It’s become common knowledge that more and more people are defaulting on their student loans. But what is the cause of the student loans default? Are college graduates just lazy? Are they conspiring to overthrow democracy? No, according to the latest facts and figures, there is a much more prosaic reason for this slump.

You’ve probably heard that there are less jobs for college graduates than ever. That is true, but the reasons aren’t well understood. It is true that employers are cooling off their hiring practices, but that doesn’t fully account for what we’re seeing. That means there is some other hidden cause contributing to the underemployment of college graduates – but what could it be?

One trend that may explain this hidden cause is “education creep.” That is the trend of jobs to require increasingly high levels of education, even though the job duties and details themselves are not getting any more sophisticated. In other words, jobs that once required a high school diploma or GED now require a four year college degree. Jobs that once required a four year degree now require a Master’s. And so on.

Once upon a time this was good for college graduates. As high school diplomas no longer cut it, lots of jobs were essentially “reserved” for the 22 year olds graduating from college. Now however as the creep continues, the opposite is true: graduates are fenced out of their chosen profession, and told they need a Master’s for anything respectable. More and more graduates are finding that their degree didn’t help them at all.

This entry was posted on Thursday, December 15th, 2011 at 4:48 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.