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This paper introduces and critically reviews the Saudi education and unemployment situation. It sets out the specialized nature of issues regarding education and unemployment which are seldom found in other countries. The governmental efforts and subsequent results in the employment sectors are investigated to illustrate the reasons behind prevailing and expected future graduate unemployment. In addition, this paper proposes the application of a combination of a rational planning model and the concept of communicative rationality in solving the problem of graduate unemployment in Saudi Arabia. It asserts the need for comprehensive data on the nature and magnitude of unemployment, and adequate consultation with all the stakeholders including the private sector. A brief survey conducted among the graduates of King Fahd University of Petroleum & Minerals (KFUPM) reveals that, while they are competent and easily absorbed into the market, the scenario is not the same for other educational institutions. Similar studies for other educational institutions will facilitate an understanding of the extent of coordination with the job market. A study is being conducted to enhance the creation of a link between the market demand for educational programs and programs offered by educational institutes.