Overqualified Yet Underprepared, Graduates Face 'Unique Paradox': Study

Students from Baruch College in New York City.
Source: Baruch College
Students from Baruch College in New York City.

As close to 2 million college students prepare to graduate, a study finds that many of them face what it calls a "unique paradox." While the young people are qualified—even overqualified, in many cases—to enter the workplace, most of them feel ill-suited to tackle the harsh realities of an evolving job market.

The wide-ranging study was conducted by the consulting firm McKinsey & Co. in conjunction with online student hub Chegg. It involved more than 4,900 graduates, most of whom finished college between 2009 and 2012, and suggests that graduates are growing increasingly disillusioned with the employment outcomes of their education.

In what may be the most troubling finding, more than half (53 percent) of participants said that they would "do things differently if they had to do it all over again," choosing a different major or a different school.

This "should be an alarming call to action for all of us," said André Dua, a director at McKinsey and lead author of the study. "We need to have a national discussion about how to better prepare students."

The study comes on the heels of the publication of the book "Is College Worth It?", by former Secretary of Education William Bennett. In it, he questions the value of attending the vast majority of colleges. According to Bennett, only 150 of America's 3,500 colleges are actually worth attending.

(Read More: Former Ed Secretary: Only 4 Percent of Colleges Worth the Money)

Indeed, the McKinsey study found that a disturbing one-third of graduates "did not feel college prepared them well for employment."

Students 'Flying Blind'

Half of graduates said when evaluating a school before applying, they didn't consider graduation or employment rates, or the starting salaries of alumni—essentially "flying blind" through the admissions process, the study said.

Many policymakers and the Obama administration have begun calling on colleges to collect and publish such information. But many schools remain reluctant and argue that the value of an education shouldn't be reduced to a simple analysis of results, pointing to cumulative earnings over time of those with a college degree.

Others said that such information would unfairly bias applicants and damage enrollment because of something schools can't legitimately be expected to control: the economy.

Still, some consumer advocates are dubious.

"If someone's borrowing money to pay for college, there's a fair presumption that they will earn enough money to pay it back," said Mark Kantrowitz, publisher of Edvisors.com and an expert on financial aid. "It's important that students and their families be able to make a more informed decision about the trade-off between college affordability and college quality."

(Read More: Forget Financial Aid, Soon-to-Be College Students Need Financial Ed)

"It's unconscionable," said Amy Laitinen, deputy director for higher education at the New America Foundation, a Washington think tank. "This is one of the biggest investments students are ever going to make, and they have little to no information about what the return on their investment will be."

Education to Employment

"We think this all points to the need for a systems approach to the 'education to employment' challenge we face," said McKinsey's Dua. It's critical to arm students with the information they need to make better college and career decisions, particularly given the realities of a shifting labor market, he said.

"We need to educate high school students before they even think about college," said Dua, adding that all colleges need "to integrate work experience into student life."

(Read More: Student-Loan Borrowers Reluctant to Make Big Purchases)

But implementing such a change will be a challenge, according to Kantrowitz.

"If you think of a college as a business, they're all about selling you on enrolling," he said. "It takes a lot of courage for a college to focus on what's in the student's best interest, as opposed to their own financial interests."

Still, said Laitinen of NAF, our ability to meet the challenge will mean the difference between success and failure for a generation of students.

"You wouldn't go to buy a car without doing basic research," she said. "But here we are spending tens of thousands of dollars on a school, and we know almost nothing about it—other than maybe the mascot."

There are signs that policymakers are listening.

The Student Right to Know Before You Go Act, co-sponsored by Sens. Ron Wyden (D-Ore.), Marco Rubio (R-Fla.) and Mark Warner (D-Va.), aims to press colleges receiving federal funds to provide students and their families with data on graduation and employment rates.

"It's really exciting," Laitinen said of the bill, citing the strong bi-partisan support it's received so far.

—By CNBC's Jermaine Taylor. Follow him on Twitter @J_D_Taylor.