By: REAI Team
We all know the saying - go to college to get a good job. The student loan bubble has caused such a increase in tuition that many are wondering if the value is there anymore. Like the housing bubble in the 2000s, the value of the loan is more than the value of the asset. Especially when no one knows what the labor market will look like in 20 years or more, however longer the time horizon needs to be for a supposed return on someone's investment in higher education.
As the western world learned the hard way, there is only so much money the individuals that make up a generational cohort can take out on a loan. It's all the same pool of money. You can't expect young people to shell out a lifetime of money for college and then take out a mortgage five years later.
But Generation Z, seemingly scanning the horizon, is more and more looking to sidestep this dynamic. Does this mean they will earn less? Not necessarily.
Everyday they're hustlin'
Not including code bootcamps and certification programs, the side hustle life has become part of the norm already. Entrepreneurship is becoming more widespread as well. Even if the gross earnings might be less than a traditional Fortune 500 career (at least in the short term), many situations could be seen in a light that those seeking an alternative route come out ahead in their debt to income ratio.
This has direct impact on the next phase in a person's life, when they get their own place. Without jumping into debt beforehand and gaining a distaste for it, the idea of Generation Z driving a rebound in home ownership levels is intriguing. And at an earlier age to boot.
Generation Z could also be entering the market at the bottom of a recession. Speculation has it that we could be entering a recession in between two and ten years - right when Gen Z will start looking for houses.
Nice houses for cheap!
All of these possibilities open up when personal debt is not already taken up by another investment. Hopefully Gen Z will learn from the mistakes of the generation before it.