Unprecedented debt and no jobs for the class of 2008

The class of 2008 faces unprecedented levels of debt and is struggling to find jobs as the credit crunch takes hold.

Students who graduated from university this summer have apparently never have had it so bad. Many borrowed tens of thousands of pounds in student loans on the assumption that they would walk into well-paid employment.

But graduate recruitment has been suspended or reduced by some companies as they struggle to stay afloat. Rather than taking their first step on to the career ladder, graduates are instead moving back in with their parents and accruing interest on debts as they look for work.

One graduate from the London School of Economics said: “I thought after I got a masters degree from a world-renowned school that I would have an easier time finding a job. I was wrong.�

The squeeze on the banking sector means that this year's graduates are competing for a dwindling number of traineeships, resulting in a growing demand for polished “soft skills� as well as a sharp brain.

Richard Wainwright, the CBI's head of education and skills policy, said: “Just having a good degree isn't good enough any more. Clearly the job market is going to get more competitive. A lot of firms have put recruitment freezes in place.�

While it might seem intuitive for companies to save money by sacking expensive executives and recruiting young graduates, Mr Wainwright said: “I don't think graduates are a cheap option. Those large firms that develop graduate recruitment schemes spend a lot of money on that.

“Graduates now need those skills that employers value, such as team-working, problem-solving, customer service and a positive attitude. That's an area that a lot of employers think graduates fall down.

“Young people who go into the workplace thinking the world owes them a living aren't going to do well.�

Real World, a graduate recruitment agency, said that those wanting to enter the banking and construction industries had been worst hit.

Darius Norell, its founder, said: “Companies involved in risk markets, such as Lloyd's Register, are expecting to recruit more graduates. And a lot of the large professional services, such as PricewaterhouseCoopers and Ernst