A new report finds that 33% of 2025 college graduates are unemployed and actively seeking work.
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Only 30% of 2025 college graduates and 41% of 2024 graduates found entry-level jobs in their fields, while 48% felt unprepared to apply for such positions, finds a new national report.
Those are two of the main takeaways from the Cengage Group 2025 Graduate Employability Report, which claims that recent graduates are encountering the toughest entry-level labor market in five years. The market problem is compounded by narrowing hiring pathways and gaps in practical skills readiness, according to the report.
Now in its fifth year, the Cengage report is based on an online survey administered by the global edtech company in June and July, 2025 to 865 full-time hiring managers, 698 post-secondary instructors and 971 recent graduates across the U.S., with each group meeting specific eligibility criteria for their group.
A Tight Job Market
Three-quarters (76%) of employers reported that they were hiring the same or fewer entry-level employees, compared to 69% last year. That contraction was blamed on multiple factors: a tightening labor market (51%), the rise of AI (46%) and broader economic pressures (46%).
The hiring profile represented a stark change from 2022, when 65% of employers reported difficulty finding entry-level talent, compared to 2025 when that number had dropped to just one-third (35%).
As hiring dynamics shift, formal degree requirements are resurging again. Seventy-one percent of employers now require a two- or four-year degree for entry-level roles, up from 55% in 2024. The result is fewer opportunities and tougher competition for graduates:
- Just 30% of 2025 graduates (vs. 41% of 2024 graduates) had secured full-time jobs related to their degree;
- 26% of 2025 graduates (vs. 24% of 2024 graduates) were employed in fields unrelated to their degree;
- 33% of 2025 graduates and 20% of 2024 graduates were unemployed and actively seeking work.
“The widening career readiness gap, along with the growing demand for upskilling driven by technological advancements like AI, is creating an urgent need to rethink how we equip learners for future employment,” said Michael Hansen, CEO of Cengage Group, in a press release. “Closing this skills mismatch is essential to narrowing the wealth gap. When people can put their skills to work, they gain not just income, but also purpose, dignity and the stability that comes with building a sustainable career. To achieve this, the entire education ecosystem must work together to ensure the U.S. system keeps pace with an ever-changing world.”
Disconnects Between Educators, Employers and Graduates
The report points to widening gaps between what employers expect, what educators teach, and what graduates believe about their career readiness. While employers ranked job-specific technical abilities as their top priority, educators placed those competencies last, instead prioritizing soft skills like critical thinking and problem-solving.
This disconnect leaves graduates feeling unprepared for the new realities of the labor market. Nearly 9 in 10 (89%) educators believe their students are prepared to enter the workforce, but almost half of graduates (48%) say they feel unprepared to even apply for entry-level jobs in their field. Only 51% say they feel confident in their AI skills when job-hunting.
“Our research shows that while most educators believe their students are prepared to enter the workforce, graduates tell a different story,” said Kimberly Russell, SVP of Research, User Experience and Design at Cengage Group. “These findings underscore the importance of stronger alignment across the workforce development system – without it, labor gaps will persist and so will the cycle of underprepared graduates and unfilled workforce needs.”
While educators recognize that certain specific job skills are important, they appear reluctant to accept the fact that they are responsible for teaching those competencies. For example 79% of educators agree students should have AI experience before graduation, but only 37% believe it’s their job to teach those AI skills in their courses.
Importance of Connections
The findings also show that students believe that professional connections are increasingly important in influencing their employment outcomes. Graduates reported that personal referrals (25%), internships and prior work experience (22%) and interview skills (20%) were more decisive in securing employment than the degree itself (17%).
However, 20% of graduates believe their education program didn’t help them foster those types of professional connections, and over one-third (36%) of recent graduates wished their institution had helped them get a job after graduation, while 35% said they wished their program had worked more closely with employers to build career-relevant courses and skills.
“The workforce development system is at an inflection point and this serves as a powerful opportunity to better align education more closely with workplace needs,” concluded Hansen. “By putting employability at the center of learning, we can ensure graduates are prepared not only for their first job but for long-term career success. Employers, in turn, gain a stronger pipeline of talent that fuels innovation and supports broader economic growth.”