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Dive Opinion
Gen Z Takeover: Showing students how to afford college
The newest cohort of learners is more debt-averse than previous
generations, prompting institutions to bring transparency to costs.
Natalie Schwartz
July 31, 2019
This fall semester, 20-year-old Isaac Irvin will spend several hours a
week teaching his fellow students at Indiana University Bloomington
about financial wellness.
The junior is slated to start working as a peer financial educator with
the college's MoneySmarts team, which teaches students through
presentations and one-on-one meetings about budgeting and paying off
loans, among other topics.
MoneySmarts is part of an effort spearheaded by the university to bring
more clarity to college costs. In July, it announced an alliance for
colleges that want to help students improve their financial position.
"When you look at the cost of (college) online, it's going to be
drastically different than what you end up paying," Irvin said. "A lot
of students coming in don't know what they're paying and don't know
what to budget."
All age groups can benefit from more transparency around college costs,
but it could be especially important for Generation Z. That's because
its members, who were born 1997 and later, may be more debt-averse
after watching the nation's student debt load cross $1.6 trillion.
"(Millennials) came in and were in some ways blindsided by the debt,"
said Corey Seemiller, co-author of the book "Generation Z Goes to
College," which examines the defining characteristics of those
students. "Gen Z sees this and is making choices before they're even
taking out debt to be mindful about trying not to put themselves in
that situation."
Research backs that up. Two-thirds of surveyed Gen Zers say paying for
college is their top concern. Meanwhile, in a 2019 survey of high
schoolers, 46% said they would possibly take out student loans, down
from 65% the previous year.
Indiana U's alliance is one example of a growing movement led by
lawmakers, colleges and advocacy groups to help students understand how
they're going to pay for college, which can involve budgeting for a
complex mix of costs including tuition, room and board, and unexpected
emergencies. Add concerns about transparent pricing and potential
changes in institutional or government aid, and it can be a tricky
situation for students to navigate.
Bringing transparency to college costs
The murky information colleges provide students to understand what
they'll end up paying, and how, can be difficult to wade through.
For one, colleges' offer letters have been faulted for being unclear.
Last year, the nonpartisan think tank New America analyzed more than
11,000 financial aid offer letters and found that the majority (70%)
grouped together all types of aid, including loans, scholarships and
work study. Moreover, the letters often used "confusing jargon and
terminology" to identify loans.
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