As most frequent China forum visitors know, I'm generally down on "tours". However, if you happen to chance upon any newspaper/internet ads that offer air+land for a marginal premium over air only, you might want to look a little further.

However, bear in mind:

1) these deals aren't always available
2) they generally entail staying at hotels that wouldn't get much business, were it not for tours (i.e. sub-par Chinese managed hotels)
-your college grads can and should make due as long as their effective price is close to zero, but if they end up costing $50 per night or more, then it's better to scrap the tour idea
3) air+land tours generally include a few other benefits such as opera tickets and airport transfers, but I suggest you refrain from getting too drawn in by their value because prices in China are still reasonable and there's a good chance that your recent college graduates will skip out on the opera anyway
4) make sure, up front, that your friends will have the ability to opt out of any of the more structured touring activities.... unless you want them to spend their days receiving ill-informed history lessons, eating at sub-par restaurants, and hanging out in overpriced gift shops

In closing, I suggest you figure out what air fare would cost during your preferred dates (let's say $800 + $100 for the requisite PEK-SHA hop). Then, multiply their number of hotel nights by $50, divide by two, and add it to your total. Assuming 10 nights, we're now at $1150. If you see any tours that come in under this amount, then you should do a little more research; otherwise, advise them to buy their airplane tickets and a guide book.