There's an unemployment epidemic among college graduates, largely thanks to the pandemic. Over 22 million jobs were lost due to the pandemic, and about 65% have been recovered as of 2Q2021.
According to one study by TwentySomething Inc, 85% of 2011 college graduates are moving back home with their parents. Meanwhile, another study shows that the real unemployment rate for people 25 years old and younger is a whopping 54%! I'm generally very wary of the mass media, because they are filled with bitter journalists who enjoy the pleasure in the suffering of others. However, even if we cut the percentages in half, these figures are still quite worrying.
There's clearly two bubbles in the world today. One is the most awesome Social Media bubble which is a godsend for those in the Bay Area who've been praying for another bubble to arise ever since the dotcom crash of 2000. The second obvious bubble is in the education industry!
Parents and kids alike are delusional into think that private schools are worth their $50,000 a year in tuition. Some are, but the majority of schools aren't worth it.
Defend Yourself From Unhappiness And The Unemployment Epidemic
On the one hand, many are unsatisfied with their existing jobs. On the other hand, many can't get jobs after college and therefore start rebelling against the 9-to-5 system. What results is an all around dissatisfaction which sucks ones soul. It's understandable to reject society if society rejects you.
Is there any wonder why we seek entrepreneurship so aggressively? We want to be masters of our own destiny, without anybody causing us grief and telling us what we can and cannot do. Unfortunately, nothing good comes easy and we'll likely have to still live in mom's basement while we try to build our empires.
Debt Is A Dream-Killer
The biggest reason why a 54% unemployment rate for people under 25 is so worrying is because of debt. In the video below, the unemployed college graduate spent a mind-numbing $200,000 to go to George Washington University. GWU is definitely one of the better universities in the nation, but $200,000 over four years is absolutely a ridiculous amount of money!
$200,000 for Harvard might be palatable, but $200,000 for GWU? No way in hell would I ever pay for my kid to go there. If you aren't in the top tax bracket, and your kid isn't getting any scholarship help, it's irresponsible for parents to allow their kids to go to such a school.
Instead, I'd ask my child to go to UMD, UVA, William & Mary, Mary Washington, and Virginia Tech if there was an insistence of staying in the Northern Virginia area for 1/3rd the cost.
If you had no debt after college, it frankly wouldn't matter too much if you were unemployed for 6 months, or 2 years after graduation. There's no debt service to pay, or thunderous pressure to do something with your life after school. With zero debt, you could spend a year bootstrapping your own business to see how you'll do, with no pressure.
You could take a job overseas making only $12,000 a year purely for the joy of experiencing a new culture, with no pressure. Being debt-free sets you free!
Ways To Save Money And Fight The Unemployment Epidemic
The undergraduate degree is seriously becoming commoditized. As a result, the gap in prestige between going to Chico State for $5,000 a year and Yale for $50,000 a year has narrowed considerably. As a hiring manager, I'll definitely give the edge over the Yale graduate, however, post undergrad positions are generally menial roles anyway, so it doesn't matter so much!
One of the best ways to save money on education is to just go to the best state school possible. Pretty much all undergraduate institutions teach from the same text books, so the educational portion is roughly the same. Some of the best schools in the nation are state schools: Berkeley, UCLA, UCSD, Michigan, Virginia, Wisconsin, and so forth.
The next best way to save is to simply go to community college for a couple years, get fantastic grades and then transfer to that fantastic state school of your dreams. When you graduate, you'll still have the same diploma as someone who went all four years.
Final Way To Fight
Finally, there are literally millions and millions of dollars in scholarship money for students who simply try. “Try” is the imperative word here, because if you never try, you will never get any money. You can go on sites like Fastweb.com to search for tons of scholarships.
Or, you can participate in the quarterly Yakezie Writing Contest, where we give away at least $600 to the first place winner, $300 to second, and $100 to third. I'll accept via e-mail five individual entries from those who've discovered our educational micro-giving effort through Untemplater.com, since the deadline is closed.
You've just got to make the effort. I remember always being amazed at my classmates getting scholarships left and right during college. I never believed I would win anything myself until I applied for one, and voila, I received $500 bucks that went towards my study abroad trip.
It's Real Money Folks!
If you or your parents have the money, by all means, go to your expensive private school. But, if you are like most Americans, with an average household income of under $100,000, then you might want to reconsider spending so much money on just an undergraduate education if 50%+ of Americans under 25 are unemployed. You don't want that type of weight on your shoulders at a time when all you want to do is soar.
Start your own business. If you feel you're not getting paid what you're worth and want to boost your income, start your own business online on the side! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with a hosting company like Bluehost for under $4/month and they'll give you a free domain for a year to boot.
Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I'm not thankful for starting Financial Samurai in 2009.
For more resources check out my:
- Top financial products page to find the best products for your finances
- Invest in real estate page to invest in my favorite asset class,
- Free wealth management page to manage your money better.
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