As summer winds down and a new academic year approaches, many young adults across the U.S. are preparing to start college, while others are navigating the transition from campus to career.
For the class of 2025, it’s a particularly difficult time to enter the job market. Economic uncertainty, a cooling in white-collar hiring, and artificial intelligence’s increasing takeover of entry-level roles are contributing to a more competitive landscape for recent college graduates — and higher levels of unemployment. In fact, a recent analysis by the Financial Times found that young men with college degrees are now just as likely to be unemployed as their peers without a college education.
Perhaps not surprisingly, college enrollment among Gen Z has been declining as more young adults question whether a costly degree still offers a reliable return on investment. With fewer high school graduates pursuing higher education and many recent graduates still searching for stable, full-time work, the burning question these days is how far a college degree goes financially. Although what college a young job seeker went to and what major they chose are still key in determining the job they get and how much money they make after graduation, where a graduate lives is also a major factor in long-term financial outcomes.
To help students better understand these impacts, researchers at Upgraded Points — a company that provides advice on credit cards rewards programs and other financial products — analyzed which U.S. metro areas and states are most and least affordable for recent college graduates. The analysis compares median earnings data from the U.S. Census Bureau with cost of living estimates from the Economic Policy Institute to assess how far a graduate’s income goes across the country.
Top Cities for Recent Graduates
Tucson, Arizona, ranks as the most affordable large metro area for recent college graduates, with median earnings exceeding estimated living costs by $19,260 per year. Recent graduates in Tucson earn a median income of $61,770, while the local income required to cover essentials such as housing, transportation, and healthcare is just $42,510.
Tucson’s affordability is bolstered by its relatively low housing costs. The city serves as a regional hub for aerospace and defense, health care, and higher education — anchored by the University of Arizona — offering diverse employment options for young professionals.
Milwaukee, Wisconsin, follows closely, with recent graduates earning $18,590 more than the estimated $43,180 needed to cover basic expenses. Known historically for its manufacturing base, Milwaukee has diversified its economy in recent decades with growth in financial services, health care, and education. Its relatively low cost of living and growing startup ecosystem have made it increasingly attractive to younger workers.
Houston, Texas, ranks third among large metro areas, with graduates earning $15,760 more than what is needed to cover costs. The city’s large and diversified economy includes strong representation in energy, health care, aerospace, and logistics. Despite its size, Houston maintains a below-average cost of living compared to other major metro areas, helping recent grads stretch their paychecks further.
Rounding out the top 10 most affordable large metros for recent college graduates are Cincinnati, Ohio; Detroit, Michigan; San Antonio, Texas; Providence, Rhode Island; Rochester, New York; San Francisco, California; and Indianapolis, Indiana. Notably, many of these cities are in the Midwest and Northeast, regions generally characterized by lower housing costs and slower population growth compared to other parts of the U.S.
The San Francisco–Oakland–Fremont metropolitan area is the outlier in the group: While it remains one of the most expensive cities in the country, the exceptionally high median earnings for recent graduates ($82,360) offset its cost of living, placing it within the top tier for affordability. These elevated earnings are likely influenced by the city’s concentration of tech jobs, which typically offer higher starting salaries for recent grads with in-demand degrees.
The broader trend suggests that a combination of moderate costs and solid local job markets — rather than simply high salaries — makes certain metro areas more financially viable for young, college-educated workers.
Worst Cities for Recent Graduates
Unlike the most affordable metro areas, which are mostly clustered in the Midwest and other lower-cost regions, the least affordable large cities for recent grads are more spread out — both geographically and economically. This group includes high-cost coastal hubs like San Diego, California, and New York City, as well as fast-growing Sun Belt cities like Orlando, Florida, and Nashville, Tennessee. What they have in common is a noticeable gap between what recent graduates typically earn and what it takes to cover basic living expenses.
San Diego ranks as the least affordable large metro area, with recent grads earning nearly $62,000 but still coming up $9,640 short of what’s needed to break even. New York City, which ranks ninth worst overall, tells a similar story: Graduate wages are relatively high at $63,830, but the cost of living is even higher, leaving grads nearly $5,000 in the red.
Riverside, California, and Orlando round out the bottom 3. In both places, recent grads earn just under $50,000 — well below the national median — while dealing with above-average living costs. That combination leaves an annual gap of more than $8,000, highlighting how even midtier cities can be tough for young workers when wages don’t keep up.
The Earnings Gap of Recent College Graduates by State
Affordability patterns at the state level echo many of the same trends seen in big cities. The least affordable states fall into 2 main camps: high-cost coastal states like California, New York, and Hawaii, and parts of the South, including Alabama, Louisiana, Tennessee, and South Carolina. In places like California and New York, even strong starting salaries can’t keep pace with the high cost of living — especially housing. In the Southern states, it’s often the opposite problem: Costs are lower, but so are wages, and that gap still makes it hard for recent graduates to get ahead.
The most affordable states, on the other hand, tend to be in the middle of the country, including the Midwest, Southwest, and Rocky Mountain states. Wyoming comes out on top, with recent grads earning about $15,000 more than they need to cover the basics. States like Wisconsin, North Dakota, and Nevada also offer a strong balance between earnings and expenses. For graduates looking for a place to get a financial foothold, these states show that it’s not just about how much you make, but how far that paycheck actually goes.
For a detailed breakdown of affordability for recent college graduates by metro area and state, see the full report on Upgraded Points: The Most and Least Affordable Cities for Recent College Graduates.
Methodology
Image Credit: PrasitRodphan / Shutterstock
This analysis uses data from the Economic Policy Institute 2025 Family Budget Calculator and the U.S. Census Bureau 2023 American Community Survey Public Use Microdata Sample to assess the affordability of U.S. metro areas for recent college graduates — defined here as individuals from 22 to 27 with a bachelor’s degree or higher, working full time. Affordability is measured as the gap between median earnings and the local income needed to maintain a modest but adequate standard of living, based on EPI estimates. Earnings were inflation-adjusted to 2024 dollars.
EPI’s income thresholds include the cost of housing, food, transportation, health care, taxes, and other necessities for a single adult with no children. County-level cost data was aggregated to the metro areas and state levels using population-weighted averages.
Only metro areas with complete data and a relative standard error below 10% were included. To allow for fair comparisons, metro areas were grouped by population size: large (1 million or more residents), midsize (350,000 to under 1 million), and small (fewer than 350,000 residents).
For complete results, see The Most and Least Affordable Cities for Recent College Graduates [2025] on Upgraded Points.
