Is College Still Worth It? The AI Disruption and Its Impact on Gen Z and Millennials

The value of a college degree, once seen as a guaranteed ticket to economic success, is under scrutiny like never before. With Gen Z and Millennials increasingly questioning its worth, the rise of AI has amplified fears that traditional education paths may no longer justify their costs or deliver the promised career outcomes. Let’s dissect the data to understand whether higher education remains a sound investment—and where investors should focus.

The Enrollment Crisis: A Generation in Limbo

Gen Z’s skepticism is quantifiable. Over 4.3 million individuals aged 16–24 are now classified as “NEETs” (not in education, employment, or training), a stark indicator of disillusionment with the system. This cohort is also applying 20% more jobs than the class of 2024, yet directing applications toward smaller employers: 37% target firms with fewer than 250 employees, up from 25% in 2022. Meanwhile, government jobs—a traditional safety net—have lost appeal, with applications dropping by over 1 percentage point in 2024.

The shift reflects a broader loss of faith in college’s ROI. A stunning 51% of Gen Z and 41% of millennials believe their degrees are a “waste of money,” compared to just 20% of baby boomers. Student debt is a key culprit: 41% of graduates with loans say debt limited their career growth more than their degree accelerated it.

AI’s Double-Edged Sword: Disruption or Opportunity?

Artificial intelligence is reshaping the job market in ways that amplify generational anxiety. 30% of graduates (45% of Gen Z) feel their degree has been made “irrelevant” by AI, which is encroaching on roles involving routine tasks like programming, basic data analysis, and templated content creation.

Yet, AI also creates new pathways. Fields like nursing, advanced project management, and creative strategy—requiring human judgment and adaptability—are seen as less vulnerable. Employers are now prioritizing skills over credentials: 52% of U.S. job postings omit formal education requirements, signaling a “skills-first” era.

The demand for AI literacy is surging. Platforms like O’Reilly report quadrupled demand for AI courses since 2022, and companies like IBM and Walmart are adopting skills-based hiring to address shortages. For investors, this points to opportunities in edtech platforms (e.g., Coursera, Udemy) and AI training tools.

The ROI Calculation: When Does a Degree Pay Off?

The data reveals a paradox: while the college wage premium (the earnings gap between graduates and non-graduates) has plateaued, certain degrees still offer strong returns. For example:
- Engineering graduates earn an average of $76,736, with a lifetime ROI of 287.7%.
- Associate’s degrees deliver the highest lifetime ROI (1,200.8%), though their median earnings ($55,016) lag behind bachelor’s holders.

However, the upfront costs remain daunting. Public four-year in-state tuition rose by 2.5% in 2023–24, while net prices (after financial aid) have dropped slightly. Yet, 54% of undergraduates borrow, with 32% of Americans calling student debt a “national crisis.”

The delay in ROI is critical. It takes 15 years post-graduation for bachelor’s degrees to turn positive (due to debt), while associate’s degrees break even by year 10. For Gen Z, who face AI-driven job instability, this timeline feels untenable.

Investment Implications: Where to Bet?

1. EdTech and Upskilling Platforms: Companies like Coursera (COUR) and Udemy benefit from lifelong learning demands.
2. AI Infrastructure Leaders: Firms like Microsoft (MSFT) and NVIDIA (NVDA) dominate AI development, creating tools for reskilling.
3. Sectors Resistant to AI: Healthcare (e.g., UnitedHealth Group (UNH)), education, and creative industries may offer stable growth.
4. Student Loan Solutions: Platforms like Upstart (UPST), which offer alternative financing, could mitigate debt risks.

Conclusion: Adapt or Be Left Behind

The data is clear: the traditional college-to-career pipeline is fraying. Gen Z and millennials face a “paradigm shift” where lifelong learning and AI integration are essential to stay competitive. While degrees in high-skill fields still pay off over time, the path is riskier and less straightforward than past generations experienced.

Investors should focus on companies enabling this transition. Edtech and AI infrastructure leaders are well-positioned to capitalize on demand for upskilling, while sectors resistant to automation offer safer bets. However, the 5.8% drop in hiring projections and stagnant wage growth underscore the need for caution—especially in industries where AI is displacing roles faster than new ones emerge.

In short, college may still be “worth it” for those who align their education with AI-resistant skills, but the era of automatic success is over. The future belongs to those who learn continuously—and to the companies equipping them to do so.