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I am currently a student in my last year. I will be working as an intern for the next three months, and if everything goes according to plan I will get my degree in five months time.

This leaves me unemployed for two months, plus the time needed to find a post-graduation job. Is it alright to start looking for my first employment a few months before I get my degree ? And if it is, what should I write on my resume?

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For the most part yes, you can (and should) start looking now, but there may be special cases where an employer won't be able to consider hiring you until you've got a degree. Since you didn't mention any professional certification (architecture, law, medical practice, etc.) then I'm guessing that's not the case. My answer is also centered around the practices in the United States.

Typically, students just put (expected) next to a future (or current) year on resume/profiles to make this clear:

Bachelor of Whatever, Whatever University, 2012 (expected).

Getting your degree isn't really a magical date; you are going to see it through and you've already gained much of the experience. I would start looking now; some employers may even see that initiative as a positive. As with most things, employers are usually willing to try to work with issues that the candidate is honest about.

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    Found my first job before I finished my degree... – Karlson Apr 13 '12 at 19:49
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    There are University careers departments to help you - most last year undergraduates look for a job in their last year – user151019 Dec 18 '15 at 20:30
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Regarding resume: put the degree and when you expect to see it. If nobody did it this way, all new graduates would have to wait months after graduation to get a job.

Yes start looking now. With the economy we have had the last few years there is no way to predict how long the search will take. The risk is that you will be applying for jobs that can't wait for you to graduate. But you might gain experience in interviewing. Also your time as an intern to find a job.

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    Thank you for the answer, and you're right, gaining experience in interviewing could be useful. – DistantEcho Apr 13 '12 at 16:15
  • +1: Gaining experience in interviewing. At least in my field (Software Development), 'technical interviewing' is its own skill, distinct and separate from developing software, and one they don't teach at university. – James Adam Jan 16 '15 at 14:54

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