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Imagine graduating from college right now with lots of debt but no real job prospects. That's the terrifying reality for many rising and recent grads facing the worst job market in decades.

As NPR's Yuki Noguchi reports, graduating at a time like this puts many people at a disadvantage for years to come.

YUKI NOGUCHI: Shana Berenzweig gave up a job five years ago to get a master's in public administration at an Ivy League school, thinking that degree would help her advance. Instead, she's been looking for work since she graduated nearly two years ago. And that's not all.

Ms. SHANA BERENZWEIG: I mean, went to NYU on student loans, so I absolutely have debt.

NOGUCHI: When I reached Berenzweig in Austin, she apologizes for tiny yelps in the background. She's babysitting a friend's one-year-old to earn a little cash.

Ms. BERENZWEIG: It's scary. I mean, I'm 33 years old. It's very scary to be in this position.

NOGUCHI: Berenzweig's education puts her in the rarefied elite among job seekers. College graduates fare much better than those without degrees. Still, she worries the degree she paid so dearly for might actually be hurting her, so sometimes she erases it from her resume.

Ms. BERENZWEIG: It's almost like people are just going to assume that because I have a master's degree that I'm asking for more money, or if something better comes along, I'm just going to jump ship.

NOGUCHI: In fact, she says nothing has come along, not even waitressing gigs she's applied for. And Berenzweig's starting to feel a little desperate. When her car got totaled in an accident and she had to get a new one, she tried to turn that into a networking opportunity.

Ms. BERENZWEIG: In talking to the car dealer, he mentioned something about working in public service. And, I mean, I'm sending my email to the car dealer like - I mean, my resume to the car dealer. It's just a very surreal experience just looking for work wherever.

(Soundbite of baby)

NOGUCHI: At a recent job fair at American University, the power dynamic is palpable. The recruiters stand confidentially behind their tables as students line up 10 to 15 deep to meet them.

Ms. BLAIR COWARD: Hi, my name is Blair Coward. I'm a senior in the School of International Service.

NATALIE: Blair, nice to meet you. I'm Natalie. I work at...

NOGUCHI: Blair Coward is a young veteran of the job fair scene.

Ms. COWARD: This is my dress-for-success outfit.

NOGUCHI: On this, her 22nd birthday, she's soberly dressed in a black pants suit and nervously flicks her pen as she jockeys for position.

Ms. COWARD: Oh, I talked to him yesterday. Maybe I should go into another line.

NOGUCHI: The tables for the FBI and the Departments of Defense and Justice are by far the most popular. I overhear one student ticking off a list of federal agency booths she's visited. She loses track and refers to one as the U.S. Department of Whatever, Whatever.

Those tables are busy, as Coward explains, because those jobs are stable. But nearly all the recruiters tell her they have only internships or senior-level jobs. Coward says she's competing against people with far more experience, even for entry-level positions.

NOGUCHI: And so do you have something lined up for after graduation?

Ms. COWARD: No. Unfortunately, no.

NOGUCHI: You look terrified.

Ms. COWARD: Yes, I am. I am quite terrified. I'm really looking for something more permanent because after August, I'm not only unemployed, but I'm also homeless.

NOGUCHI: Coward says many of her classmates are going to graduate school rather than face that prospect. And more education does come with serious benefits. The unemployment rate for college grads is less than half that of high school grads, and some degrees are still very much in demand, such as engineering. Nevertheless, today's economy will force many grads to settle for less.

John Irons is policy director for the Economic Policy Institute.

Ms. JOHN IRONS (Policy director, the Economic Policy Institute): That's what we expect to see with the grads this year, is that they'll have less opportunity. They'll have lower incomes. They'll be taking different kinds of jobs than they would be if they were graduating in the height of a boom.

NOGUCHI: Irons says those who start out at a disadvantage fight to make up lost ground for years, maybe a decade or more. The damage is also psychological: in the same way that people who lived through the Great Depression might hoard food, people affected by the Great Recession are less willing to leave jobs, even if they're underpaid or unhappy.

Max Caldwell is managing principal for Towers Watson, an HR consulting firm.

Mr. MAXWELL CALDWELL (Managing principal, Towers Watson): There's a recession mindset and an imprint, I think, on workers who are struggling to, you know, find jobs and get their footing and find a platform to grow a career inside of an organization. I think the recession, in a way, has been fairly traumatic for people trying to make that happen.

NOGUCHI: Caldwell says that's imparting another lesson for this generation of graduates, that they will have to rely less on their employers and more on themselves to take care of their careers.

Yuki Noguchi, NPR News, Washington.

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