A new report by the University of Cape Town (UCT) Liberty Institute of Strategic Marketing has revealed that while most South African graduates still see their degrees as worthwhile, many are finding the transition to adulthood and financial independence more difficult than ever.

The report, titled The First 100 Paychecks: An Investigation into South Africa’s New Professionals, found that more than 80% of graduates view higher education as a valuable investment.

However, rising living costs, underemployment, student debt and family responsibilities, such as the “black tax”, are making it increasingly challenging for young professionals to achieve financial stability.

The study highlights that many young graduates are caught in what psychologist Jeffrey Arnett terms “emerging adulthood”, a phase where individuals feel “in-between,” no longer teenagers but not yet fully independent adults.

Report co-author Paul Egan said higher education remains one of the strongest investments in South Africa, even amid growing pressures.

“A degree is still one of the best investments you can make in South Africa,” Egan explained.

“While graduates face challenges like rising living costs and intense competition, the long-term benefits of higher education, from financial security to career fulfilment, remain undeniable.”

The report confirmed that holding a degree continues to offer a “substantial advantage” in South Africa’s evolving economy, where specialised skills are increasingly in demand. More than 75% of graduates in their 30s now live in middle- or upper-class households.

However, the picture is less secure for younger graduates. Although graduate unemployment remains well below the national average at 12%, the number of unemployed graduates has more than doubled since 2015.

The report noted that competition for entry-level positions has intensified sharply. For example, a recent South African Police Service recruitment drive attracted over 300,000 qualified graduates for just 5 500 trainee positions.

The study also found that traditional milestones such as homeownership are becoming more elusive. With the average age of first-time homebuyers climbing, many young professionals now fall into what the report calls “Generation Rent,” postponing long-term financial stability.

Despite these obstacles, the report found that graduates are adapting, cutting costs, pursuing side incomes and seeking further qualifications. Encouragingly, more than 80% of respondents said their work was intellectually stimulating and personally rewarding.

Co-author Associate Professor James Lappeman said the university experience continues to deliver benefits that extend far beyond one’s first job.

“We shouldn’t underestimate the value of the university experience itself,” Lappeman said.

“Graduates emerge with lifelong connections, professional credibility and skills that allow them to thrive in diverse environments. These are assets that last far beyond the first job.”

While the path to adulthood may be increasingly complex for South Africa’s new professionals, the UCT study underscores that education remains a powerful long-term equaliser, even if the first 100 paychecks come with more challenges than expected.

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