-thirds (62%) reporting financial pressure as the reason.
Additionally, the students who were surveyed seemed to underestimate the time it will take to repay their student loans. Of the students who will be graduating with student loan debt, nearly half (44%) anticipate a repayment period of 5-10 years. According to the Department of Education, the typical repayment period for borrowers with between $20,000 and $40,000 in federal student loans is 20 years.
"It's a problematic truth that Gen Z has student loan debt on their minds when making crucial career choices," said Garrett Lord, Handshake CEO and Co-founder. "A workplace performs best when it's fueled by passion and built on strong relationships, and employers can give early talent the opportunity to focus more on their transition into the workforce by proactively addressing financial concerns and reiterating the long-term benefits and importance of taking a role driven by interest and passion."
The majority of students (38.6%) expect their starting salary to fall into the range of $25k-$49,999. As the years pass, salary expectations rise, with 45.4% of students expecting to make within $50k - $99,999k within five years of graduation.
Survey findings also revealed concerns by major, gender, and job market confidence among Gen Z:
- Financial confidence post-graduation varies by gender, with data revealing men are more confident (39.7%) in their ability to pay off loans in under five years than women (25.7%)
- Faith in the job market is low, with more than half (52.9%) of all respondents reporting the belief that it's harder to get a job today than when their parents graduated
- The top concerns for students post-graduation are trouble finding a job (25.1%) and paying off student loans (20.1%)
- Financial concerns influence both career choices and academic decisions, with more than half (61%) of respondents admitting to feeling pressured to choose a major that will result in a high-paying job.
To learn more about how Handshake is democratizing opportunities for students and connecting employers to up-and-coming talent across the U.S., visit joinhandshake.com.
Handshake is the leading career community for college students in America. Today, the Handshake community includes 17 million students and young alumni at over 900 universities - including 120+ minority-serving institutions. We connect up-and-coming talent across all 50 states with 400,000+ employers recruiting on Handshake - from every Fortune 500 company to thousands of small businesses, nonprofits, startups, and more. Handshake is democratizing opportunity and ensuring college students have the support they need to find to find a great job and kick-off a meaningful career regardless of where they go to school, what they choose as a major, and who they know.
The online survey of 1,004 US college students, primarily targeting 16-24 years, was conducted by Propeller Insights on behalf of Handshake, between October 17th and October 22nd, 2019. Propeller Insights strives to achieve statistically significant sample that meets the industry standard of a 95 percent confidence level and a 5-percentage margin of error, based on the population being represented for all online quantitative surveys. We work with the leading online sample providers, and the sources we use are based on the project requirements/target, as well as sample size and incidence rate.