As I am writing this, the Dow Jones Industrial Average has dipped below the 10,000 mark for the first time in four years. This sharp decline in our nation’s market is followed by last week’s now famously disastrous tumble of 777 points, the largest single-day drop in the history of our country. While not an economic expert, I can understand it when told by the experts that the numeric value of the stock market is not the be-all, end-all indicator of our economic vitality; but clearly, a problem exists. My question is, why isn’t it being noticed by the student community?
We’ve been told that the main reason for our current credit crisis stems from the failure of borrowers to pay back the exorbitant mortgages they were given by lenders taking advantage of the housing bubble. It seems, however, that as university students, most not yet independently exposed to the national economy, we seem to be stuck in a bubble all of our own.
I’ve already labeled myself as a self-admitted layperson in regard to the intricacies of our economy. This crisis in which we find ourselves, however, has focused my attention as to the potential effects these problems will have on our current wellbeing and on our future. As college students we need to know the economic downturn we are experiencing is not just something presidential candidates can use to display their “maverick-ness;” it affects us strongly.
Perhaps the most immediate effect we will notice will be the continued increase in tuition and fees resulting from state-level budget cuts. A recent article in the Herald referenced Jennifer Delaney, an assistant professor for the Department of Educational Leadership and Policy Analysis at UW, explaining that “when a state’s revenues are low, higher education is an attractive option for heavy cuts because these institutions have the ability to collect outside revenue via tuition.”
Along with increased tuition, there will be an even more intense search for student loans. While the majority of student loans come from federal programs with fixed rates, those students with private variable interest loans will certainly feel the effects of a spiraling economy. In addition, those students planning on continuing to a post-graduate education will have a more difficult time finding loans and a more difficult time paying those loans back. These students are in serious danger of adding to the all-time record we have set in this country for student debt, calculated at $551 million by the Student Debt Alert project. And that is just for those lucky enough to get a loan. Kevin Brumf, executive director for
The problems we face in regard to the current economic recession continue to affect us and those around us. It’s safe to assume our parents are all nearing the age of retirement, or so they thought only one year ago. However, the values of the nation’s 401(k)s have lost up to 30 percent of their value in many cases, pushing back retirement years for many and infinitely for some.
However, that said, students currently in college are perhaps the most protected from the current problems our economy is facing. It’s what comes after college that is most threatening. Unemployment is soaring, and layoffs abound in virtually all sectors of the economy; this is hardly a situation conducive to hiring a recent college graduate. Those of us who will be looking for full-time employment months from now may have to alter our plans. Some of us will have to take unpaid positions and attempt to establish ourselves before receiving a coveted full-time paid position. Undoubtedly some of us will be forced to do the unthinkable, the one thing we knew we would never have to do and what we promised we never would: move back in with our parents. Clearly, for some of us, the repercussions of the economic recession may be just too drastic to bear.
Ben White ([email protected]) is a senior majoring in political science.
