Across the United States, college students are planning to set aside their dreams and settle for the first job opportunities they get. They’re doing this because they’re swamped in student debt and will need immediate money to pay off their loans.
That’s the finding of a recent survey of more than 1,000 Gen Z college students conducted by researchers at Handshake, a site dedicated to helping students find jobs after college.
They discovered that an overwhelming 61 percent of students would take a job they aren’t passionate about purely because they feel pressure to pay off their loans. Half of the students went as far as to say they’d take the first job opportunity they’re offered, with 62 percent citing financial pressure as the reason.
“Every generation is marked with its economic challenges, and for Gen Z, it’s about the rising costs of higher education that is driving debt loads higher, paired with the flattened salary growth curve over the past two decades versus inflation,” according to a Handshake update on their findings.
At this point, national student loan debt is at $1.6 trillion dollars, surpassing both credit card and auto loan debt. Roughly 70 percent of students, nationally, have to take out loans to pay for college. And after graduation, the average borrower owes more than $37,000.
Of the students who participated in Handshake’s survey, 75 percent said they would graduate with debt. Just under 38 percent expect to have less than $25,000 to pay off, 23.7 percent will have between $25,000 and $49,999, 8.4 percent will have $50,000 to $99,999, and 3.5 percent will have more than $100,000.
Despite these high figures, the students surveyed seemed to underestimate the time it would take to pay back their loans. Nearly half of the students who took on debt to pay for college anticipated a repayment period of 5-10 years. But according to the Department of Education, the average repayment period for those who borrowed 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,” Garrett Lord, Handshake’s CEO and co-founder, said in a news release. “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.”
According to the survey, today’s students are also very worried about their employment prospects in general, with more than 25 percent saying their “top concern about post-graduation life” is having trouble finding a job.
Overall, they’ve lost faith in the job market, as nearly 53 percent of the respondents reported believing it’s harder to get a job now than when their parents graduated, compared to only 26.9 percent who said it’s easier.
Therefore, students believe they can’t be picky with their employment opportunities and sit around waiting for their dream job. Soon after graduation, student loan bills start piling up. And recent grads need to pay them to avoid tanking their credit.
In light of all this, some 2020 presidential candidates, including Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.), have proposed substantial student loan forgiveness plans.
Sanders’ plan would wipe out all $1.6 trillion dollars in loans. His plan would be funded by a Wall Street tax on stock transactions, bond trades and derivatives transactions
Warren has pledged to eliminate up to $50,000 of student loan debt for 95 percent of borrowers on the very first day of her presidency. She could do this, she claims, without the help of Congress by using the legal authority granted through the Higher Education Act, which gives the Department of Education the power to “modify, compromise, waive, or release student loans.”
