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20% of college graduates with student loans eventually give up on their

preferred line of work to get a better paying job to help pay off their debt.

What causes this? A simple misreading of the labor market. Supply outstrips

demand. The Center for College Affordability and Productivity (CCAP)sums itup pretty well:

Basically,college graduates were supplied at a higher rate than the labor market

demanded, with the predictable result that they were forced to find employment in lower-

skilled occupations.

Its been the unofficial policy of many leaders, political and otherwise, to

champion higher education as a universal good. Not because theyd studied

the demand for certain types of educated workers, but simply as a catch-all

solution. The market has long since adjusted to this, but the advice hasnt: its

still selling people indiscriminately on a level of education that employers

dont seem to be asking for.

This situation illustrates a major logical flaw in the college argument: if a

degree confers advantages over people who dont have one, what happens

when more people get one? The benefit is relativethe more people who take

the advice, the less it makes sense. If this is part of the intelligentsias case,

they need not have spent so much time in school: eighth grade dropout Yogi

Berra proved himself perfectly capable of the same error when he said that

nobody goes there any moreits too crowded.

Degrees, of course, are not worthless. Part of the argument in their favor is

that even the underemployed are getting better jobs than those without

degrees. But the advantage is smaller than graduates expect, and shrinking, to

boot. The average college student overestimates how much theyll earn after

they graduate by a massive 45%. And from 2000 to 2007which is measuring

a period of significant economic growth beforethe recession, mind youthe

earnings for college graduates between the ages of 25 and 54 dropped 8.5%.And these were jobs that werent especially high-paying to begin with.

The most sobering numbers, however, arent about salaries, but about how

debt can put peoples lives on hold. Almost 45% of recent college graduates

put off buying a house because of their debt, and 55% delayed saving for

http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/http://www.forbes.com/sites/ccap/2010/12/20/is-america-saturated-with-college-grads/

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retirement because of it. 14% of recent graduates put off marriage on account

of their debt, and 28% put off having children.

The effects of a graduates debt ripple throughout every aspect of their lives,

both personal and professional.

In the next installment, were take a look at dropout rates and post-graduation

dependency.

http://www.forbes.com/sites/thecollegebubble/2014/08/15/overqualified-and-underemployed-the-

job-market-waiting-for-graduates/