HIGHER EDUCATION BUBBLE UPDATE: Overqualified and Underemployed: The Job Market Waiting for Graduates.

There’s a word for someone who has a job that does not require the degree they hold: “underemployed.” In 2008, over 35% of college graduates were underemployed; by June of last year, the Federal Reserve Bank of New York reported that a whopping 44% of graduates were underemployed. And it’s not just because of the recession: the number’s been rising since 2001.

The more education a person has, the worse the numbers get. In 2008 22% of people with PhDs or professional degrees and jobs were underemployed. That number rises all the way to 59% for people with master’s degrees.

When you think about the financial situation most students are in, it’s not hard to see why this happens. Higher levels of education do not merely add to your job prospects—it forces you to shift them upward. This means some higher-paid positions become feasible, but some lower-paid ones suddenly aren’t, either because the graduate refuses to take a job below their education level, or (more commonly) because the extra student loans make it financially difficult to do so. And over qualification (and with it, turnover) is a real concern for employers filling low-level jobs. . . .

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 they’ll earn after they graduate by a massive 45%. And from 2000 to 2007—which is measuring a period of significant economic growth before the recession, mind you—the earnings for college graduates between the ages of 25 and 54 dropped 8.5%. And these were jobs that weren’t especially high-paying to begin with.

The most sobering numbers, however, aren’t about salaries, but about how debt can put people’s lives on hold. Almost 45% of recent college graduates put off buying a house because of their debt, and 55% delayed saving for 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 graduate’s debt ripple throughout every aspect of their lives, both personal and professional.

Indeed they do.