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People are surprisingly adaptable.
You can be sure there will be fallout from social media, generative AI, and cutting corners in our education system. Is this going to set us back in terms of "progress"? That depends on how you measure progress.
Once things break down, and they will break down because they can't be maintained without the skills that built them, people will have to relearn how to do things they've relied on tech for, including how to think critically.
Undereducated and ignorant doesn't mean stagnat and lacking in ability. The world they find themselves in when they hit 40 may be harsh, but that might help to cement the lessons it teaches more quickly. It will likely be painful, but it would be painful for someone from Gen X or a Millennial as well. They'll have to learn to adapt to a new climate, a new economy, and a new culture that we can only speculate about. Much of the knowledge and philosophy we've considered essential to daily life may be useless to them anyway.
So, as a generation, they're "lost" to us... but probably not so lost they can't find themselves after we're gone.
Happy and fulfilling lives... I prefer Matthew Inman's take on the subject of happiness. By that standard, some of them will probably find satisfaction and fulfillment in things we don't yet know or understand.
cutting corners, imply you still want education around. its downright slashing it to pieces so none exist. they need thier cannon fodder for military, and low wage workers, and brownosers for ice/CBPD and LEO. this wont work if people are too educated.