Only a third of final-year students expected to find graduate employment, survey reveals

Final year students are bracing themselves for a jobs crisis, with only a third expecting to find work amid fears that vacancies will be filled by last year's graduates, researchers have found.

One in six of the "class of 2010" said they would not have gone to university if they had known how tough the graduate job market would be, according to a survey of more than 16,000 students. Young people studying for non-vocational degrees are likely to be hit hardest, with only a quarter of arts and humanities students expecting to find a graduate job.

In its annual graduate careers survey, market research company High Fliers Research found that students' confidence about finding a job was at its lowest level for 15 years, with 45% of respondents describing prospects for graduates as very limited.A third feared people who failed to get a job after leaving university in 2009, in the middle of the recession, would snap up most of the entry-level positions.

Martin Birchall, the managing director of High Fliers, said: "Final-year students due to leave UK universities this summer are just as pessimistic about their employment prospects as those who graduated 12 months ago.

"The recession may be officially over, but with a record number of students due to complete degrees in the coming weeks and tens of thousands of last year's graduates still looking for work, there is widespread concern on campus that competition for graduate jobs has never been fiercer."

More than a quarter of the students, from 30 universities across Britain said they planned to continue their studies, while 8% expected to take voluntary or temporary work and 16% planned to go travelling (16%). One in seven – the highest level seen since the survey was first conducted in 1995 – had not yet decided what to do. Of those who have applied for a graduate job, fewer than one in six said they were "very confident" of landing a firm offer before they graduated.

Debt remains a big issue, with final-year students believing they will leave university owing about £17,900, up from an average of £11,600 in 2008.

For the second year running salary expectations have dropped, with students believing they will earn an average of £22,000 for their first job, 3.1% less than in 2008.

There were wide differences in perceived future earnings between disciplines. Students reading arts and humanities think they will be paid an average of £19,700, but those studying law expect as much as £24,800.

Five years after graduating, law, business or finance and IT students imagine they will bring in at least £44,000 on average, whereas those who took arts and humanities expect to be on about £34,600.

David Willetts, the universities minister, said: "The jobs market continues to be very tough for young people, who were among the biggest losers during the recession. We are committed to doing all we can to make it easier for them to find work and realise their ambitions."