College graduates overestimate their starting salaries by $30,000

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New grads negotiating their first salary could be in for a rude awakening.

Amid a historically strong job market characterized by low unemployment, rising wages and high levels of confidence among job seekers, those with college degrees are relatively content with their earning potential.

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According to a study, today’s students expect to earn about $84,855 a year after graduation Survey of college students by Real Estate Witch, part of real estate site Clever, in March.

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Still, according to Real Estate Witch, the average starting salary for recent graduates is just under $56,000, a difference of almost $30,000.

College graduates need no less than $72,000

Recruitment prospects for the 2023 class

A City College of New York graduate takes a selfie during the graduation ceremony.

Mike Segar | Reuters

On the positive side, employers are planning about 4% more new hires according to a Report of the National Association of Colleges and Employers.

While this is well below previous projections, “the overall picture for the 2023 class is still positive,” said Kevin Grubb, assistant vice provost for professional development and executive director of the Careers Center at Villanova University.

“Many of our students have jobs before they graduate,” Grubb said.

They just don’t necessarily get paid more than last year’s graduating class.

The average starting salary of this year’s graduates is expected to stabilize, according to a separate NACE survey. According to NACE, typically high-paying disciplines such as engineering, mathematics or computer science are paid almost the same or less than last year.

From April companies paid new workers 6.6% less Payroll declines in finance, insurance and other professional services have been more pronounced than new hires over the past year, according to data from payroll service provider Gusto.

But for recent or prospective graduates entering the job market, experience is even more important than a good salary, said Luke Pardue, economist at Gusto.

“If they can acquire the skills, they can later convert them to a better job.”

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