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The job market is hot. So why are half of U.S. grads missing out?


Millions of Americans are seeing little return from their expensive college degrees — even in today’s hot job market.

For the first time in decades, recent college graduates are more likely to be out of work than the population as a whole, according to the New York Federal Reserve. And for the lower-earning half of college grads, the wage premium is shrinking fast.

Unemployment among Americans ages 22 to 27 who recently earned a bachelor’s degree or higher was 3.9% in December — about 0.3 percentage point above the rate for all workers.

It’s another worrying sign for a generation that borrowed record amounts of money to get through higher education as the cost of tuition soared. The $1.6 trillion in U.S. student debt, which has doubled in the last decade, is weighing on the economy and spurring politicians to offer fixes as diverse as targeted aid and across-the-board forgiveness.

The strong job market should be helping graduates pay what they owe — and at the top end of the wage scale, it is. But in recent years, although high school graduates have seen a sharp pickup in earnings, the lower-earning half of college graduates haven’t — and the gap between them is now the smallest in 15 years.

More than 4 in 10 recent graduates are working in jobs that don’t usually require a college degree, the New York Fed said. And roughly 1 in 8 is working in a field where typical pay is around $25,000 a year or less

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