Grim prospects for new grads

Kay Ewing couldn't find work in her field after graduation, so she took a part-time position in a different industry and moved in with her parents.

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NEW YORK (CNNMoney.com) -- With unemployment rising and employers lowering their hiring expectations, soon-to-be-graduates are facing the worst job market in years.

Projected hiring for the class of 2009 is only slightly higher than 2008 levels, according to the National Association of Colleges and Employers, or NACE. In October, employers said they planned to hire just 1.3% more graduates in 2009 than they hired this year, a large drop from the 6% projection NACE made in August.

"It is possible that it will be revised downward again," said Edwin Koc, director of strategic and foundation research for NACE.

The nation's unemployment rate now stands at 6.1%, but it will likely get worse by May. Forecasts predict that it will hit at least 7% in the spring when the next crop of seniors dons their caps and gowns. That would be the worst rate since 1993.

And the official unemployment numbers don't even include those who have settled for part-time positions or given up looking for a job altogether.

But students on the cusp of entering the worst job market in five years already know that their prospects are bleak.

Eighty-one percent of those surveyed said that the crisis on Wall Street is at least minimally affecting their job outlook, according to a poll by Miami-based research firm Universum. Thirty-one percent said they were losing sleep.

As the job market gets tougher, more graduates will be forced to take jobs outside their chosen field or find interim part-time positions just to make ends meet. That can be a rude awakening for young adults trying to get a foothold in a lifelong career.

For college seniors, that reality "will probably sink in sometime during the course of the year," Koc said.

When Kay Ewing, 23, was a senior at Vanguard University in Calif., she said she wasn't too worried about her job search, although she did begin sending out resumes and attending career fairs long before her graduation in May. Since then, the sociology major has had no luck finding a job in her field.

"I did not think it was going to take this long," Ewing lamented.

After applying to roughly 60 positions in education, administration and social work, "I heard back from maybe three or four," she said. So Ewing moved in with her parents and accepted a part-time position at a law firm.

For others, the tough job market may be an opportunity to reinvent themselves, or rethink their career path entirely.

Trudy Steinfeld, executive director of the career development center at New York University, says when it comes to their futures in the workforce, seniors are either angry that their job prospects may be thwarted, hopeful that things will change or relieved to have escaped the pressure of having to settle on a set career immediately.

For those who have always wanted to volunteer, travel or teach, it's "like they have permission now to do what they always wanted to do," Steinfeld said.

The Peace Corps and Teach for America ranked 8th and 11th, respectively, for students in Universum's Ideal Employer Rankings for 2008. Neither were even in the top 200 two years ago.

Students are also turning their attention away from traditionally-lucrative fields like investment banking and toward industries with greater hiring potential, such as accounting.

For example, this year accounting firm Ernst & Young topped Universum's list of ideal employers for business students, surpassing traditional stalwarts Goldman Sachs (GS, Fortune 500) and JPMorgan Chase (JPM, Fortune 500).

"The industries that used to be appealing, like financial services, are becoming less appealing," said Universum USA CEO Claudia Tattanelli.

Government, healthcare and accounting now top the list of industries where students would most ideally like to work, according to Universum.

For those gearing up to graduate this year, Steinfeld says she encourages students to consider jobs outside the traditional trajectory. Business majors, for example, might have better luck submitting applications for finance-related positions in the healthcare industry.

Steinfeld also suggests that students consider small or mid-sized firms, in addition to the traditional "name brand" businesses, and expand their search nationwide.

"We don't like any student to give up on their dreams, but we're all about being realistic."