SPOTLIGHT: Recent college graduates are struggling
Unemployment among recent college graduates is on the rise:
According to the Bureau of Labor Statistics, “9.7% of bachelor’s degree holders ages 20 to 24 were unemployed in September — up from 6.8% a year prior.”
Recent college graduates are “now spending more time unemployed than job hunters with only a high school diploma”:
According to the Federal Reserve Bank of Cleveland, over the period of June 2024 to June 2025, "37.1% of unemployed workers between the ages of 22 and 27 with at least a bachelor’s degree either found work or stopped looking for work each month," compared to “41.5% of their peers who only completed high school.”
Confidence in higher education is high among employers, but not so much among the general public:
70% of U.S. employers have "high confidence in higher ed," according to an AAC&U-Morning Consult survey published in December 2025.
Only 42% of American adults have the same high confidence in higher education, according to a recent poll by Gallup and Lumina Foundation.
Many Americans now believe college is not worth the high cost:
Since 2013, the "share of Americans who believe a college degree pays off has fallen by 20 percentage points."
63% of Americans say a college degree is "not worth the cost," according to a recent NBC News poll. Less than half (46%) of college degree holders believe college degrees are worth it, given the cost.
Student loan borrowers are "struggling to keep up":
43 million Americans currently have student debt of some variety, and about a quarter of those borrowers are currently "behind on payments."
Over 5 million student loan borrowers (covering over $140 billion in federal student loans) are currently in student-loan default. Student-loan default occurs once a borrower does not make a payment after 270 days.
According to one recent survey, student loan debt is "making it more difficult for borrowers to keep up with their other bills, to find secure housing, or to save for retirement."
42% of student loan borrowers say they are "making tradeoffs between loan payments and covering their basic needs," while 20% of borrowers “are currently in either delinquency or default.”
Sources: Higher Ed Dive, Cleveland Fed, National Center for Science and Engineering Statistics, New York Fed, Higher Ed Dive, The Wall Street Journal, Data for Progress, Institute for College Access and Success, CBS News, Vox
Grade inflation and AI-generated applications are eroding traditional evaluation methods, causing the deterioration of the entry-level hiring process. Companies are increasingly unable to distinguish between candidates, which is forcing graduates to submit far more applications than ever before.
The traditional signals aren't so valuable anymore:
At Harvard, A grades increased from fewer than 25% two decades ago to 60% today, making GPAs nearly meaningless.
Seven years ago, 70% of new graduates' résumés were screened by GPA, according to the National Association of Colleges and Employers. That figure has now dropped to 40%.
Until ChatGPT became available, research suggested that cover-letter quality strongly predicted job performance and hiring success.
At least half of companies now say cover letters are no longer helpful in hiring, with many eliminating them entirely.
Application volume is surging, while openings shrink:
Job postings on career platform Handshake declined by more than 16% in the past year, while the average number of applications per open job increased by 26%.
Students at top colleges are reportedly applying to 150 internships just to get one or two interviews.
The recent-graduate unemployment rate is now slightly higher than the overall workforce rate.
AI screening tools are helping employers manage application volume:
In order to wade through the torrent of applications, many employers are deploying AI screening tools.
Job seekers, meanwhile, are using AI to ensure their applications are not screened out.
Personal referrals are increasingly valuable:
Given the breakdown of the traditional systems, experts say personal referrals matter more than ever.
Read more via The Atlantic
For five years, federal wage garnishments for defaulted student loan borrowers have been on pause. Now, the Department of Education has moved to resume garnishing wages of defaulted borrowers.
This month, the agency "began sending wage garnishment notices," starting with 1,000 notices to defaulted borrowers, representing "just a fraction of the more than 5 million borrowers who have defaulted on their federal student loans."
Wage garnishments can impact up to 15% of a borrower's income, an amount experts say is a "giant hit" at a time when "every dollar counts towards family expenses and saving for the future."
The agency can further move to seize borrowers' tax refunds, something experts say may catch borrowers by surprise.
Seven million borrowers who are enrolled in the Saving on a Valuable Education (SAVE) repayment plan "haven't had to make payments for the last year and a half." Experts say that is going to change, with borrowers forced to resume payments "very soon."
Read more via Scripps News, NPR
Recruiters for some of the country's largest employers are deploying a "more traditional entry-level recruiting strategy" that involves hiring "from a few select universities," according to The Wall Street Journal.
The Journal reports that corporate recruiters are pulling away from their previous strategy that involved "one or two passes through 45 to 50 schools each year."
Instead, they are attending several recruiting events at a "slimmer shortlist of 15 select universities."
Back in 2020, many employers ramped up their efforts to diversify recruiting, expanding outreach "well beyond the Ivy League."
In 2025, 26% of employers said they were "exclusively recruiting from a shortlist of schools," according to a survey of 150 companies cited by the Journal. That's "up from 17% that were doing so in 2022."
The same survey found that "diversity was a priority for school recruiting selection for 31% of employers surveyed in 2025, down from nearly 60% of those polled in 2022."
Read more via The Wall Street Journal
Google and other major tech companies are moving away from degree requirements as the industry shifts toward skills-based hiring, according to recent statements from industry leaders.
Google's job postings requiring a degree dropped from 93% to 77% between 2017 and 2022, according to the Burning Glass Institute.
Google co-founder Sergey Brin told Stanford engineering students the company now hires extensively outside traditional academic pipelines, noting workers without bachelor's degrees "just figure things out on their own in some weird corner."
Read more via Yahoo Finance
