“Go to college, get a good job.” It’s advice that’s at the foundation of the American dream. However, for many adults today — specifically young graduates — it’s not playing out as they would have hoped.

According to the Federal Reserve Bank, in March 2025, the unemployment rate for college graduates aged 22–27 hit 5.8%, compared to an overall unemployment rate of just 4.2%. This 1.6 percentage point gap is the largest disparity between young graduates and the general population in over 30 years – excluding the temporary pandemic-related spike in 2021.

So what’s going on?

One reason is that too many jobs now require degrees that they never used to. Not because the work got harder — but because more people have degrees.

“In society at large, managers have come to see a degree as a minimum ticket to ride,” said Matt Sigelman, president of the Burning Glass Institute, a research organization focused on the future of work and workers.

This shift in perspective has come to harm young graduates more than anyone else.

“Since 2023, like 85% of the rise of the unemployment rate is concentrated in new market entrants,” said Suzanne Kahn, vice president of Think Tank at the Roosevelt Institute. “And the rise in unemployment for college graduates has been like triple that of everybody else, which is just, I think, sort of unprecedented.”

According to Sigelman, 10 million new college graduates are going to join the workforce over the next decade. These graduates will be stepping into a workforce that is increasingly reluctant to make room for them.

“Most of the net additions to the workforce over the coming decade are going to be college educated,” Sigelman said.

Despite their higher education levels, a study by the Burning Glass Institute said that 52% of graduates with only a bachelor’s degree end up underemployed a year after getting their diploma, working in jobs that don’t require their level of education.

Doors shut for workers without degrees

While workers with degrees aren’t necessarily landing jobs, inflated degree requirements are also making things more difficult for workers without them. A study by Harvard Business School found that 6.2 million American workers may be missing out on jobs because of inflated education requirements – meaning their lack of a bachelor’s degree could preclude them from qualifying for the same job with another employer.

The gap has become quite wide between what employers demand and what workers actually possess. According to Burning Glass, only 19% of executive assistants have a bachelor’s degree, yet 65% of job listings now require one. For computer network support specialists, 39% have a BA, but 70% of listings ask for one. Degree inflation is shutting qualified workers out of roles they’re already doing successfully.

This mismatch didn’t happen overnight. This trend traces back to the aftermath of the Great Recession.

“In the wake of the 2009 recession, there was a real push to have young people who were struggling in the job market go back to school and get more credentials,” said Suzanne Kahn.

Colleges were more than willing to meet that demand. Around the country, schools were reinforcing the idea that a degree was the surest path to stability – even if reality was a little more complicated.

“Colleges spend billions of dollars in marketing to families the idea that college is a golden ticket,” said Sigelman. “The result is that our society has been on a college bender and we're just now waking up with a bad headache.”

An oversaturated market

The risk of an overpopulated job market is real. For many young workers, the stakes go beyond a tough job hunt. When degrees don’t land stable jobs, there can be long term consequences besides the $120,000 of debt.

Since 2008, the cost of college has surged. According to the Education Data Initiative, The average cost of college tuition & fees at public 4-year institutions has risen 141.0% over the last 20 years for an average annual increase of 7.0%.

And the payoff for degrees has become less certain. This is a huge problem for those who struggle to find solid footing after graduation. Repaying loans is a difficult many-year journey, and a rocky start market can stretch a standard 10-year repayment plan into decades.

“Kids are told not to worry, that this will all work its way out,” said Sigelman. “But for most of those who wind up underemployed, it's a permanent detour. 52% of college graduates are underemployed a year after graduation, 44% are still working in jobs that don't require a degree 10 years later.”

Not all degrees are created equal

While the deck might seem stacked against young graduates right now, not all paths lead to a dead end. The choices students make, like what they choose to study, can tip the odds in their favor.

“Majors matter, Sigelman said. “Some majors have three times as much underemployment as others with majors in nursing education in some STEM fields having the lowest underemployment risk.”

But it’s not just the field of study that matters – it’s also a reminder that where someone goes to college might matter less than people think.

“The major you choose makes a bigger difference than where you study,” Sigelman said. “A computer science graduate at an open enrollment school has better prospects than just about any other major, and even a highly selective college.”

That pattern holds true in other high-demand fields as well. According to the Burning Glass Institute, among health professions like nursing, the underemployment rate differed by just 1% between graduates of inclusive public colleges and those from selective ones.

Major alone doesn’t solve the problem. Work experience – especially before college graduation – is just as important, if not more so. Internships and part-time jobs help build real world skills and practical experiences. That can make all the difference. In fact, data from the Burning Glass Institute shows that five years after graduation, 54% of those who hadn’t completed an internship were underemployed, compared to just 41% of those who had.

“We know that having an internship gives you the ability to exercise skills in the field, and that means a lot to employers,” Sigelman said. “It also can be an excellent pipeline to a job. Employers have the chance to see you at work. They have a chance to evaluate you, and you wind up with a leg up over peers who didn't have that same experience.”

Still, even following the “right” playbook is no guarantee. For years, young people were told to “learn to code” as a sure path to stability – but now, many of those entry-level tech jobs are among the first being disrupted by AI. A growing number of computer science grads are finding that the jobs they trained for are either being automated or flooded with applicants, making it harder than ever to get a foot in the door, even with these “in-demand” degrees.

The job market may be shifting in ways that feel uncertain to today’s young graduates. But understanding how the market got here can help inform smarter choices moving forward. As the degree alone no longer guarantees stability, students and families are left to weigh the true return on that investment. (Market Place)