Are Parents Pushing Gen Z Away from Higher Ed?

National college-going rates have now declined for eleven consecutive years. This wave of higher education ‘non-consumption’ started in 2012, reversing a decades-long trend of increased college-going throughout the country.

Many higher ed leaders we spoke to suggested that rising costs were behind the decline in college-going rates, but this explanation doesn’t capture the full story. While it’s true there is a growing belief that college is too expensive, college-going rates have declined most rapidly for prospects with greater ability to attend college, those with higher family incomes and with parents who attended college themselves. Reducing access barriers remains critical work, but this trend suggests that most of the recent growth in non-consumption is due to a lack of interest in college, not lack of access. Read on to see how Gen X’s legacy of student loan debt influences the college-going decisions of today’s high school graduates.

Growth in non-consumption coming from higher-access prospects

There are two main reasons suggesting declines in college-going rates are due to a lack of interest in college. First, despite media claims to the contrary, the actual net cost of college hasn’t increased substantially over the past decade. Data submitted to the Department of Education shows that after adjusting for financial aid, grants, and inflation, the net costs of four-year colleges only increased by around 5% between 2010 and 2019.

New non-consumers mostly from higher income brackets

Change in number of non-consumers by family income, American Community Survey (ACS) 2012-2021

Second, many of the new non-consumers have greater access to higher education. EAB analysis of American Community Survey data showed that all of the growth in the total number of non-consumers since 2012 came from families with household incomes above $100,000. By contrast, the number of high school graduates from families with lower household incomes who opted out of college fell during this period.

Additionally, although children of college-educated parents remain more likely to attend college overall, college-going rates are falling faster for this group compared to would-be first-generation students. From 2012 to 2021 college-going rates fell by 3.2% for high school graduates whose parents had never been to college. Over the same period, college-going rates fell by nearly 5% for high school graduates with at least one parent who earned a college degree.

College-going rates declined more for children with college-educated parents

Change in college-going rates by parental education, ACS 2012-2021

These new non-consumers have the finances and cultural capital to make college possible, but they are still choosing not to enroll. The parents of these non-consumers are at least partially to blame. As the first generation to regularly take out student loans, these parents are far more sensitive to the cost of college. Their shifted perceptions have influenced the opinions and decisions of their children.

Student loan alumni caution children about college costs

Parents continue to be key advisors for children’s college decisions. As today’s parents provide advice to their children, their perspectives echo the steep price hikes that they experienced during their college days. Even though today’s students aren’t seeing prices shoot up, their parents remember college as a period of skyrocketing debt and costs.

Top responses from a 2023 EAB survey asking parents: “What about your child’s college search makes you most anxious?”

• 61%: college costs
• 42%: amount of debt
• 40%: success in receiving scholarships

Most of the parents of recent college students are members of Gen X and attended college in the mid 80’s and 90’s. In 1985, outstanding student loan debt for undergraduates was only $21 billion. By 1996, when the last of these parents would have entered college, the debt had exploded to $186 billion. While many Gen X parents earn more today due to their college education, the loans they took out to pay for this experience remain. The month-after-month reminders of the cost of college, the loan payments, represent a generational higher ed hangover.

The Gen X legacy of higher ed price sensitivity

Many Gen X parents still hold student debt today and are discussing this experience with their children, passing down a sensitivity to the cost of higher education. We see the impact of these parents’ influence on college-going behavior most clearly in increased loan aversion among recent high school graduates. According to the Department of Education, the proportion of students who took out loans in 2020 was 12 percentage points lower compared to 2010, and those that did take out loans did so in lower amounts.

Increased loan aversion should concern enrollment leaders, particularly those at institutions where students typically take out loans. This trend will increase already heightened prospect sensitivities to the cost of college. Yet, the bigger impact of Gen X’s parental influence is the many thousands of additional high school graduates who were unwilling to enroll in college at all. The new non-consumers now account for a 6.5% decrease in the national college-going rate since 2012, and there is little to suggest that their attitudes towards higher education will improve any time soon.

Millennial parents will likely be even more skeptical of higher education

Critical sentiments towards higher education will only grow in the coming years, as new generations of parents bring even greater sensitivities around the cost of college. In fact, while Gen X was the first generation to regularly take out student loans, Millennials are the largest group of student loan borrowers, with outstanding debts eclipsing $1 trillion. If nothing changes by 2029, when Millennials’ children begin to enter college age, we can expect collective attitudes towards higher education to remain as skeptical as they are today, if not more negative.

We can’t go back to the 1980s and 1990s to change alumni experience with higher ed and its rising costs. However, what colleges and universities can, and increasingly must do, is adapt to this new, more skeptical prospect environment. Institutional leaders can counteract the negative perceptions that drive college-going rate declines by:

1. Reimagining the enrollment funnel to better reach non-consumers.
2. Redesigning enrollment experiences to convert skeptical prospects.

To learn how some institutions are getting ahead of this trend, reach out to your strategic leader to join an upcoming presentation of our latest research on non-consumption, and view our latest research on recruiting these more skeptical prospects.