Simply put business have put their money into short term H1-B and Offshore workers.
Which is a symptom of a problem that started many years before 2000. The race to the bottom line really has no limits.
With a college hire the employee can change jobs at will. You as the employer are expected to put money into employee development.
What I've found impressive with the H1-B visa holders I've worked with is the network they have to train them. Some of their resumes are fluff, but you'd never know it because what they don't know they don't just have google there for them but a network of other H1-B visa holders to answer questions and basically provide that "on the job" training they supposedly don't need. That's what college kids also have to compete with, not just low pay and the inability to hop jobs...but a training network.
They can't compete so they will not get hired. The only way to win this (yes, I have a side because I too used to be a fresh out of college kid and it took me a decade doing odd free jobs to gain the experience you need to get a job now. Today I spend my days teaching H1-B visa holders how to write clean code and solve basically everything they can't figure out.) is to give H1-B visa holders more rights just as any employee would have. Give them the right to play the market just as US employees can. It might seem ass backwards, but fighting change that large corporations profit from almost never works in an oligarchy owned by them. I'll give them that I've yet to meet one that isn't a hard worker (granted they got here for a reason), but in terms of technical ability they are no better or worse than a college grad...and I think we can at least agree there are plenty of them without a job?
Of the college interns I've worked with I was very impressed and they were far far more independent than any H1-B visa holder I've ever met. Granted the interns at my company would have already been at the top of their class though.
It is much easier to suggest solutions when you know nothing about the problem.