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New College Graduates Are Overestimating Their Earnings Out of School by a Casual 100 Percent

CNBC — Newly minted graduates are in for a shock.

Although the job market and starting salaries for the Class of 2022 look significantly better than last year, they may fall far short of graduates’ expectations.

Employers plan to hire about 31% more new degree holders from this year’s graduating class than they hired from the Class of 2021, according to a report from the National Association of Colleges and Employers.

The increased demand for workers is also driving starting salaries higher for some majors, NACE found.

The average starting salary for this year’s crop of graduates is projected to be more than $50,000, based on the most recent data.

Yet current college students expect to earn twice that — $103,880 — in their first job, according to a separate survey of college students pursuing a bachelor’s degree by Real Estate Witch in March.

Remember when that Penn professor said a quarter of her Wharton School students thought the average American made six figures per year, with one thinking the average salary in America was $800,000? It turns out far more kids than just those in her classes not only think everyone in America is making $100,000, but that they're going to walk out of school and get that immediately.

As it turns out, the real number new grads can expect to make in their first year out of college is $50,000, just about in line with the average salary in America overall. And that's before the government takes a nice chunk of every paycheck as well, a concept I'm not entirely convinced these kids are familiar with either, given what we already know about their guesses on earnings. That first look at FICA is going to be a real kick in the dick.

I'm rooting for these kids, man. I hope every one of them ends up making $1 million a year. They deserve it — and they'll be the first to tell you that.