Would you rather spend four years accumulating significant debt only to face a competitive job market or enroll in a program at a trade school that equips you with a steady income and leaves you with a managable loan balance?
That’s the question many young Americans are asking themselves as the economy shifts in fundamental ways. Here’s why many twenty-somethings are trading business casual for steel-toed boots.
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College isn’t as attractive anymore
A key factor driving young Americans away from a typical degree could be the cost. College tuition at public four-year institutions has surged 141% over the past 20 years, according to the Education Data Initiative, outpacing the general rate of inflation over the same period.
Unable to afford tuition, many have turned to student loans to get by. The average federal student loan borrower has $37,853 in debt and it could take roughly 20 years to pay off, says the Education Data Initiative.
Paying off that debt is even more of a challenge when recent graduates face a tough job market. The unemployment rate for recent graduates is 5.8%, according to the Federal Reserve Bank of New York, up from 4.6% in May 2024.
Perhaps unsurprisingly, college enrollment has been declining. According to data shared by the National Center for Education Statistics, the number of students enrolled in college in the U.S. decreased by roughly 1.4 million between 2012 and 2024.
Increasingly, young Americans have turned to trade schools instead. Enrollment in trade schools grew 4.9% from 2020 to 2023, according to Validated Insights, a higher education marketing firm.
The annual cost of going to trade school can be as low as $4,200, according to SoFi’s summary of Integrated Postsecondary Education Data System data. This price point can make it a cheaper alternative to a typical four-year college degree, depending on the school, program and number of years enrolled.
Blue collar jobs in the trades also face a significant talent shortage. A whopping 86% of construction firms reported they were having a hard time filling salaried roles in 2023, according to a survey by the Associated General Contractors of America.
The rising enrollment in trade schools could cover some of the skills gap in the long term, but many blue collar industries also face unpredictable hurdles that could limit employment opportunities.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Near-term pain
Despite the skills shortage, blue collar workers are not immune to the economic cycle. Apollo Global Management expects a recession this summer triggered by tariffs that could impact employment in trucking and retail sectors.
Job openings in the construction sector have already dropped just over 25% year over year in March, according to the Bureau of Labor Statistics.
For a 20-something American who recently graduated from trade school or joined an apprenticeship program, these headwinds can be discouraging.
But, as the economy stabilizes and the talent shortage persists, these trade skills could prove to be invaluable over the long-term.
If you’re looking to start or switch to a new career, it’s always best to weigh which profession will offer the highest return on your investment and the most personal fulfillment.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
