Transcription
Northland College was founded in 1892. It survived two world wars, the Great Depression, the 2008 financial crash, and a global pandemic. 133 years of continuous operation.
In 2025, it held its final commencement ceremony and closed its doors permanently. It was not the only one. 16 American colleges closed in 2025. More are closing in 2026. The Federal Reserve is projecting up to 80 more by 2029.
And this week, Microsoft laid off 4,800 American workers while simultaneously being approved for 2,273 H1B visas. Xbox specifically cut 1,600 American employees. The fury on X was immediate. Fire Americans, hire foreigners over and over. The same story told in different companies in different years, always ending the same way.
Put those two things next to each other. Universities closing because there are not enough students willing to pay for the degree anymore. Companies cutting the people who have the degree while importing cheaper replacements from elsewhere. And somewhere in the middle of all this is a generation of young people who did exactly what they were told. Got the grades, applied, took the loan, did the four years or the six years and came out the other side into a world that had quietly changed the rules while they were sitting in lecture halls.
I know two people who left school at the same time. One went to university, 3 years, then a masters, 5 years total, graduated last year with serious debt and has been applying for jobs since, still looking. The other one went straight into work at 18. Started at the bottom of a tech company doing basic IT support. Learned on the job, picked up certifications along the way, not degrees, certifications, specific skills that specific employers needed. By the time his friend finished the masters, he had 5 years of documented experience, a track record, references from actual employers, and a salary. He gets calls from recruiters. Now, his friend does not. That is not a coincidence. That is the market telling you something.
Experience is overtaking qualification in nearly every sector. Not everywhere, not for everything. But in tech, in finance, in sales, in operations, [music] the person who has been doing the thing for 3 years beats the person who has the piece of paper, saying they studied the thing in almost every hiring conversation. And this is the video about why that is happening, how bad it actually is, and where it all goes from here.
The numbers first because they are genuinely shocking when you put them together. 42% of recent university graduates in America are underemployed, working in jobs that do not require a degree, not temporarily between better opportunities. That is the persistent rate 15 months out of university. Nearly half of everyone who just finished a degree is working a job their degree was not necessary for. The unemployment rate for recent graduates aged 22 to 27 is now higher than the national unemployment rate. That has happened for five consecutive years. Between 1990 and 2018, it had almost never happened. The degree used to protect you from unemployment more than almost anything else. That protection is gone.
140 applications per vacancy for graduate roles. That is the average. 140 people applying for one job. Employers looking at each application for an average of 7 seconds before deciding. [music] 7 seconds for four to six years of your life and tens of thousands in debt. One in eight hiring managers in America actively stated in 2025 they plan to avoid hiring recent graduates altogether. Not hire fewer, avoid entirely. Only 19% of recent graduates say it is a good time to find a quality job. In 2022, that number was over 70%. 3 years. More than 50 percentage points collapsed. And the one that really lands. Computer science graduates now have the same unemployment rate as fine arts graduates. The degree that was supposed to be the most employable technical qualification you could get. The one every careers adviser pointed out as the safe bet performing identically to the qualification everyone used as the punchline for unemployability. If you are a computer science graduate watching this, I am sorry. That is a brutal data point and you did not deserve it. But it is real and you should know it.
Now, why? Because the why is the part that almost nobody is explaining honestly. In 2000, 25.6% of American adults had a university degree. By 2024, that number was 38.7%, a 50% increase in degree holders in 24 years. Think about what that actually means. The credential that was designed to signal you were in the top quarter of the workforce is now held by nearly 40% of the workforce. It cannot signal the same thing anymore. The signal has been drowned by the volume. This is basic economics. When you mass produce something, its value falls. When you produce a limited edition of something, its value stays high or increases.
Universities spent 30 years expanding, opening new campuses, lowering entry requirements, creating new courses, taking on more students. All of it generating tuition revenue. And in doing so, they diluted the product they were selling to the point where it stopped delivering what it promised. The loan system made this possible. The availability of student loans removed the price signal that would have naturally limited demand. When you can borrow £50,000 at 18 without fully understanding what that means. At 28, the decision to spend 3 to 6 years in higher education feels different than it would if you had to pay it up front. The loan system created artificial demand for a product whose supply was simultaneously being massively expanded. The result was always going to be a glut of graduates chasing a labor market that had not grown at the same rate.
Here is the thing. Nobody in the university admissions office was telling the 18-year-olds signing those loan forms. The labor market does not care how many people have degrees. It cares how many people can do specific jobs. And the specific jobs that actually needed degrees, the ones where the knowledge you gained in three to six years was genuinely necessary to do the work were never numerous enough to absorb a workforce where 40% of people had the credential.
Now, the universities themselves because the collapse of the degrees value and the collapse of the institutions that sell it are happening simultaneously and that is not a coincidence. The 2026 enrollment cliff is happening right now. A 17% decline in birth rates after 2007 means there are 576,000 fewer college-aged Americans between 2025 and 2029 than there were between 2021 and 2025. The babies that were not born after the financial crisis are now the teenagers not enrolling in university. Universities had 18 years to see this coming. Most of them spent those 18 years expanding rather than preparing. The number of American 18-year-olds is projected to fall by 13% between 2026 and 2041. The share of high school graduates enrolling in college right away, has already shrunk from 70% to 62% over the last decade. Adult learner enrollment, people aged 25 and older, has fallen by nearly half since 2008.
Three credit rating agencies issued unfavorable outlooks for the higher education sector in 2025. The Federal Reserve has found around 60 colleges closing every year, a rate that has ramped up significantly over the past decade. [music] In a worst case scenario where enrollment drops 15% between 2025 and 2029, [music] the Fed projected annual closures would more than double.
Limestone University in South Carolina [music] closed after spring 2025, $30 million in debt. Enrollment had dropped from over 3,000 students a decade ago to just over 1,600. Failed to meet a $6 million emergency fundraising goal. St. Andrews University in North Carolina ceased operations in May 2025 after failing to resolve long-standing financial deficits. Fewer than 1,000 students, a modest endowment, could not survive. Sienna Heights University in Michigan, founded in 1919, closing after the 2025 to 2026 academic year. Enrollment [music] down nearly a third in the past decade. The board of trustees deemed the long-term outlook unsustainable.
These are not failing institutions in any obvious sense. They are century old colleges that ran out of students. And when a small tuition dependent college runs out of students, it runs out of money almost immediately because 86% of its income was tuition revenue. There is no buffer, no endowment to draw down. When the students stop coming, the college stops. The elite institutions are fine. Harvard [music] is fine. Oxford is fine. The IVS, the Russell Group, the large state flagships, they have endowments and reputations and demand that will outlast the demographic cliff. But there are approximately 4,000 colleges in the United States. Most of them are not Harvard. Most of them are small regional tuition dependent institutions that nobody outside their immediate area has heard of. And most of them are facing the same arithmetic. Fewer students, higher costs, no endowment to bridge the gap. The sector is contracting. The question is not whether it will contract. The question is how fast and who gets caught in it.
Now, back to Microsoft because this is the part of the story that is breaking right now and that connects the university collapse to the broader picture of what is happening to the people the university was supposed to be producing graduates for. Xbox laid off 1,600 American workers this week. Microsoft cut 4,800 jobs total. Simultaneously, the company was approved for 2,273 H1B visas. Microsoft remains one of the largest H1B sponsors in the United States, filing thousands of labor condition applications every year. Operations roles tied to AI infrastructure and data center expansion grew by 3,000 employees in fiscal 2025, while domestic research development, sales, marketing, and administration, each contracted by around 1,000.
The H1B visa program was designed for specialized skills genuinely unavailable domestically. In practice, it has become a mechanism for importing workers, often from India, at salaries lower than equivalent American workers would command. The top H1B employers are overwhelmingly tech companies. Amazon, Google, Microsoft, Meta, Apple, companies posting record profits while simultaneously laying off domestic staff and filing thousands of visa applications. Trump tried to limit the program by imposing a $100,000 fee per H1B application. A federal judge struck it down as unconstitutional.
So the picture is this. The graduate comes out of university with debt and a credential. The credential is worth less than it was because everyone has one. The jobs that used to absorb graduates are either being done by AI, outsourced to cheaper workers abroad through H1B visas, or simply not being created at entry level. Because companies have discovered through remote work that supervising and training new graduates costs more than hiring experienced mid-career candidates. The graduate applies for 140 roles and hears back from three. Meanwhile, the person who went straight into work at 18 has been building experience and a track record and a salary for 6 years. In most of the sectors the graduate is trying to enter, that person is the stronger candidate.
This is not a story about individual failure. This is a story about a system that sold a product, changed the value of that product without telling the buyers, and is now watching the buyers figure out what happened. The overqualification trap is the specific phenomenon that does not get discussed enough. There are genuinely people with M.S. degrees who are terrible at actual work. Not because they are stupid, they had to be smart enough to get the masters, but because five or six years of academic assessment trains you to do one thing extremely well, produce work that satisfies academic assessors, and that skill does not necessarily translate into being good at the thing the job actually requires. The person who went straight into work at 18 learned how to function in a real working environment, how to manage relationships with colleagues and clients, how to handle pressure and deadlines and the specific messiness of actual work as opposed to the controlled environment of an assessed assignment, how to be wrong in front of people and recover from it, [music] how to get things done rather than how to write about getting things done.
A May 2026 London School of Economics study found that remote work is a better predictor than AI of the decline in entry-level hiring because remote work raises the cost of supervising and training new workers. When everyone is in the office, the new person absorbs enormous amounts of tacit knowledge just from being physically present. They hear how experienced colleagues handle difficult calls. They see how decisions get made. [music] They pick up the culture of the place. Remote work removes all of that. And companies have discovered that hiring someone with 3 years of experience who already knows how to function in a professional environment is much cheaper than hiring a graduate [music] and building that knowledge from scratch via Zoom. The graduate who cannot get the first job because there are 109 applications per internship posting, nearly double from the year before, and who cannot get the internship because companies are not running intern programs at the same scale as before, is stuck. No experience means no job. No job means no experience. The credential that was supposed to break that cycle has stopped breaking it.
Now, the historical parallel because this specific pattern, a monopoly on knowledge and legitimacy being broken by new technology has happened before. In 1440, Johannes Gutenberg invented the printing press. Before it, the church and the universities it controlled were the sole gatekeepers of knowledge. You needed institutional approval to be educated, to have intellectual standing, [snorts] to be recognized as someone whose thinking mattered. The church determined what was true, what could be known, and who was authorized to know it. The university existed within that framework. It was the credentialing arm of an institution that held a monopoly on learning. Within decades of Gutenberg, that monopoly was broken. Knowledge became reproducible. Ideas could spread without institutional approval. People could educate themselves from texts that had previously been restricted to the very few. Martin Luther nailed his thesis to the church door in 1517, 77 years after the printing press, and the specific authority the church had held over learning, over truth, over what people were allowed to know, collapsed within a generation.
The internet did to the university what the printing press did to the church. The specific monopoly on knowledge transfer that universities have held for five centuries. I have the information you need. You come to me. You pay me. I credential you is broken. The information is free. YouTube tutorials, online courses, AI tools that can explain any concept at any depth on demand. Communities of practitioners sharing knowledge outside institutional structures. All of it exists and all of it is available to anyone with an internet connection. AI is making this more extreme by the month. The specific tasks that university training was supposed to prepare you to do, research, analysis, writing, synthesis, coding, are being augmented or replaced by tools that an 18-year-old can access for free and learn to use in weeks. The question is no longer whether you have the credential that says you can do these things. It is whether you can actually do them better than the AI and whether you can direct the AI to do them better than someone else can. University that charges £50,000 for a three-year course in content that is available for free and tools that are accessible to anyone is not selling knowledge anymore. It is selling a credential. And the credential is losing its value faster than the tuition fees are falling. [music]
Now, the trades because this is where the market is already moving and has been for several years. Vocational enrollment increased by 11.7% in spring 2025. Bachelor's program enrollment grew by 2.1% in the same period. The market is speaking clearly. Young people are choosing faster, cheaper, more directly employable routes to the workforce and the data shows they are right to do so. The electricians, plumbers, carpenters, builders, and engineers of Britain are aging out of the workforce. The average age of a tradesperson in the UK is now in the mid-40s. There is no adequate pipeline of replacements. The people who would previously have entered trades as teenagers went to university instead because they were told it was the better path. Some of them came out the other side and found the labor market had no more need for them than it had for the tradesperson they were told not to [music] become. And the tradesperson they did not become is now 50 years old with a waiting list of clients and a rate they set themselves.
The specific skills that cannot be replaced by an H-1B visa or automated by AI are not the skills universities produce. They are the skills that require physical presence, contextual judgment, and the specific knowledge that comes from doing a thing repeatedly in a real environment over time. The electrician rewiring your house, the plumber diagnosing the specific problem with your specific boiler in your specific property, the skilled engineer maintaining the specific machine in the specific factory. These cannot be done remotely. They cannot be done by an algorithm and they cannot be done by someone who has never done them before, regardless of what credentials they hold. The person I know who went straight into work at 18 is not exceptional. He is what the market is starting to reward. Specific capability demonstrated over time in real working conditions. The master's graduate still job searching is not a failure. He is the product of a system that oversold its product to people who trusted it.
Where does this end? The university system does not disappear, but it contracts significantly and it bifurcates completely. The top institutions are the genuinely elite universities with global reputations and endowments that make them financially independent of enrollment numbers survive and probably thrive. Demand for a place at Oxford or Harvard or MIT does not fall when the graduate labor market gets harder. If anything, it intensifies because parents and students correctly identify that the credential from a genuinely elite institution still opens specific doors. Everything below that tier is a different story. The 4,000 American colleges that are not Harvard are facing a demographic cliff, a value proposition that has been damaged by the mass production of degrees, and a student population that is increasingly aware that the investment may not [music] deliver the return it was sold as delivering. The closures that happened in 2025 are the beginning, not the end. The ones projected by 2029 are probably an underestimate.
What replaces it is already visible. Vocational training, industry certifications, online credentials from platforms that have the technology to deliver genuinely high-quality learning at a fraction of the cost of a traditional degree. Apprenticeships that pay you while you learn rather than charging you while you learn. Self-directed learning from the enormous volume of free and low-cost educational content that now exists and the specific personal quality that the person who went straight to work at 18 has at the 5-year masters graduate does not. The willingness to start before you are fully credentialed. To learn by doing rather than to learn by studying about doing to get the experience that the employer actually values rather than the qualification that the employer is increasingly deprioritizing. The world has changed externally completely. The university system was designed for a world where information was scarce, credentials were rare, and the labor market rewarded institutional endorsement. None of those things are true anymore. The system has not caught up with the world it exists in and the young people paying its fees are the ones absorbing the cost of that gap.
I have said this to my viewers before and I will say it again here directly. Nobody is coming to save you. Not the university. Not the employer who promised the degree would open doors. Not the government that designed the loan system. Not the company that filed for H1B visas the same week it laid off your classmates. The old system is broken. Accept it. Not as a reason to give up, as a reason to build differently. Learn AI now, not as something to think about in the future. Now, the gap between people who can use these tools effectively and people who cannot is widening by the month. And it is still closable if you start today. Learn a specific skill that the market needs and that cannot be easily replaced. The trades, the technical certifications, the specific capabilities that companies will pay for regardless of what credential comes with them. Start before you are ready. The person who started at 18 and built 5 years of experience while you were in a lecture hall is not smarter than you. They just started earlier. The second best time to start is now. Build your own income wherever possible. The employer who can replace you with a cheaper H1B worker will replace you with a cheaper H1B worker. The income that you generate directly from your own capability and your own clients cannot be outsourced. The university system is collapsing. The degree is worth less than it was. The labor market has been restructured around you. None of this is your fault. All of it is your problem to solve. Because the generation that figures this out fastest is the generation that comes out of this period. In the strongest position, the 18-year-old who does not take the loan and spends 3 to 6 years acquiring real experience in a real working environment is not falling behind. They are getting ahead. The market is already telling you this. 11.7% vocational enrollment growth versus 2.1% for bachelor's programs. That is not a blip. That is a generation reading the situation correctly and acting on what they see. The universities are closing. The companies are replacing their own workers with cheaper imports. The degree has been mass-produced into irrelevance. And the people who are doing fine are the people who looked at all of that clearly and built something that did not depend on the broken system to work. That is what this video is about. Not doom, a direction. The system changed. Now you change with it. Nobody is coming to save you. But you do not need saving if you understand what is actually happening. Now you do.
Let me go deeper into the Microsoft situation because it deserves more than a paragraph. What happened with Xbox this week is not an isolated incident. It is the most visible recent example of a pattern that has been running for years and that directly explains why the graduate labor market is where it is. The H1B visa program was created in 1990. The premise was reasonable. Some specialized technical roles require skills that simply do not exist in sufficient numbers domestically. When that is genuinely the case, allowing companies to bring in workers from abroad makes sense. You cannot build an industry around skills that do not yet exist domestically. What has happened in the three decades since is different. The program has been expanded and exploited to the point where it functions as a mechanism for importing cheaper workers into roles that American and British graduates are fully qualified to do. The wages for H1B workers in tech are typically significantly lower than equivalent domestic workers would command. Not because the H1B workers are less capable, but because the visa creates a power imbalance. The H1B workers immigration status is tied to their employer. They cannot easily leave for a competitor. They cannot negotiate as freely as a domestic worker. They are structurally a more compliant and more affordable workforce.
Microsoft is one of the largest H1B sponsors in the United States. So are Amazon, Google, Meta, and Apple. The five most profitable technology companies in human history are simultaneously among the most aggressive users of a program that allows them to pay below market wages for technical roles that their domestic graduates are being trained to fill at significant personal expense. The computer science graduate who borrowed £50,000 to get a degree in the skills that Google needs is now competing for the same role with an H1B worker who Google pays less and who has less negotiating power. That is not a fair competition and nobody in the university system that took the £50,000 [music] told the student this was the environment they were being prepared to enter.
In India, the specific ecosystem that produces H1B workers has become highly sophisticated. There are coaching programs, placement agencies, and networks specifically designed to navigate the H1B application process and position candidates for American tech companies. The supply side of H1B workers is organized, efficient, and growing. The domestic graduate who emerged from a university system designed around a labor market that existed 30 years ago is competing against that ecosystem without knowing it. This is not an anti-immigration argument. The H1B workers are not doing anything wrong. They are navigating a system that exists and that companies have chosen to use. The argument is about who designed that system for whose benefit and at whose [music] expense.
The UK version of this story is less visible but equally real. The post-study work visa allows international graduates of UK universities to remain and work for 2 years after finishing their degrees. UK companies can hire from a global pool of candidates at UK graduate salary levels. The domestic graduate who took the same degree at the same university is competing for the same job. The domestic graduate also has student loan repayments that the international graduate does not. The specific arithmetic of hiring a recent graduate has been changed by these structural factors in ways that make the credential worth less as a signal. When the employer can access a global pool of candidates who hold the same credential, the credential stops differentiating. What differentiates is specific demonstrated capability and the specific cost of employment. On both measures, the domestic graduate carrying student debt and expecting a salary that reflects their local cost of living is at a disadvantage.
Now, the Netherlands, because you mentioned it and it is worth including because it shows this is not uniquely a British or American problem. The Netherlands has one of the highest rates of graduate overqualification in the OECD. Nearly 40% of Dutch graduates are working in roles below their qualification level. The Dutch labor market has experienced rapid credential inflation and the expansion of university attendance without corresponding expansion of graduate level roles, similar to what has happened in Britain and America, but compressed into a shorter time frame. The specific Dutch phenomenon of educated young people taking lower-skilled roles while carrying the cost of their education is documented and significant. This is a pattern across the developed world. Countries that massively expanded university access without expanding the graduate level economy to absorb the output are experiencing the same credential inflation and the same graduate underemployment. The Dutch, the British, the Americans, the Canadians, the Australians are all experiencing versions of the same problem because they all made the same policy decision. Expand university access, subsidize it through loans, grow the sector without asking whether the labor market could absorb the output. The answer clearly was no.
One more thing before the close, the generational context. Because Gen Z is the first generation to be fully inside this problem rather than adjacent to it. The boomers went to university when a small percentage of the population had degrees. The credential was rare and valuable. Many of them did not go at all and built successful careers without it. Because the labor market of the 1970s and 1980s rewarded skills and tenure in ways it no longer does. Millennials went to university as the expansion was happening. The credential was becoming more common, but still carried significant value. The ones who graduated before 2008 entered a labor market that was still absorbing graduates at reasonable rates. The ones who graduated after 2008 started to feel the first effects of what was coming. Gen Z are graduating into the end point of a process that has been running for 30 years. The credential [music] has been mass-produced. The labor market has restructured. The H1B pipeline is mature and operational. The AI tools are automating the entry-level tasks that graduates were being hired to do. The remote work revolution has removed the implicit mentorship that used to make hiring graduates economically rational for companies. Everything that made the degree worth the investment has changed simultaneously and Gen Z are the first generation to experience all of it at once. Entering the market after all the changes rather than watching them happen.
This is why the anger around this topic is so intense. It is not ingratitude. It is not laziness. It is the specific rage of a generation that followed the rules, paid the cost, and arrived at the destination to find it had moved. That rage is legitimate. The question is what you do with it. The people in this generation who come out of the next decade in the strongest position will be the ones who directed that rage into building rather than waiting. Who understood the old system was broken before the consensus caught up with that reality. Who started learning the skills the market actually needs before the market made it obvious that was what was required. [music]
The university system is contracting. The degree is losing its value. Companies are restructuring their workforces around cheaper imported labor and AI tools. None of this is reversing in the next 5 years. The political will to address it does not exist in any major party in Britain or America. The companies doing it are too profitable and too politically connected for meaningful regulation. The 18-year-old deciding right now whether to take the loan and spend 3 to 6 years getting a credential or to start building real experience in the real economy, that person is making the most consequential financial decision of their life. And the honest answer for the majority of courses at the majority of institutions is that the loan is not worth it. The credential will not deliver the return it is being sold as delivering. The experience started at 18 will in most sectors outperform the credential by the time both paths arrive at 24. Some people still need the degree. Medicine, law, architecture, engineering. The professions that are genuinely gatekept by credential and that genuinely require [music] the specific knowledge the degree provides. If that is your path, the calculus is different. For everyone else, for the business degrees and the humanities degrees and the social science degrees and yes, increasingly the computer science degrees. The question of whether the investment delivers the return has a different and less comfortable answer than it did 30 years ago. The system is not going to tell you this. The universities are not going to put it in their prospectuses. The government that designed the loan scheme is not going to advertise the outcomes. But the data is public and it is unambiguous. Reddit, make your own decision. Nobody is coming to save you from a bad one. That has always been true. It is just more true now than it has ever been.