Gen Z and the new education compact

A new generation is reshaping how we think about learning and work. The recent wave of writing on Gen Z’s expectations for education paints a consistent picture: students are pragmatic, purpose-driven, and far more discerning about value than their predecessors. They’re keen to understand not just what they’ll learn, but why, how quickly, and to what end. A similar story will likely be true for Gen Alpha, the eldest of which are currently aged 14.

The argument runs roughly like this: formal education still matters, but only if it’s transparent, flexible, and connected to real outcomes (jobs, earnings, job satisfaction, progression opportunities). This generation has grown up amid volatility - financial (2008 financial crisis with long tail consequences, plus pandemic-related implications on public finances), technological (social media, now AI), environmental (climate change) - and has little patience for opaque promises. They want credentials that compound over time, learning that feels relevant and intuitively linked to their chosen careers, and institutions that match the agility and flex to the world they’re entering.

We enjoyed reading Laura McGinnis' blog ('Gen Z's Reverse Flynn Effect: is it Brain Rot, AI or Just Microplastics'?) posted earlier in the summer, thundering through her personal and Balderton's evolving thesis in this space.

Below are a few ways we’d extend and evolve the conversation, building on the blog's central ideas and layering in some of our own observations.

Education as an evolving value proposition

There’s growing evidence that Gen Z’s relationship with higher education is not rejectionist but conditional. Surveys from the Lumina Foundation show that while the majority still see college/university as worthwhile, belief depends on proof in the form of affordability, ROI, career connection, and transparency of outcomes.

The traditional “degree = job security” compact no longer holds in the same way. The premium on a degree has eroded in several sectors, as Fortune recently reported, with graduate unemployment rates approaching those of non-grads in some fields. This isn’t the death of higher education, but the beginning of a new accountability era: institutions must demonstrate the value and relevance of their offering in real, career-linked terms.

That shift opens space for innovation - modular learning, stackable credentials, and alternative certification models that blend academic rigour with workplace relevance. For investors and institutions alike, the opportunity is to build products that treat education as a continuous process, not a one-off transaction.

We wrote about this some 4.5 years ago. The points still ring true today.

Mental health and belonging as core infrastructure

Another key insight is that well-being is no longer a peripheral issue. Generation Z expects emotional safety, inclusion, and mental health support as part of the learning contract. Universities are already responding through hybrid support models, peer mentoring, and embedding well-being within curricula.

The shift is subtle but profound, moving from “support services” to “supportive design.” For providers and founders, this means embedding psychological safety into platform design, pedagogy, and user experience. A healthy learner is a more persistent, more engaged learner. TimelyCare and other digital-first wellbeing platforms have shown how mental health can be reframed as educational infrastructure, not an afterthought.

Adding a few new layers

1. AI and digital fluency as learning design, not delivery mechanism

As AI becomes an everyday tool, its role in education is not just about access to content, but about redefining assessment, originality, and reasoning. Research from Stanford and others suggests that institutions adopting scaffolded AI use, where students learn to use AI critically, not passively, achieve deeper learning outcomes.

For Gen Z, who will live their professional lives alongside these systems, “prompt literacy” and ethical fluency are as fundamental as writing skills once were. The next evolution of educational technology must centre on this literacy, not merely add it as a feature.

2. Recognising Gen Z’s internal diversity

Talk of “the Gen Z learner” often obscures the range within the generation. A student in Lagos, Manchester, or Mumbai will bring different expectations, access, and cultural frames. Even within the UK or US, differences in class, geography, and digital access shape what “value” means.

As universities and Edtech companies redesign experiences, segmentation will matter: different pathways for different archetypes - career accelerators, mid-career pivoters, first-generation students, and those seeking purpose over pay.

3. The supply-side equation

Demand for change is clear; supply capacity is constrained. Even the most forward-thinking universities face structural limitations - regulation, legacy systems, funding pressures. In the UK, Financial Times reporting highlights universities under strain, balancing quality with declining real funding and dependency on international fees (FT, June 2025).

Innovation, then, will depend on hybrid actors: public-private partnerships, credentialing collaboratives, and startups that act as connective tissue between legacy institutions and new learners.

4. The quiet resurgence of vocational and technical learning

Parallel to this, vocational and technical education is enjoying a quiet renaissance. Across Europe and the US, Gen Z is rediscovering trades and technical pathways as stable, skilled, and future-proof. Business Insider reported rising enrolments in apprenticeships and trade programmes, driven by cost pragmatism and the digital integration of “blue-collar” roles.

The next decade’s winners will be those who connect these worlds, blending cognitive and manual, theory and application, in ways that reflect how Gen Z actually lives and works.

Towards a more collaborative education model

All of this points toward a broader principle: education systems should be built with learners, not for them. Co-design, student feedback loops, participatory curriculum development - these aren’t slogans; they’re the mechanisms through which relevance and trust are rebuilt.

The same goes for measurement. Success metrics must expand beyond immediate employment outcomes to track adaptability, satisfaction, and lifelong earning potential. New frameworks - longitudinal and data-rich - could help institutions align incentives around sustained impact rather than short-term placement numbers.

Initiatives like the University of Manchester’s “Skills for Living” programme show the potential: embedding empathy, time management, and communication within degree programmes. These aren’t “soft” skills - they’re durable ones.

Where the opportunity lies

For investors, policymakers, and builders in the learning and work ecosystem, Gen Z’s expectations are not a problem to be solved but a design brief to be embraced. They point us toward systems that are more transparent, more modular, more human.

If we listen carefully, this generation is sketching a blueprint for the next era of learning - one in which credentials are portable, learning is lifelong, mental health is infrastructural, and AI is a collaborator, not a threat.

That’s not a distant horizon. It’s already being built. If you're one of the builders, please do get in touch - we'd love to talk to you.