A very important question to ask..

There is a significant bubble in certain specialities of higher education. I can personally attest to the fact that even graduates of specialities where there is less of a bubble (like civil engineering) are having trouble finding work. .. this depression isn't helping, but the fact of the matter is that at some point there are too many people expecting to work outside of the manual labor trades, and not enough in them.
This is a main argument for more liberal immigration laws, and ones not centrally controlled by the Federal Government (states used to have control over this issue), but I digress.

So, eventually we come to the key uncomfortable question:
How many graduate students is too many?

http://mises.org/daily/4832