More Debt, Less Return in College, so Gen Z Turns to the Trades

How did America rack up $1.7 trillion dollars in student debt?

I won’t be breaking any news by telling you this, but college is expensive! The average cost of a college education has increased by almost 180% over the past 20 years. For the students and their families who must bear the brunt of those tuition bills, the burden is immense.

Tuition and other costs, such as room and board, average more than $27,000 a year for in-state students and nearly $46,000 for out-of-state students at public universities. In 2023, Sallie Mae’s How America Pays for College report found families with a college student spent an average of more than $28,000 on education -related costs during the 2023-2024 academic year.

Adding to concerns over rising costs, the roll out of the 2024-2025 Free Application for Federal Student Aid (FAFSA) was delayed and plagued by system errors. The FAFSA for the 2025-2026 academic year will see similar delays as federal officials try to iron out the glitches.

And, although the Federal Reserve benchmark interest rates don’t have as much impact on federally funded student loans as they do on, say, a car loan, when interest rates increase, you’ll still see that reflected in student loans, particularly in privately issued loans. For example, a Direct Unsubsidized Federal undergraduate loan had a fixed interest rate of 5.5% for the 2023-2024 academic year. It jumped to 6.53% for the 2024-2025 year.

Between the expense and difficulties in securing timely financial aid packages, the number of students completing the FAFSA dropped by nearly 10% to just under 50% of 2024 high school graduates as of August 2024.

Declining Enrollment and Trust

Young peoples’ interest in pursuing or even completing a four-year degree has been on a downward trend for a while now. Between 2011 and 2021, undergraduate enrollment has fallen by 15%. On top of that, a third of college students either drop out or put their education on hold.

Not only is college becoming more financially unfeasible, but it is also no longer seen as a secure path to a good job and higher earnings by a majority of Americans. A 2023 Wall Street Journal-NORC poll shows that 56% see a four-year degree as a “bad bet,” particularly among those aged 18-34, which includes Gen Z and younger Millennials. Just over a decade ago, a similar WSJ poll found that 53% had confidence in a college degree.

This isn’t to say that college is a dead end or that we don’t need college graduates in the workforce. When I think of HomeServe, there are absolutely roles that need and even require a college degree. And that’s the case at companies everywhere.

Certain jobs will always require a college degree and even advanced levels of higher education. However, some young adults, particularly among Gen Z, are looking at other training and career opportunities, including in the skilled trades.

Gen Z Apprentices Weigh In

Our Gen Z apprentices at the HomeServe of Brooklyn-Queens depot shared their perspectives on making a choice between the skilled trades and college as they were going through their training to become HVAC technicians. They spoke about whether they had received encouragement to pursue a skilled trades career and what had drawn them to the field.

Samuel, 22, needed a good job with solid pay and benefits where he could build a career, so he turned to the trades when his family recommended it. He was intrigued with the idea of becoming an HVAC technician, despite never being encouraged to do so in high school. In fact, he’d been encouraged to go to college. His mother, instead, helped steer him toward the trades, suggesting he might study HVAC or refrigeration.

“I didn’t have enough money to even think about college, and I didn’t like the idea,” he said. “A couple of my friends went and dropped out after a year, so they didn’t have the degree, but ended up with the debt.”

Looking for Longevity, Good Pay

It’s not only about avoiding the debt that can come along with getting a college degree. Gen Z sees skilled labor positions as less vulnerable to being eliminated by technological advances and believe that vocational training can set them on the right path for a good-paying job, according to a New America survey.

Christian, 21, wanted to find a job that had longevity, someplace he could set up a career and work until his own retirement without worrying about his job becoming obsolete. HVAC work caught his attention because it was a mix of disciplines, including electrical, plumbing and air conditioning.

“Trades were more my style of doing things,” he said.

Despite his interest in the trades, Christian didn’t hear much about them at school or from those around him. His mother did have one friend who was in the trades and encouraged him.

“Surprisingly, I didn’t hear much about the trades,” Christian said. “Now, I’m seeing people inspired by me who are finding their own ways into the trades. Two of my friends are doing the same thing now (going into the trades). They were asking me questions about it, how I felt about the trades, how I got into it. We are always going to need trades; the world runs on trades.”

George, 25, had brothers who were in the trades, so he knew early on that’s what he’d pursue. And it was confirmed when he took a shop class in high school. It was in that class where he discussed his career options with his teacher, who encouraged him to pursue HVAC.

“He said if he could go back and become a plumber or HVAC tech, he would do that, because you use so much of your brain and need critical thinking and outside the box thinking,” George said.

When he graduated from high school, he began working in construction with a family friend, who acted as a mentor to him and encouraged him to look into a career in HVAC. He started out working on commercial HVAC systems and switched to residential when he started at HomeServe.

Jerniel, 23, first considered entering the trades after encouragement from his cousin, who also was an HVAC technician.

“He was letting me know it’s a good trade to be in – the money and it’s a career path that you’re never out of a job,” Jerniel said. “In America, it’s good not to be out of a job, and, in the winter, you have heating and, in the summer, there’s air conditioning. There’s always an opportunity to level up, there’s no limit to where you can go with HVAC.”

When he first sought training, Jerniel had recently immigrated from Jamaica, where the building trades were booming because of new development, but HVAC wasn’t something he had considered before.

“It’s always hot in Jamaica, so we don’t do heating,” Jerniel said. “If you went and mentioned HVAC, 99 percent of people wouldn’t know what you were talking about.”

Once he learned it was well compensated and that he would have a lot of freedom and flexibility in the job, he was convinced.

Vocational Enrollments Rising

Jerniel isn’t alone in his training journey. The National Student Clearinghouse Research Center reported that enrollment in vocational programs increased by 16% from 2022 to 2023, and community colleges featuring vocational programs saw their enrollment grow by 17.5% in the Spring 2024 semester.

An uptick in young adults seeking vocational training is great news for the construction and skilled trades industries being affected by the “Silver Wave” of retiring Baby Boomers. These mass retirements are causing delays and increasing costs both on construction sites and for homeowners looking to have repairs or renovations done.

HomeServe Energy Services Trainer Carl Toussaint noted that, for many of the apprentices who pass through his shop, this is the first career and sometimes the first job they’ve had as young adults. To be successful in the trades, they need to have common sense, be able to think outside of the box and have humility, he said.

“If they allow themselves to be taught, if they want to learn, they are going to learn here. Between me and the other (two) trainers, we have 47 years of field experience.

“It’s all about being able to troubleshoot and think outside of the box. I tell them, it’s like only ever having used an iPhone, and you’re handed an Android. Can you use it? They’re both a cell phone and they both do the same thing. But once the training does click, they have it forever.

“A lot of people knock the younger generation, but they are the future of the trades. If we teach them now, then they will be the seasoned techs of the future.”

Trades Advocates Needed ?

Carl believes one of the factors behind the skilled trades gap is that high school students aren’t given an opportunity to learn about the industry. When he was in high school, opportunities to pursue vocational education were more prevalent. Because he thinks students don’t hear enough about the trades, Carl looks for opportunities to advocate for the industry, including speaking at a career day at his daughter’s school.

“(The students) are 11 years old. If (leaders in the skilled trades industry) start planting the seed now, who knows? We need to do that every opportunity that we get.”

Right now, there are huge opportunities available for young adults entering the skilled labor workforce. An April 2024 McKinsey & Company report estimates that industry wages have increased an average of 20% since 2020, and the Stanley Black & Decker Makers Index estimates that there are 650,000 unfilled skilled trades jobs open. I’ve written about the benefits of a career in the industry before – a shorter education cycle, a solid salary and strong demand safe from automation.

Yet, despite these clear benefits and the rising cost of college tuition, Gen Z is still being steered away from the trades. In the McKinsey report, a survey of 18- to 20-year-olds showed that 79% had been encouraged by their parents to attend college, but only 5% were encouraged to go to vocational school.

Kimberley, 24, didn’t have the skilled trades on her radar. She had been encouraged to go to college, as were her cousins, although she had family members who were in the trades.

“I didn’t even think about trade school,” she said. “I wish I had heard more about the trades in high school, maybe I would be a technician now, but I was pushed toward coding, things like that. For my cousins, they weren’t encouraged to go into the trades, either. With my family not bringing it up, it was almost like (being a skilled tradesperson) would end with the older generation.”?

Instead, Kimberley and her high school classmates toured tech start-ups.

“I never thought about (the trades) as an option, because it was never presented to me,” she said.

Kimberley is a first-generation American, and her family strongly encouraged her to go to college. But when she graduated high school, she was wary of taking on the debt that comes along with going to college. Still though, even as she donned her cap and gown, she hadn’t exactly decided on either a skilled trades career or a college degree. Afterall, her cousin who attended college took on a large amount of debt, then struggled to find work in her field.

“She’s working at Whole Foods, making minimum wage with a bachelor’s degree,” Kimberley said. “So many of the people I went to high school with are barely surviving. People I know have been looking for good jobs for so long and are living from paycheck to paycheck. They have more and more responsibilities, and I just think, ‘how can you manage like that?’ I feel so bad for young people (looking for employment).”

Before she started her apprenticeship, Kimberley didn’t realize how well the trades would pay, underestimating what she could make, and didn’t realize how necessary the trades are and how that necessity would mean job security for her.

“People sleep on how important (the trades) are,” she said.

As an industry, we need to meet Gen Z where they are. We need to let them know that a career in the skilled trades is not only financially rewarding and stable, but that we are employing the technology they want to use and offering the purpose-driven work they crave and career advancement they need.

Outreach is Key

Samuel’s outlook on his career became more positive as his apprenticeship has progressed and his skills have improved.

“I’m working on the (HVAC) units, and I get a sense of accomplishment from it. I want to give props to HomeServe – it’s a very good company, and I didn’t realize it was going to be so good. The people here are great and I’m gaining skills that will build my career.”

To reach more of his cohort, Samuel thinks that more tradespeople need to reach out to young people and talk to them about a future in the trades.

“A lot of people are just stuck, but they’re probably not going to go and look for information (about the trades), so you need to go to them with the information.”

Carl noted that his students aren’t just apprentices, but advocates for the trades as well. When others see them succeeding in the field, it creates curiosity and interest.

“These apprentices, as they progress and get into the branded vans, they’re going to be moving billboards.

“Once they get promoted and start driving that big red HomeServe van, people will be asking them about it. It happened to me. When I went back to my neighborhood in that service van that says ‘heating, cooling, water heaters,’ people wanted to know how I liked it, how much money I was making.”

As much as I love to see those HomeServe red vans out and about on the way to service our next customer, we need to do more. We need to follow Carl’s example and speak about the trades to the next generation. We need to make more high school students aware of the choice of trade school. We need to support organizations that advocate for the skilled trades. We need to help more young people going into the trades.

And we will. Stay tuned.