Gen Z is rewriting the American Dream, and their parents are funding it—using tuition money for down payments, instead

The cost of college has never been higher. But for a growing share of young Americans, the return has never felt more uncertain. Faced with rising tuition, stubborn student debt, and a cooling job market, many are questioning whether a four-year degree is worth it at all. Now, their parents are coming to a similar conclusion—and acting on it.

Instead of prioritizing tuition, more families are putting their money toward something they see as a better investment: helping their kids achieve homeownership.

Seventy-four percent of parents with children at home would consider or have already started financially planning to help their kids buy a home, according to a new report from Northwestern Mutual. Among those parents, 29% say helping their children purchase a home is more important than paying for college tuition.

Ashley Russo, a wealth management advisor at Northwestern Mutual, said parents are increasingly redefining what financial success looks like for their children—shifting from degrees to deeds.

“Parents are looking for concrete ways to improve their children’s economic starting point. A down payment, a co-sign, or help with closing costs translates into immediate buying power and often functions as intergenerational seed capital,” Russo told Fortune. 

There’s financial logic behind the pivot. Much like saving early for retirement, entering the housing market sooner can have an outsized impact on long-term wealth. According to a generational wealth report from Realtor.com, Americans who buy a home at age 30 have a 22.5% higher net worth at age 50 than those who buy in their mid-to-late 40s. 

The window to do that has been shrinking for years — but may be cracking open slightly. After a period of relentless price appreciation, U.S. home prices are expected to largely stall in 2026, according to J.P. Morgan, potentially giving first-time buyers a rare moment of breathing room. It’s come at a cost, though: the share of first-time buyers has already dropped to a record low of 21%, and the typical age of a first-time buyer has climbed to an all-time high of 40, according to the National Association of Realtors. High mortgage rates and a punishing cost-of-living crunch have seen to that.

For many in Gen Z, the path to the American Dream is increasingly running through their parents. Already, 38% of Gen Z homeowners received financial help from family to buy their home, and 44% of those who haven’t yet purchased say they plan to do the same when the time comes, according to Intuit Credit Karma.

College is becoming less enticing for some families, but parents might not be able to afford the shift

Parents shifting money toward a down payment doesn’t necessarily mean they’re abandoning higher education altogether. Instead, Russo said, many are trying to better position their children to build wealth earlier—and stay resilient in an uncertain economy.

“That perceived immediacy and tangibility is powerful, especially when compared with the longer, less certain return profile of higher education today,” she added.

The numbers underscore that transformation. Over the past three decades, average tuition at both public and private four-year colleges has roughly doubled after adjusting for inflation, according to the College Board. The average federal student loan balance has climbed to about $39,075 per borrower—and with the federal government restarting loan repayments, those balances are once again squeezing budgets. 

Meanwhile, unemployment among young workers has ticked up, and underemployment remains a stubborn problem for recent graduates entering a labor market that isn’t fully aligned with their field of study.

Still, the picture isn’t entirely bleak. Many college graduates continue to see strong earnings and career stability over time, and widespread fears that degrees would suddenly become obsolete haven’t fully materialized. Instead, the return on college is becoming more uneven—varying widely by field, school, and how graduates apply their skills.

That unevenness is putting pressure on families. About 64% of parents with Gen Z children aged 18 to 28 still have their adult kids relying on them for money, housing, or other financial support, according to Wells Fargo. However, more than half report it’s straining their own finances—and ultimately, retirement goals —stemming from a lack of communication between families about how much money is needed, when assistance might be needed, and whether it needs to be paid back.

Like parents, business leaders aren’t giving up on college—but rather seeking redefinition

Even some of the top voices in business are urging a more nuanced rethink—not a rejection—of higher education.

Warren Buffett—who still lives in his Nebraska home he paid just $31,500 for in 1958—has long downplayed the importance of elite credentials in hiring.

“I never look at where a [CEO] candidate has gone to school. Never,” Buffett wrote in his 2024 annual report to Berkshire Hathaway shareholders. “There are great managers who attended the most famous schools. But there are plenty … who have benefited by attending a less prestigious institution or even by not bothering to finish school.”

At the same time, leaders aren’t advocating abandoning education, but rather reframing it. Hugo Sarrazin, the CEO of Udemy, told Fortune last year that the future isn’t about choosing between degrees and skills—but combining them. 

“It’s cohabitation,” he said. “I think you start with a degree, there’s a foundation that comes with a degree, but you need the skills to be relevant in the workplace.”

For families navigating rising costs and uncertain returns, a similar hybrid approach may offer the clearest path forward: college alone isn’t the silver bullet it once was, but the Northwestern Mutual survey shows that investing in a home is still widely viewed as a worthwhile move.

This story was originally featured on Fortune.com