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They see candidates with a degree as people who will leave the position as soon as the candidate finds a better job. Don't fret, keep looking, maybe something worth what you have learnt in that degree.
Ah, good old Victoria!! (I'm an Australian & live in Victoria too) it's bloody ridiculous the way the job market is going!! I'm so sorry that you weren't able to get a job there :( Hopefully you'll find another (better) job soon!!!
Unfortunately it's not just VIC. My partner finally got a chance at his first job after searching for almost a year and not getting anything here in NSW
English major?
There could be a number of reasons that have nothing to do with you maybe the boss was pissed you left and was being a spiteful douche etc
Could be as simple that the person making the hiring decision remembered you and didn't like you...
Keywords
They probably see you as overqualified now.
Those jobs are tailored for younger, less-qualified people. Mainly because they assume that all you'll do is work there until you find a job in your field and then leave.