Congratulations, Graduate -- You're Unemployed

Matthew Ross had hoped to find work in the aviation industry when he graduated from the University of Miami with a bachelor's degree in electrical engineering. But despite applying to more than a dozen companies, he has yet to receive any job offers. So the 22-year-old Ross, who was set to receive his diploma on May 9, says he'll do "whatever it takes" to pay the rent -- and the $250-a-month student-loan repayment that kicks in this fall. If he has to wait tables in Los Angeles, where he's headed, well, that's life. Noting that most of his college friends are jobless, too, Ross says: "Things haven't worked out the way we hoped they would."

That's a big understatement: Job prospects for fresh grads haven't been this bleak in a decade. In 2002, companies hired one-third fewer college grads than in the previous year, according to the National Association of Colleges, and they expect to hire about the same this year as in 2002. The situation is especially dire for engineers, who had counted on jobs in hard-hit tech and manufacturing. "It's getting ugly," says Philip D. Gardner, head of the Collegiate Employment Research Institute at Michigan State University.

Of course, not everyone is hurting: Prospects remain relatively strong in accounting, health care, and education. And there's been a surprising 14% uptick in entry-level hiring at consulting firms, which had cut hiring by 50% a year ago. Still, even many of those lucky enough to get offers are being asked to wait until fall to start so that companies can assess the economy's strength.

How do grads plan to ride out the drought? More than half a million took the entrance exam for grad school classes starting this fall, up from the '90s average of 380,000. Betting that there is a bright future in biotech, many are flocking to genetics and biology, says Thomas Rochon, executive director of the Graduate Record Examination program at the Educational Testing Service. And the number of students taking the Law School Admission Test (LSAT) has shot up 36% from 2001.

The Peace Corps and Teach for America, an organization that places grads in poor and underserved schools, also report a sharp rise in applicants. Students attribute their interest not only to the anemic job market but also to the state of the world. Says Drew Schmenner, an English major at Northwestern University: "A lot of us did a gut check and rethought what we wanted from our lives." He's headed for two years in the Peace Corps.

So is the Class of '03 crestfallen? After all, when these folks started college, the economy was roaring, and their future seemed assured. But having watched the Class of '02 struggle, many have long since readjusted their expectations. Call it Reality 101.

By Jennifer Merritt, with Susan Scherreik, in New York

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