Updated on 09.12.14

Student Loan Debt and No Job? What Now?

Trent Hamm

I get some variation on the above email all the time. In fact, I could probably include some variation on this question in every single reader mailbag (yes, I filter the questions a bit as to not get too repetitive).

The story is usually the same. A person went to college, often majoring in a field that doesn’t have enormous job possibilities after earning one’s first degree. Usually, they racked up a significant amount of student loan debt. They finished and left college in 2009 or 2010. They discovered that the job market was atrocious. They’re jobless, out of college, and trying to figure out what comes next.

My advice to people in this situation varies a bit depending on their specifics, but I usually end up offering a very similar set of suggestions to each of them.

First, if you don’t have a job, get one, even if it’s beneath you. Check the ego at the door. Here in the post-college real world, we don’t spend seven years holding out for management positions. Yes, this means that you and your college degree might be working at Burger King or at the gas station. That’s fine. Just turn your thinking off when you get to work and save your mental energy for later. For a lot of employers, a willingness to work anywhere shows that you have some initiative, which is always a net positive.

Second, if you can’t find employment, make sure your student loans are being deferred. Most student loan programs will defer your payments if you’re under economic hardship, which you are if you’re fresh out of college and jobless. Take advantage of this option.

Third, if you’re living on your own, move back in with Mom and Dad if at all possible. This purely minimizes expenses; it keeps you from going into further debt just to keep the lights on while you struggle to find work. Don’t go it alone. If you can’t move back in with your parents, find someone you can cohabitate with. The key is to get your living expenses as low as possible until you’re on your feet. If you don’t want to move back in, try to see if you can get back on their health insurance — the Affordable Care Act now allows children to be on their parents’ insurance until they’re 26.

Fourth, engage with the professional community in your area or online. Look for someone – anyone – who is involved with your field near where you live. Reach out to them. Get involved with any organizations that might have anything to do with your career path. Participate on Twitter and LinkedIn with regards to discussions about your chosen profession. The more you get your name out there in regards to your field, the more likely it is you’ll make that connection that you need to find a job.

Fifth, live as lean as you can. If you go out, go out to free activities. Hang out at other people’s houses, doing things that don’t require much additional cost. However, don’t spend your time goofing off…

Sixth, spend your spare time working on professionally-related projects. Whatever it is that you’re doing, there’s likely some way you can be honing your skills in your spare time. Build an interesting web app. Write some short stories. Do some volunteer work. Find things you can do even without employment to bolster your resume and your skill set.

Seven, spend additional spare time working on transferable skills. Get involved with public speaking opportunities. Take on seemingly menial tasks for civic organizations that help you build skills you can always use, like filing paperwork or managing a calendar or managing a website. If you find any sort of leadership position, jump on board. Again, even if these aren’t skills that you’ll directly use in your career path, they’re still noteworthy and bolster your resume and skill set.

Eight, look seriously into continuing your education. In some careers, there’s a benefit to earning a masters. In others, it mostly just boils down to prolonging the college years. If there is real benefit in continuing your education, you’re probably in the best possible position to do just that.

Nine, don’t just rely on headhunting sites for job searches. So many people come to me saying that they searched for jobs on a few headhunting sites (like Monster) and gave up when nothing just fell into their lap. A good job search involves such sites as only one small component of a much bigger picture. Tap every social network you’re involved in to see if you can find any leads. Directly ask people you know in that professional community if they know of any entry-level positions.

Finally, keep your nose clean. Don’t spend your time doing anything that will cause you to lose the eventual opportunity when it comes along. Don’t waste your time using substances that will make you have a poor first impression on potential employers. Don’t engage in behaviors that will even have a slight chance of causing you to have a criminal record. It’s not worth the risk. It’s pretty easy to just not hire someone because they have a criminal record or because they smell like some drug or they come off as being drunk or stoned. That’s not a sign of a reliable potential employee.

These steps will make the path from where you’re at now to a healthy career and financial future as smooth as possible. Good luck.

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  1. Maureen says:

    Thank you, thank you, thank you!!! Your first piece of advice: “if you don’t have a job, get one, even if it’s beneath you.” I know a few parents who’s kids are living with them and not working because all the jobs that are out there are “beneath them.” Get real. Stop sucking people dry with that attitude which will get you no where, especially to the job you studied and dreamed for.

    Just a thought: write a whole post about “jobs that are beneath people” but are necessary to make the world go around and help you grown into getting a better job. That might open a lot of eyes.

  2. Elizabeth says:

    Solid advice there, Trent :)

    One comment on the first point: why does everyone think it’s so easy? I would have taken just about any job when I graduated, but many employers wouldn’t hire me because I was overqualified. Employers told me they knew I was going to leave as soon as a job in my field showed up and they wanted high school and college students who would stick around for a few years. It was frustrating!

    Luckily I wasn’t out of work very long, but I’m sure some people thought I was being fussy. It was the employers who were being fussy!

  3. How about volunteering or doing service work such as Americorps of the Peace Corps? What is your opinion on options such as these?

  4. Kate says:

    I have a huge amount of sympathy for anybody who graduated into the recession. I graduated two years before it started, with a ton of work experience for someone my age and great references, and it was still a really tough go to get a job. I continue to shake my head in amazement at how much rougher it would have been had I been trying to do the same thing just a few years later.

  5. Daria says:

    I agree with your advice but I have sympathy for those who are looking. My daughter graduated last July and the only job she could get was a part-time job at Barnes & Noble.She felt very lucky to have it. It took her a year to get a full time job with the American Cancer Society. It’s not her dream job but she likes it, they like her, and they have great benefits. It seemed like it was going to take forever for her to find a full time job. My oldest son was in college during the 2000 recession. The only summer job he could find was as a driver with Jason’s deli because employers did not want to hire college students who were going to leave at the end of the summer. He banked the paycheck and lived off the tips. It was better than nothing. A lot of 50+ men I know who lost their jobs are taking jobs out of town and commuting. It’s not a dream situation, they miss their families but they are paying the bills, keeping the kids in the same schools and not having to walk away from homes they can’t sell. On the other hand, I work as a crossing guard and we can’t fill all of the open positions. Parents want the guards but no one wants to work the shifts. It’s easy work and pays $10.50 per hour. I think it’s a great job, but it does break up my afternoons. I have parents who have told me that their children don’t want to wait around for an hour after school. I made my kids sit under a tree and read when the weather was nice or when it wasn’t they sat in the van watching dvds.

  6. valleycat1 says:

    #5 Daria has a point – check out part time or sub positions with the local school districts & county office of ed. In our state, education jobs are unionized, so even sub jobs for nonteaching staff pay well. My child volunteered for an organization in the professional field she was interested in (after graduating college & while working on her master’s) and ended up getting a great job with that organization after they restructured. In her extended job search in a tough job market, she was competing with experienced older people who had been laid off & she now realizes the struggle affects all sides. Younger people have fresh skills & enthusiasm, older people have experience and a real need to bring in money to support a family, and employers are having to make the call as to what will serve their company the best.

  7. Rap says:

    Good advice. I took a job that I origanally thought was beneath me but 12 years later I greatly enjoy. I took the job because I couldn’t afford to take the job I thought I wanted….. And I found something I geniunely enjoy.

    Sure it’s not the job my degree says I should have…. but really, sometimes people let their preconcieved notions of jobs stop them.

  8. Ann says:

    A popular option no one has brought up is going abroad to teach English.

    Japan is a tough market to get into, but in Korea it’s pretty easy and all you need is a college degree and an attractive photo to send to potential employees. You don’t need any experience and most teaching gigs, you only teach 22 hours a week and sit at your desk the rest of the time. You get health benefits and they put you up in your own apartment, which is free, but you pay utilities. You can live really cheaply and save money to pay off your debts or save for a down payment on a house or something. I did this for two years. I owed $30,000 in student loans and a little credit card debt and I paid it all off, plus traveled all over the country and a little bit of Asia.

  9. Jill says:

    @ #8 Ann:

    I graduated from my undergrad in 2006, and did exactly that – went and taught English overseas. I worked in Honduras, Japan and Vietnam, before returning to Canada in 2009. Great experience, best decision I ever made and wouldn’t trade any minute of those three years for anything.

    BUT, and it’s a big but, when I came back to Canada in 2009, I didn’t have any ‘practical’ work experience. I knew I could walk into any entry level position and do extremely well, but no one would even look at my resume. It was the most frustrating time in my life. Having had three years work experience overseas didn’t mean anything.

    I ended up going back to school, and did a 1 year post-grad college diploma that included a co-op work term solely to get practical experience for my industry on my resume. Now I have the best of both worlds – a great job as a result of my co-op work term, and my teaching experience which has given me a unique perspective on working with different kinds of people.

    So yes – teaching abroad is great, and you can save some money while traveling, learn about yourself and get to experience a different culture. But, it doesn’t let you bypass the hurdle of actually getting into your desired industry.

  10. deRuiter says:

    Lots of good comments here. One thought might be that piling up multi thousands of dollars in debt for a degree for which there is little call and low pay might not be such a good idea. Getting a good job with no experience isn’t easy now and is not likely to get easier for the next five or so years.

  11. Tabi says:

    This is a pretty timely article; I’m graduating next year and spending some time thinking about my options for when I leave university. I’m making some plans, thinking about supplementary courses I can do (going to take Level One Sign Language for instance) and some volunteering work in my area. Most likely I’ll be living with my parents. I will use this as a contingency plan in case I get a job, but somehow a job seems unlikely. :)
    Disagree somewhat with deRuiter; humanities degrees and whatnot are still important. Over here the tuition fees are rising by 200%, meaning that poorer kids will choose higher impact degrees and humanities will languish horribly. But it’s what you do in your spare time that matters; I know my Philosophy/Linguistics degree isn’t going to make me a lot of money by itself so I do plenty of character building stuff as well. It’s about augmentation I guess. Can’t recommend that highly enough to a lot of my classmates…

  12. Bookaunt says:

    Those still in school and planning to graduate in 2011 or 2012 (and maybe even 2013) need to seriously evaluate and weigh their major, job prospects, and student debt load. You want to have marketable skills and relevant experience while taking on as little debt as possible to acquire them. Actually those are worthy goals for all students but are particularly important for those entering a down economy.

  13. kristine says:

    This is mpre for parents, on how to avoid this whole scenario.

    We took a huge gamble, and instead of setting aside much money for our kids’ college education- only 8K each (they were both lucky and born super bright), we moved to rent in a top tier school district on Long Island. The kids are thriving. They work late every night, and independently search out programs and study-related work over the summer. My daughter’s first college response just came yesterday- full tuition scholarship, plus free room and board, plus automatic graduate school acceptance should she stay there through grad school as well. I will encourage her to take the tier-2 full scholarship choices over the Ivies, and go for free. But I have to say- it starts young. We had no TV till our kids were 10, no video games (except Sid Meier’s Civilization), so learning was always the most exciting option in our house. Kids are hungry to learn, and not giving kids empty time-fillers is the most important thing you can ever do. Not a single toy that flashes or beeps, mostly art supplies and books, and learning kits. Oh, but yes, the leapfrog learning globe is excellent! (But I digress). Proud mama today.

  14. ChrisD says:

    I’m slightly confused by the idea of a degree that doesn’t lead to any jobs. I did sciences where the link is obvious, but surely most office jobs don’t require any direct skills taught in university. A friend studied history and did a law conversion course but studying law would only have saved one year of training, not a big difference out of a few years training. Or another friend who did physics and became an accountant, she still had to do loads of on the job training and exams. Likewise in my previous job one of the senior managers had a degree in philosophy.
    Isn’t going to university about training as a human being, learning study and work skills and proving you can work hard? (and all the extracurricular stuff). I admit my argument falls down a bit if you consider the huge amounts of money involved (I went when it was still free), but a degree is supposed to be an education that will stand you in good stead in life. What are you learning that jobs don’t like?

    On a related note, how do university prices in Europe compare to the states? I know non Europeans have to pay more than Europeans, but I would have though it would be pretty cost effective to come over here, and more and more degrees are being taught in English.

  15. Mule Skinner says:

    Don’t get pregnant.

  16. Daria says:

    Chris D,

    I can only talk about Bangor,Wales where my daughter went to school. She paid a non european rate which came to approx. $16K per year where the dollar has been low compared to the pound. This did not include her room and board. Wales was cheaper than England esp. London. When we first considered allowing her to go to school overseas, it would have been the same as going to UT and living on campus. But because the dollar dropped, she paid the same as if she had gone to a private college in TX. However, she was a good student and the University gave her a 50% discount on tuition for her 3 and 4th years. To keep her costs down, she roomed in a house with 5 other students, her health care was free because she was there longer than 6 months each year, and she rarely ate out (this also had to do with food allergies). She got a job on campus as a DJ for the on campus nightclub. For travel, she did couch surfing or youth hostels. However, we had unexpected costs when I had to fly over when she needed emergency surgery (Thank you to G. Bush for the $1200 tax rebate that year). The fees and physicals for granting a visa all add up. Hope this answers part of your question.

  17. jim says:

    The real world doesn’t work like that and hasn’t for some time. There just aren’t enough jobs out there. If theres more jobs in accounting than graduates in accouting then you aren’t going to see many psychology or communications majors getting accounting jobs. And I think that people getting good jobs outside their major field is the exception rather than the rule. Physics is a tough major that is transferable to many things. Psychology, music, communications, art history, etc are however not too sought after.

  18. jim says:

    ChrisD, are you from USA?

  19. jim says:

    “If theres more jobs in accounting than graduates in accouting ”

    I meant that to be the other way around. More grads than jobs.

  20. Evan says:

    “if you don’t have a job, get one, even if it’s beneath you.” THIS.
    I finished school having no idea what I wanted to do as a career and constantly told myself that I had a career crisis not an income crisis. I deferred my loans for years figuring at some point I’d get the perfect job and things would take care of themselves.
    They didn’t. I got one job, then a better job, then a better job, and THEN I got a job that was somewhat career oriented. It will NEVER be easier to take care of than right now. No house, no wife, no kids – just work doing ANYTHING and get it done. The rest of the advice here is great, but #1 is by far the most important.

  21. Evan says:

    I graduated university 7 years ago with a BA in humanities. Got a job 3 years ago through a friend doing software development. I had ZERO experience in this field. I started off copying-pasting and data-entry and the deal was if I could learn fast enough that they didn’t run out of things for me to do, I could keep the job. Worked out great for everyone, so yes, I agree that in some fields university is about developing as a person. Networking will always win out over credentials in terms of getting a good job.

  22. Amanda says:

    Q3: Appropriate response would have been go see a CPA, not sink money in a random business.

    Q4: It’s highly unlikely the dress could be sold for much, if anything. (Spoken from experience!)

  23. Nancy says:

    This was an excellent post, and a lot of good comments. I just want to add that the classic job-search book “What Color is Your Parachute?” has excellent job search advice.

  24. ChrisD says:

    @ Daria
    Thanks, right currency fluctuations are a big point to bear in mind.

    The real world doesn’t work like that and hasn’t for some time. There just aren’t enough jobs out there. If theres more jobs in accounting than graduates in accouting then you aren’t going to see many psychology or communications majors getting accounting jobs.

    I think I’m stuck in the past a bit on my idea of degrees. For example a degree in accounting. This is not an academic subject. Why would you do a degree in this (does it exist) I thought accountants where all trained on the job (i.e. sponsored through a company). It is the difference between a professional qualification and an academic study. One is for the professions, the other is for universities.
    Re ‘not enough jobs’. That means the problem is not ‘wrong kind of degree’, but the economy. I’m reading loads of books like ‘No Logo’ and ‘the Gods who failed’ I can only partially understand the set up, but my understanding is the current rotten economy is not an inevitable result of globalisation, but due to rotten, badly thought out policies, i.e. due to bad choices (of the government, not individuals).

    Very complicated subject though.

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