Tricia Scarlata
Head of Education Savings
Published:
In brief
The path to a rewarding career still runs through college nearly four years after AI entered the mainstream. Families should not allow tech fears to delay or derail their college savings plans. It’s important to invest regularly in a flexible 529 plan while thinking more strategically about what graduates will get in return – whether from a traditional four-year degree or alternative education.
We’ve yet to see the massive white-collar job losses predicted since ChatGPT debuted in late-2022. Outlooks for the future now vary widely, but here’s where things stand today: First, college graduates continue to enjoy higher salaries, lower unemployment and better career opportunities. Second, students still want the college experience. And third, employers increasingly value the unique human skills it teaches.
College is about much more than earning degrees. It’s about young adults discovering who they are. From four-year universities to community college, trade school and beyond, it’s where students learn how to think, build relationships and prepare for a future stretching well past that first job.
By the numbers: The case for college remains compelling
- Higher salaries: The average bachelor’s degree holder earns $43,000 more than high school graduates in a single year – and this pay gap has actually widened during the AI era.1
- Lower unemployment: The unemployment rate for college graduates currently stands at 2.5% − below its long-term average and the 4.4% rate for high school graduates.2
- Attractive ROI: The Federal Reserve estimates a robust 12.5% return on college, with little decline in the value of diplomas since 2022.3
- Rising enrollment: Undergraduate enrollment has gained nearly 1 million students in the past three years to reach its highest level in a decade.4
- Growing interest: Among non-attendees, interest in college is near a five-year high, with 66% of adults aged 18 to 35 now thinking about enrolling.5
What’s happening in the job market?
Unemployment rates have crept higher in recent years, especially for young white-collar workers. Today, 5.7% of recent college graduates are out of work, up from 4.1% at year-end 2022.7
Although AI gets much of the blame, our market experts believe other factors are at work. The numbers back them up. Since 2023, AI has caused just 6% of all U.S. job losses, affecting only 0.1% of the total workforce.8
As expected, however, the number of AI-related layoffs is rising in 2026, mostly in tech sectors. It’s normal for disruptive technologies to initially replace workers before eventually creating more jobs than it cuts.
In fact, the World Economic Forum projects AI to be a primary driver of 78 million net new jobs globally by 2030.9 Closer to home, a Georgetown study found that the U.S. will add 15.2 million good-paying jobs through 2031 – all requiring education beyond high school.10
Young adults still want – and need – the college experience
It’s very possible AI is making college degrees more valuable, not less. Here’s why: Technology will likely redefine jobs rather than completely replace them. As machines take over routine administrative tasks, companies are demanding more from their employees, including entry-level staff fresh out of college.
This shift in work roles is putting a premium on so-called “soft skills” that are hard for AI to duplicate. The achievers of tomorrow will excel at critical thinking, complex problem-solving, communication, collaboration, leadership and self-management.
Those skills should become even more prized as AI evolves. And higher education remains the best way to master them, both inside and outside the classroom, on college campuses as well as apprenticeships, bootcamps and other job training. Learning to live independently, interact with others and adapt to changing circumstances prepares students well for their life’s work – and for life itself.
Action plan: Maximizing college ROI
As AI expands, it becomes even more critical for families to think strategically about college choices, costs and outcomes. These tips can help:
- Explore all education options: High schoolers are now applying to more four-year universities while also considering alternatives like community college and vocational school, where costs are lower and time to careers is shorter. For example, skilled trades such as plumbing and carpentry are currently in high demand, with little risk of AI taking jobs.
- Focus on ROI: Ask yourself, will my investment in college pay off? What jobs and starting salaries can my child expect? Does the school have good career counseling, placement services and employer relationships?
- Be hyper aware of costs: College ROI goes down as the price tag goes up. Strategies for reducing costs include maximizing investments and free financial aid, limiting student debt, graduating in four years or less, and not changing majors midstream.
- Don’t try to “AI-proof” a college major: Nobody can predict AI’s full long-term impact. Instead of studying for one specific job that might not even exist someday, concentrate on building essential, enduring skills that translate across many different occupations and a fast-changing economy.
- Get work experience during school: Employers increasingly expect to see real-world experience on a graduate’s resume. Many colleges are responding by making internships, industry certifications and hands-on learning part of degree programs.
- Become fluent in AI: Students should view AI not as a threat but a tool for enhancing their job candidacy. Look for colleges that teach graduates to work with the technology rather than being replaced by it.
- Invest in a 529 plan: A tax-free 529 plan helps increase college ROI by reducing out-of-pocket costs.12 Money can go toward any qualified expense at four-year universities, community colleges, graduate schools, trade schools, apprenticeships, credentialing programs and even K-12.
To learn more about college planning and 529 plans, please consult your financial professional.