The number of over-qualified students graduating from university entering non-graduate jobs has reached "saturation point", the report from the Chartered Institute of Personnel and Development said.
This is leaving too many young people with an unnecessary burden of debt as they enter the workplace, warned the report, entitled 'Over-qualification and skills mismatch in the graduate labour market'.
Donia Narh, a Christian from Aces youth Project which encourages young people to reach their potential, told Premier's News Hour the Church had a role to play in helping teenagers.
"I think a lot of young people are going into university unprepared for life after university," she said. "So they're not work-ready, they may be taking courses that are not suitable for the jobs that they want, and a lot of students are still taking traditional subjects... there's a high competition for those particular jobs.
"A few years ago the government cut career services, so career services are not readily available to a lot of young people anymore. Also, the CIPD report mentioned that apprenticeship roles are being taken away because graduates are going into those roles.
"Where the government has cut career services, and a lot of young people are attending churches, and their parents go to churches, every church should have a careers advisor, or bring a careers advisor in, to help these young people.
"There's great concern if they're going into study and they're not getting the jobs that they're capable of."
Just under 60 per cent of graduates in the UK work in non-graduate jobs, the report said, adding that countries with a history of strong vocational training such as Germany have only 10 per cent or less of graduates in non-graduate positions.
The UK has a graduation rate of 54 per cent, the second highest in the OECD area, the report said, adding that while a rise in graduates outstripping the number of high-skilled jobs available is a trend in most countries, it is "particularly pronounced in the UK".
A Department for Business, Innovation and Skills spokesman insisted the Government is doing enough for students.
"We are providing the right mix of university places and apprenticeships to ensure more people have the opportunity to advance their careers and businesses get the skills they need to grow," he said.
"Demand for higher education remains strong and graduates enjoy a pay premium that reflects their value to employers."
Donia Narh speaking to Premier's Antony Bushfield on News Hour: