The unemployment rate for recent college graduates reached 5.7 percent in the fourth quarter of 2025, according to the Federal Reserve Bank of New York. Nearly 43 percent of graduates ages 22 to 27 were underemployed at the same time, working jobs that didn’t require the degree they had just finished paying for.
Those numbers land differently depending on how much debt came with the diploma.
What the Debt Costs After Graduation
The median student loan debt for a Black bachelor’s degree holder is $26,000 at graduation, according to the Education Data Initiative. Four years later, that balance is typically larger. Brookings Institution research found that the Black-white student loan debt gap more than triples within four years of completing a degree, driven by lower post-graduation wages and accelerating interest accrual. Black degree holders are the only racial group whose average debt grows rather than shrinks in the years following graduation.
Monthly payments reflect that gap directly. Black borrowers with a bachelor’s degree carry an average monthly payment of $386, compared to $349 for white borrowers with the same credential, according to the Education Data Initiative. Over a standard ten-year repayment plan, that difference adds up against an already unequal wealth foundation.
The Pew Charitable Trusts tracked student loan borrowers who received undergraduate loans from 1998 to 2018 and found that 50 percent of Black borrowers experienced a default, compared to 29 percent of white borrowers. Three-quarters of Black borrowers who defaulted did so more than once.
A degree does not close the wage gap that makes repayment difficult. Brookings researchers found that Black graduates with a bachelor’s degree or higher earn lower median incomes than white peers with identical educational attainment. The debt accumulates on one side while the income advantage the credential was supposed to generate fails to materialize at the same rate.
Hiring Trends for New Graduates in 2025
Job postings for junior-level positions on the hiring platform Indeed fell 7 percent year-over-year in 2025. Senior-level postings rose 4 percent over the same period. The Federal Reserve Bank of St. Louis found that young college graduates between ages 23 and 27 averaged a 4.59 percent unemployment rate in 2025, up from 3.25 percent in 2019.
The Cleveland Fed reported that job-finding rates for recent graduates and workers with only a high school diploma ran nearly equal throughout 2025, a gap that had held firmly in graduates’ favor for decades. The Cengage Group, in a survey of recent graduates conducted in June and July 2025, found that only 30 percent of the class of 2025 secured full-time work in their field. A year earlier, 41 percent of 2024 graduates had done so.
Education and nursing graduates saw stable outcomes. Their programs funnel students into jobs through clinical rotations and student teaching placements before the degree is even finished. Business administration, communications, and general studies graduates, among the most common credentials awarded each year, absorbed the most uncertainty.
Wages and Demand in the Skilled Trades
Elevator and escalator technicians reach a Bureau of Labor Statistics median wage of $106,580 through apprenticeship, with no university degree required. Electricians earn between $55,000 and $80,000. Experienced HVAC technicians working on commercial systems regularly exceed $90,000. The BLS projects wind turbine service technicians will see roughly 50 percent job growth between 2024 and 2034, tied to renewable energy infrastructure expansion.
Trade school programs average between $5,000 and $15,000 in total, according to program data compiled by Research.com. A four-year public university runs approximately $100,000 to $120,000 over the full program, including tuition, fees, room, and board. A trade school graduate entering the workforce two to four years earlier, carrying little or no debt, begins building savings and credit during years when a college-track peer is still in class.
Registered apprenticeships pay wages from the first day of training. The credential is earned while the income arrives, rather than after it.
How to Compare Specific Programs Before Deciding
Broad averages obscure the variables that actually determine whether a given path pays off. A specific school, a specific major, and the realistic salary in that field tell a different story than the general claim that college graduates earn more over a lifetime.
The Department of Education’s College Scorecard allows anyone to search median earnings and debt levels by institution and program. The numbers shift considerably when a specific credential at a specific school replaces the generic category of “a college degree.”
For trades, the Department of Labor’s CareerOneStop tool provides wage data, job outlook projections, and apprenticeship program locators by occupation and location. Registered apprenticeship programs listed through the Department of Labor connect applicants to positions that pay while they train.
The federal student aid application covers financial aid eligibility for both trade school and four-year programs. Many trade programs qualify for Pell Grants and federal loans under the same process used for traditional colleges.
Sources: Federal Reserve Bank of New York, Federal Reserve Bank of St. Louis, Federal Reserve Bank of Cleveland, Brookings Institution, Pew Charitable Trusts, Education Data Initiative, Bureau of Labor Statistics, Cengage Group, Indeed Hiring Lab, Research.com, U.S. Department of Education
