Marketplace: Overeducated and underemployed: Why a diploma no longer guarantees success
August 6, 2025
“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.