Summary

To find out which American cities are best for college graduates, Apartment List graded 100 of the largest U.S. cities using five indicators in three categories - jobs, affordability, and livability.

Few cities on the list ranked well for all three categories. However, the ones that did were cities located in the Midwest and South with relative close proximity to major universities or larger metropolitan areas.

The top three cities for college graduates are Madison, WI, Lincoln, NE and Minneapolis, MN, earning A+, A and A overall, respectively.

The worst cities for college graduates are located in California, Florida and throughout the Northeast.

Popular destinations for college graduates such as New York, San Francisco, Los Angeles, Seattle, Denver, and Austin didn’t make it to the top of our list due to their lack of affordability for those just starting their careers.

Introduction

With graduation season in full swing, many college students are facing one of the most important decisions in their lives - choosing the best place to start their career and call home. This decision could determine future success in their work, social circles and overall quality of life. With so much to consider, recent college grads want to choose a place with a healthy job market and robust opportunities. Additionally, recent graduates want to live somewhere reasonably affordable to help ease the burden of student loan debt while maintaining a relatively comfortable living situation. Plus, recent graduates demand a vibrant social life to achieve a healthy work-life balance and expand their networks outside of college.

Methodology

For the purpose of this report, we analyzed the 100 largest cities in the US for which we could gather the necessary data. We based our index on 5 equally-weighted factors within 3 categories important to college graduates:

1. Jobs: The strength of a city’s job market is based on the unemployment rate for people with a bachelor’s degree or higher.
2. Affordability: Affordability is calculated as a rent-to-earnings ratio using Apartment List median rents and median earnings for individuals with a bachelor’s degree or higher.
3. Livability: To measure livability, we used multiple indicators such as the percentage of the population between 20 and 34 and overall satisfaction with recreational activities and social life in the area. For the latter, we used data from our annual survey of 24,000 renters. We looked at how satisfied renters are with the following factors in their city:
   • Recreational activities (“How satisfied are you with access to parks, community activities, and nightlife?”)
   • Social life (“How satisfied are you with opportunities to date and make friends in your city?”)

We gave each city a numerical score based on its ranking compared to other cities on each of the study’s indicators. We calculated overall scores and grades by averaging the scores for each factor.

Top 10 Cities for College Graduates

Inland cities primarily located in the South and Midwest are leading our best cities for college graduates list.

No. 1 Madison, Wisconsin tops the list of the best cities for college graduates, with high marks for jobs, entertainment, and social life. The third fastest growing tech market in North America and the second fastest growing in the U.S., Madison boasts one of the lowest unemployment rates for college graduates among the 100 largest cities. Home to the University of Wisconsin-Madison, it ranked highest for social life and the percentage of the population between 20 and 34. It’s also 4th best for entertainment options in the area. However, the booming job market affects the demand for housing, stimulating the growth of rental prices in the area. Madison's year-over-year rent growth leads the state average of 1.0% but trails the national average of 1.5%.

No. 2 Lincoln, Nebraska takes the second spot on the list. With the lowest unemployment rate among people with a bachelor’s degree or higher at 1.6%, Lincoln ranks highest for jobs among the 100 largest cities. It also ranked third for social life.

No. 3 Minneapolis, Minnesota ranked well for entertainment, social life, and population. Additionally, it had the highest share of millennial homebuyers in 2016 which makes the area attractive to young people ready to settle down.

No. 4 Arlington, Virginia ranked well in all categories except for affordability. We expect Arlington to become even more attractive to college grads with Amazon opening its second headquarters in the city. In fact, the retail giant already posted its first job listings for its HQ2. Amazon is currently leasing a temporary office in the Crystal City neighborhood and already employs over 10,000 workers in the Virginia and DC metropolitan area. The high demand for jobs might become a contributing factor for rent increases in the area affecting housing affordability. Currently, Arlington's, year-over-year rent growth is 2.9%, greater than the state average of 2.0% as well as the national average of 1.5%.

No. 5 Pittsburgh, Pennsylvania has high scores for jobs and population between 20 and 34. With tech companies like Google, Apple, Facebook, and Uber opening offices in the area, Pittsburgh is a great location for career-oriented college graduates interested in the tech world.

Bottom 10 Cities for College Graduates

The worst cities for college graduates are located in California, Florida and the Northeast. Most California cities ended up at the bottom of the list due to issues with housing affordability, and are the places with the highest rent to income ratio. On this list, we see several suburbs of large cities with historically high rent prices and falling homeownership rates.

Stockton, California has the lowest score on the list of cities for college graduates, with a high unemployment rate among college grads and a low score for housing affordability. Additionally, Stockton ranked lowest for social life and entertainment with renters expressing dissatisfaction with dating options, community activities, and nightlife.

Other California cities that made it to the bottom 10 include Fremont, Santa Ana, Oakland and Anaheim, which scored poorly for affordability, and San Bernardino that scored low for jobs, entertainment, and social life. In fact, Fremont residents need to earn the most money to afford rent out of the 100 largest cities according to our recent study.

The second worst city for college graduates is Newark, New Jersey with low scores for jobs, affordability, social life and entertainment.

No Coastal Cities Made it to the Top

Traditional destinations for ambitious college graduates such as New York, San Francisco, and Los Angeles didn’t make it to the top of the list, receiving low scores for housing affordability. New York City, in particular, ranked the lowest for this indicator. In fact, a median earning college grad would have to spend 37.80% of their earnings to rent a median-sized one bedroom apartment.

Additionally, new popular destinations for college grads such as Denver, Seattle, and Austin also ranked comparatively low for housing affordability.

Conclusion

Many cities offer one or two elements important to college graduates, but very few provide a perfect mix of a strong job market, a solid salary to rent ratio, and entertainment options necessary for a healthy work-life balance. For example, Oklahoma City ranked very well for jobs and affordability, but social life and entertainment options received low scores from their residents.

Traditionally, attractive job markets and new tech hubs have a lot to offer, but they might not be the best option for college graduates trying to pay off student loans as these markets offer few affordable housing options. Inland cities with booming job markets primarily located in the South and Midwest tend to offer a lifestyle more suited for a recent grad that features reasonable housing affordability and a significant social scene.