Gen Z graduates struggle with financial illiteracy amid rising debt and job uncertainty

Gen Z students and recent graduates are facing a growing crisis of financial illiteracy, with many entering the workforce unprepared to manage their personal finances despite strong academic performance. According to recent insights, this generation is notably reluctant to discuss money, finding conversations about debt and salaries more uncomfortable than discussions about politics or sex. This reluctance, combined with a lack of financial education, leaves many Gen Z individuals struggling to navigate real-world financial decisions such as credit scores, healthcare deductibles, and retirement planning [1].

The issue is further compounded by the challenging economic and labor market conditions these graduates face. Recent data from Handshake indicates that over half of the Class of 2025 are pessimistic about starting their careers, amid widespread automation, generative AI-driven industry shifts, and high costs of living. These pressures are not just about job prospects—student loan repayments have resumed, credit card debt is rising, and the cost of basic necessities remains high. As a result, colleges are increasingly expected to provide more than just career services; they must also equip students with practical financial skills [1].

The disconnect between academic success and financial readiness is particularly evident in the experiences of recent graduates. Even those with strong math and analytical backgrounds often lack the applied financial knowledge necessary to make informed decisions post-graduation. A former governor and education leader, who is also the mother of three recent college graduates, notes that many students are overwhelmed by the complexities of financial planning. Despite understanding numbers, many have not been taught how to apply this knowledge in a practical financial context [1].

The lack of financial literacy is not just a personal issue—it affects broader economic outcomes. Recent research from Jobs for the Future, the Walton Family Foundation, and Gallup highlights a widespread knowledge gap among both Gen Z students and their parents regarding job markets, career pathways, and associated pay and benefits. Approximately 40 percent of parents admit to knowing little to nothing about the types of jobs in demand, while students report even less understanding. This lack of awareness contributes to a cycle of uncertainty about financial futures and career opportunities [1].

Collegates must respond by integrating financial education more deeply into their curricula. One potential solution is the adoption of interactive learning experiences, such as Intuit’s Hour of Finance, which simulates real-world financial decision-making in an immersive format. These programs help students understand the trade-offs and complexities of managing income, expenses, savings, and long-term goals. Such initiatives, when embedded into senior-year programs or specific majors, provide students with practical, hands-on experience that bridges the gap between education and real-world financial life [1].

Given the economic, technological, and social challenges facing today’s graduates, a college education must go beyond traditional career preparation. Students need clarity, confidence, and competence in both the workplace and their personal finances. Institutions can no longer treat financial literacy as an optional component of higher education. Instead, they must recognize it as a core element of career readiness, ensuring that students are not just equipped to earn, but also to manage and grow their financial futures wisely [1].

Source: [1] I’m a former governor, an education leader, and mother to recent college grads. Gen Z alarms me with their financial illiteracy. (https://fortune.com/2025/07/31/gen-z-least-financially-literate-generation-college-higher-education-jane-swift-governor/)