April 23, 2014 in Business

College grads’ job market grows incrementally

Paul Wiseman Associated Press
 
Associated Press photo

Luis Mendez, a student at Miami Dade College, left, and Maurice Mike, a student at Florida International University, wait in line at a job fair in Miami last October. The job market for new college graduates is brightening but remains weaker than before the recession began.
(Full-size photo)

Agency warns of loan defaults

A new report released Tuesday by the Consumer Financial Protection Bureau is warning borrowers of a catch that is pushing private student loans into default even if the loan is in good standing.

The federal consumer agency said that borrowers complain of being blindsided when their student loans automatically default when co-signers – usually parents or grandparents – die or fall into bankruptcy. When this happens, lenders demand that the full amount be paid immediately.

Though the federal consumer agency isn’t alleging lenders are doing anything illegal, it is urging lenders to take steps to avoid default.

Los Angeles Times

WASHINGTON – With college commencement ceremonies nearing, the government is offering a modest dose of good news for graduating seniors: The job market is brightening for new grads – a bit.

But finding work – especially a dream job – remains tough for those just graduating. Many are settling for jobs outside their fields of study or for less pay than they’d expected.

The Labor Department on Tuesday said the unemployment rate for 2013 college graduates – defined as those ages 20 to 29 who earned a four-year or advanced degree – was 10.9 percent. That was down from 13.3 percent in 2012 and was the lowest since 7.7 percent in 2007. The drop reflects the steady recovery in overall U.S. economic growth and hiring.

But unemployment for recent grads was still higher than the 9.6 percent rate for all Americans ages 20 to 29 last October, when the government collected the numbers.

“I’m finding that all these entry-level jobs are requiring experience I don’t have or degrees that are just unattainable right out of college,” said Howard Rudnick, 23, who graduated last year in political science from Florida Atlantic University and wound up earning $25,000 a year working for an online shoe company.

“The worst part is that I’m afraid at some point I may have to go back to school to better myself and take on more debt just so I can get a better-paying job.”

Over time, though, Americans who have college degrees are still far more likely to find employment and to earn more than those who don’t. And while opportunities for new college grads remain too few, they’re increasing.

“It really is getting better,” said Jean Manning-Clark, director of the career center at the Colorado School of Mines in Golden, Colo. She said more automotive and steel companies are now looking at the school’s graduates, joining energy and technology companies that have been actively recruiting for several years.

Last year’s female graduates fared better than men: 9 percent were unemployed as of October last year, compared with 13.7 percent of men. Analysts note that the economy has been generating jobs in many low-wage fields – such as retail and hotels – that disproportionately employ women.

“It seems like the jobs that are growing fastest are jobs that are low-wage jobs, service jobs,” said Anne Johnson, executive director of Generation Progress, an arm of the liberal Center for American Progress that studies youth issues.

Other fields that attract women – including health care – weren’t hit as hard by the recession.

Philip Gardner, director of Michigan State University’s Collegiate Employment Research Institute, said women also “have skill sets that employers want … They have better communications skills. They have better interpersonal skills. They are more willing to work in teams.”

The McKinsey & Company consulting firm last year found that 41 percent of graduates from top universities and 48 percent of those from other schools could not land jobs in their chosen field after graduation.

Even in good times, many college graduates need time to find a good job. But researchers at the Federal Reserve Bank of New York concluded earlier this year that “it has become more common for underemployed college graduates to find themselves in low-wage jobs or to be working part time.”

The Labor Department reports that 260,000 college graduates were stuck last year working at or below the federal minimum wage of $7.25 an hour. That’s down from a peak of 327,000 in 2010. But it’s more than double the 127,000 in 2007, the year the recession began.

“Every way you cut it, young college grads are really having trouble – much more trouble than they used to have,” said Heidi Shierholz, an economist at the liberal Economic Policy Institute.

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