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I am assuming they fulfilled class requirements and possibly internship/volunteer work that pushes them above starting positions, but haven't yet graduated and completed their degree thus making them not qualified enough for higher positions.

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Umm. Actually, I have helped hire people for non-entry level positions due to experience from internships. And those who did not have internship experience started at the entry level positions. So I do know what I am talking about. And I said I was assuming. OP could very well have a different situation.

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Sometimes, even if the employee is willing to take the job, the employer will refuse if overqualified. It sucks : I honestly know this from personal experience.

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