You’re an overachiever. You’ve worked hard your entire life to earn the much coveted college diploma. In high school you studied really hard, even on the weekends when your friends were out playing ball or going to parties. You have worked since you were 14 to earn extra money. Then, in college you worked part time and summers to help pay your own way. Your parents have made financial sacrifices on your behalf. You took out a student loan certain that you would be able to pay it off after college when you got your first real job. And now, you’ve made it. You’re a college graduate. The pot of gold at the end of the rainbow that you’ve worked for your entire life is yours.
But, wait, where are the jobs? You kept up your end of the deal. Now, at the age of 22 you find yourself unemployed or underemployed, heavily in debt, and disillusioned. You’re supposed to be holding down a six figure job with high upward mobility, but instead you’re stacking shelves in a Wall Mart. You’re supposed to be living in a cool bachelor pad in a nice neighborhood, but instead you’re back living with your parents in your old room. What’s going on? What happened? How are you supposed to get married, start a family, pay back your student loans? That, friends, is the essence of the plight of many college graduates.
The conventional wisdom has always held that a college degree is the pathway to success. Traditionally, the level and quality of one’s education has been the most reliable indicator of one’s economic success in life. That may still be the case for some, but whether it’s the current state of the economy or something more permanent, the fact of the matter is that presently there are simply not enough quality jobs for all college graduates. More students are graduating college than ever before, which is great as far as it goes, but about half of them end up working in jobs that do not require a college degree, such as waiting tables, driving a taxi, or working at the local deli counter. For example, we classify fire fighting and driving a taxi as blue collar jobs, yet 15% of them have college degrees.
Persons with some college degrees are more employable than others. For example, holders of economics and engineering degrees are faring better than business majors, which are eight times more likely to have to settle for a lesser job, if they can find one at all.
Then, there is the issue of student loans. It now requires a king’s ransom to pay for college, especially a private school. In addition, many colleges stretch out the process to five years or more. Student loans and other financing is relatively easy to obtain, but you have to pay it back someday. In 2012 the average student debt was nearly $30,000. Many professions, most notably doctors and lawyers, require additional schooling. For example, a typical doctor could be in school until his or her 30’s earning little or no money. Then, when he commences his career he could have a student debt in the mid six figures. Today not every doctor earns substantial money, certainly not right away, so they could spend most of their working lives paying off their student loans. The delinquency rate is 12%. Don’t be surprised if student loans are at the center of the country’s next financial crisis.
CONCLUSION AND PREDICTION
It’s no wonder that surveys show a considerable level of disillusionment of college graduates. Like I said, you work your whole life to achieve a certain goal, and when you do, there is an expectation that it will bring you success, status, and satisfaction. But, then you discover there is no pot of gold at the end of the rainbow, just frustration, disappointment and your old room in your parents’ house.
Hopefully, the situation will be resolved when economic growth returns. However, one note of caution. The present immigration bill, which is expected to become law in some form, will likely add many millions to the labor force. In many cases, they will be competing with the college graduates for these jobs at the lower end of the market.