College graduates play game of high risk and high reward in struggling economy

Katherine Trujillo, 23, was thrilled the week that she talked to Raw Story. Though she walked in the graduation ceremony last May from the University of California at Berkeley, the stress of looking for a job since then plagued her with constant stomach pain, but that struggle finally came to an end with a full-time job offer.

She has more than $30,000 in student loans to pay back, and decided to move earlier this year to Washington, D.C., where job prospects tend to be really good for college graduates. "Everyone told me to move here first," she said. She now shares a one-bedroom apartment with two other people in a neighborhood in Northwest D.C. called Brightwood.

It took months of networking, volunteering and sending around her resume once she arrived before she finally got a job offer in late August.

"In the beginning I was very, very picky. I only applied to positions I was very very interested in, but I never got any call backs," she said. Eventually, she was "utterly frustrated" after sending in 60 applications a week. "It does take a big toll on your health," she said, compounded by the fact that she didn't have health insurance.

Her new job is one she got through a connection -- someone she met through someone she got to know during a fellowship she did. She calls her luck in finally landing a job "random." "I’m really grateful. I’m optimistic," she said.

As a first-generation college student and the child of immigrants, she really dreams of working in the foreign service, and hopes to take the exam later this year. In many ways, Trujillo represents the mix of hope and uncertainty that many college graduates face these days. Taking out enormous amounts of student loans seems risky, but the potential for reward with a college degree is high in this increasingly uncertain economy.

Recent college graduates, like everyone else, have taken an economic hit. A report on the depressing outlook for college graduates from the Economic Policy Institute pointed out, "Between 2000 and 2011, the real (inflation-adjusted) wages of young high school graduates declined by 11.1 percent, and the real wages of young college graduates declined by 5.4 percent."

But going to college seems like it's worth the investment. A recent analysis by Georgetown University's Center on Education and the Workforce (CEW) showed those who best weathered the recession were college graduates. Reacent four-year college graduates face an unemployment rate of 6.8 percent while those with just a high school degree is at 24 percent, according to the report.

CEW Director Anthony P. Carnevale noted that "it is true that that the financial collapse cost us a lot of college jobs" -- even among college graduates who are employed, the report found some 14 percent are employed at jobs below their skill level. Still, the economy continued to add jobs for college graduates throughout the recession.

Carnevale explained that the United States began going through a structural economic change in 1983 in which most jobs went from requiring a high school to requiring more education. Now, the jobs that high school graduates lose during economic recessions are looking more and more likely to be gone for good.

"The bottom line is, compared to anything else, the only thing more expensive than going to college is not going to college," Carnevale told Raw Story. "We compete now for our positions in the middle class and the upper middle class."

It's a sentiment President Barack Obama has echoed. When he spoke to students in Reno, Nevada last month, he called education a "pathway to the middle class."

In this economic recession, there are seemingly endless stories about college graduates who are out of work -- or working low-paid jobs. When Raw Story asked about this genre of journalism, Carnevale chuckled about the classics majors he runs into at Georgetown. "There's nothing more terrifying than the notion that education, which is the only thing you can control for yourself or your children, doesn’t work," Carnevale said.

Terrifying as that might be, however, he pointed out there might be something even more sinister going on: far too many people face barriers to getting into college in the first place. Increasingly, for-profit colleges -- from giants like University of Phoenix and Kaplan University to independent for-profit colleges -- target low-income students and students of color. This is problematic because, as a group, for-profit colleges produce nearly half of all defaults on student loans, which likely means that kind of higher education is less likely to translate into increased earning power.

This creates a problem when we think of education as means of sorting out the best and brightest of students when reality shows that the best indicator of whether you attend college is determined by how much money your parents make.

"The African American, Hispanics, working class, and low-income youth are concentrated in two-year schools more and more," Carnevale said. "And white and affluent students are concentrated in four-year schools and their concentration grows as you go up the selectivity ladder. That is, the more selective the four-year school, the whiter and richer it is."

"We like the idea that education redistributes wealth because it still connects to individual responsibility. You don’t get the money just because you don’t have money, you get the money because you worked for it," Carnevale said. "In fact, people have disadvantages in that make education very unequal. There’s a dilemma here, though it’s a nice dilemma to have."

Higher education remains the best way to get to (or stay in) the middle class, even if prospects seem grim right now. He points out that among all of the scenarios, having higher education determine wealth is probably the best.

It certainly seems to have worked out for Trujillo, who seems well on her way to leverage her education into something powerful for her future. "It’s really hard, but being in D.C.is really great. There are a lot of opportunities."

Note: This story is part of a series on unemployment tied to Labor Day. Read previous stories on long-term unemployment, veteran unemployment, unemployment among older workers and nationwide teacher layoffs.

[Frustrated college student via Shutterstock]