This college commencement season, graduates can look forward to the best job prospects in years.
But they better find a position that pays pretty well, because they’re leaving campus with the highest debt ever.
Come to think of it, that’s not such a bad lesson for life: It’s rarely all good or all bad. And they should be grateful, since it could be much worse. Only a few years back, they would have graduated during the worst economic downtown since the Great Depression.
According to the available numbers, hiring is projected to increase somewhere between 8 and 16 percent for the class of 2015. Graduates in California and across the country are benefiting from good timing. The economy is rebounding, baby boomers are retiring and companies that put off hiring are short-staffed.
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But new graduates are competing with a backlog of recent grads who also are looking for work and may have more experience. Despite the recovery, the unemployment rate for young college graduates is still north of 7 percent. The underemployment rate – which also counts part-time workers who want full-time jobs and discouraged workers who have stopped looking – is nearly 15 percent.
Both those rates are still higher than in 2007, before the Great Recession, the Economic Policy Institute points out.
As for student loans, the average graduate with a debt will have to pay back about $35,000. Even adjusting for inflation, that’s more than double the debt of two decades ago and it’s nearly $10,000 more than in 2007, according to Edvisors.com, which provides information on college costs and financial aid.
And more students are in hock – more than 70 percent of undergraduates, compared with less than 50 percent two decades ago.
There’s a ripple effect on their families; about 17 percent of parents have taken out loans for a child’s education. Student loans are the only kind of consumer debt that hasn’t decreased since the recession ended, according to Experian, the consumer credit bureau.
Rising debt also has broader consequences for society. A 2011 study by UC Berkeley and Princeton researchers found that large loans tend to push graduates into higher-salary careers. We don’t want the best and brightest to all go to Wall Street or Silicon Valley. We also need teachers, nurses and others in lower-paying public interest jobs.
If I were to give a commencement speech, that would be my advice: We spend so much of our lives at work, find something that’s fun and rewarding – not necessarily what pays the most.
If crushing debt prevents graduates from following their dreams, that’s a real shame.
By the Numbers
The jobless rate for recent college graduates is still higher than before the recession, and so is the amount of debt:
- 2007, 5.5 percent
- 2015, 7.2 percent
- 2007, 9.6 percent
- 2015, 14.9 percent
- 2007, $25,877
- 2015, $35,051
Sources: Economic Policy Institute, Edvisors.com