Job outlook for 2026 college graduates to hit 5-year low as employers turn to AI and foreign workforce
The outlook for the college graduating class of 2026 has darkened sharply as data shows employers’ hiring plans have stalled, job market grades have fallen and job market competition has intensified due to automation and visa-based work programs.
According to a report speak Wall Street JournalBased on data from the National Association of Colleges and Employers (NACE), employers predict the job market for 2026 graduates will be the weakest in half a decade.
A survey of 183 companies conducted between August 7 and September 22 found that 51% of respondents rated the job market for new graduates as “poor” or “fair”, a sentiment not seen at this level since the COVID-19 economic downturn in 2020-21. Only two percent of employers rated the market as “excellent.”
The slowdown in hiring follows a wave of large-scale layoffs by major employers, including Amazon, UPS and Verizon – with the latter apparently preparing to cut 15,000 jobs, the largest workforce reduction ever.
While overall hiring of 2026 graduates is technically expected to increase by 1.6 percent, that represents a sharp decline from prior projections for the class of 2025. Historical trends show that spring hiring often falls short of fall estimates. This divergence is reflected in NACE’s year-over-year hiring projections: from a nearly 30% increase in spring 2022 plans compared to 2021, projections have since fallen, including a contraction for the 2024 class.
According to data from job platform Handshake, full-time job postings in August fell more than 16% year-on-year, while applications per job increased 26%. More than 60% of graduates surveyed in 2026 said they were pessimistic about their career prospects. Former recruiter Giavanna Vega, who was laid off from Automation Anywhere in 2023, said companies “don’t know where to invest” amid AI uncertainty and pricing. “They don’t have the training,” she noted of recent graduates, many of whom are being passed over for positions increasingly filled by professionals who are laid off mid-career.
The unemployment rate for young graduates reached 4.8 percent in June, the highest rate in four years and above the national average. New college graduates now compete not only with each other, but also with recently laid-off workers and foreign graduates entering the U.S. job market through visa programs.
Increasing scrutiny of visa programs such as H-1B and OPT (optional practical training) has activated hundreds of thousands of foreign graduates to fill jobs in the United States originally intended for American students. The Department of Justice (DOJ), led by Deputy Attorney General Harmeet Dhillon, has promised increased enforcement of longstanding visa laws to curb what officials describe as the systemic replacement of domestic talent.
Eric Sell, senior attorney in the DOJ’s Civil Rights Division, stressed that the administration is committed to holding companies accountable for how they treat American workers, especially during periods of economic upheaval and rapid technological change. He stressed that under President Donald Trump’s leadership, technological advancements “will never be used as an excuse to forget the workers who built this country,” and he warned that those who try to exploit chaotic growth for corporate benefit “will be held accountable.”
Public frustration grew. A new Cygnal survey find that 44 percent of likely voters say businesses exploit the H-1B system. Among influential voters, 43 percent agree with this assessment. In particular, the backlash against these visa programs is strongest among working-class Americans and voters without college degrees, key voting districts ahead of the 2026 midterm elections.
In 2024 alone, the Biden administration approved work permits for approximately 400,000 foreign college graduates under the Optional Practical Training (OPT) program, a 45% increase from 2020 levels under President Trump. Former Director of U.S. Citizenship and Immigration Services Joe Edlow and other Trump administration officials have warned that programs like OPT depress wages and displace American graduates, particularly in high-demand STEM and business fields.
The transition from foreign student to American worker also begins at the admissions level. Rich Kaye, Breitbart News opinion contributor interviewed why taxpayer-funded public universities are filling more and more seats with international students who later convert F-1 student visas to work permits. “When a public university replaces a Georgia student with an F-1 student in a high-demand field,” Kaye wrote, “it increases pressure on H-1B allocations tomorrow in exactly the sectors where Americans could be trained to fill positions.”
This pressure is already being exerted felt by recent graduates like Nalin Haley, who said Remove the cooker that many members of his peer group struggle to get started. “It’s been a year and a half and none of them have a job, not one,” he said. “I’m angry about this, because I have to try to help my friends get jobs while their parents got jobs right away – not just after they graduated from college, but right out of high school.”
