New Hope on the Horizon
Financial freedom is available to those who learn about it and work for it.
– Rich Dad, Poor Dad author Robert Kiyosaki
A significant part of employee financial security comes from five benefit areas. However, first, you’ve got to set a career path. This article centers on college and career readiness trends for high school graduates and a brief summary on funding methods, including the new Nevada Promise Scholarship which starts next year.
Some employees seek financial stability. Others want the opportunity to climb the income ladder. Successful businesses focus efforts internally on employee development and retention. And benefits can provide both security/stability and growth. They include retirement savings, work/life balance, resources to enhance financial literacy, safety nets for “the unexpected” (insurance, wellness plans, etc.), and programs that increase employee marketability and growth.
But first, you prepare for the job market by putting things in your favor. The US Bureau of Labor Statistics reports that 3.1 million youth graduated from high school last year. About 70 percent enrolled in college. Components of both segments worked – those that went to college (38 percent) and those that didn’t (72 percent) – however, the unemployment rate for those not enrolled in college was twice as high.
Where are the college-bound headed?
The College Savings Foundation (CSF) is a non-profit helping American families save for higher education. In their most recent CSF Youth Survey, graduating high school seniors were heading to public college (44 percent), community college (25 percent), private college (18 percent), and vocational school (eight percent).
Generation Z’s (aka Post-Millennials) are those born in 1995 or later. They deserve great attention because they comprise a quarter of the U.S. population, contribute about $44 billion to the U.S. economy, and are projected to comprise one-third of our population by 2020. They’re generally financially careful and debt adverse. Key factors regarding college decisions included “Costs” (79 percent) and “Career Paths” (69 percent) per CSF Survey. 54 percent are choosing public college, and 20 percent opt for community college. Nearly half consider vocational and career school the same as they think about public or private college. And a little more than half plan to live at home while attending college.
How are they funding school?
Sallie Mae’s 10th survey of parents and students shows parents saving less and students borrowing more. Both are related – the gap from less available savings and income is being filled by debt. Here’s how the average American family financed college for 2016-2017 per their study:
- Scholarship and grants – 35 percent (largest share in 10 years)
- Parent income and savings – 23 percent (down six percent)
- Student loans (up six percent)
- Student income and savings – 11 percent
- Parent loans – eight percent
- Relatives and friends – four percent
Those who borrowed also spent more for college – those without loans spent an average of $17,356 for 2016-2017, and those with loans spent a total of $31,082 (about $13.6k borrowed).
What needs work?
Nine of 10 parents surveyed expected college costs since their kid was in preschool. However, less than half (42 percent) had a plan to pay them.
Free Community College passes in Nevada?
The Nevada Promise Scholarship was recently signed into law. Eligible students may be able to attend participating community colleges tuition-free for up to three years beginning in 2018. The $3.5 million program is a last-dollar program meaning it’s designed to pay remaining registration and mandatory fees not met by other gift aid (Pell Grant, Millennium, etc.). Nevada students leave about $14 million in federal aid on the table because students fail to apply for it. Contact your community college for more details, including the application requirements and deadlines.