The ailing economy could mean fewer jobs
By Maureen Inouye
Recent headlines warning of economic recession do not seem to be affecting students, and perhaps students are right not to worry.
The news in the past two weeks has warned of possible recession in 2008. According to a poll conducted by Fortune Magazine, three out of four Americans believe the U.S. economy is already in recession.
But many students on campus, while recognizing the economy's downturn, do not seem overly concerned about its effect on their lives.
"I hadn't really heard about it," said senior history major Ashley Bettega. "Yeah, I guess I should be a little worried about that."
She admitted that she had not really thought about what it meant for her.
Todd Easton, an economics professor, says it's impossible to know if we are in a recession until after economic data has been collected.
"We could be right now - or not," he said. According to CNNMoney.com, economists are still debating whether the U.S. have already entered a recession, and if not, whether America will later in 2008.
A recession can affect student loan rates. Job prospects could also be affected by a recession, making it more difficult for students to find part-time and summer work as well as permanent jobs after graduation.
"I'm going to take a year off, then go to grad school - so I'm not really looking for a career yet, anyway," Bettega said. During a recession, more students turn to graduate school as an alternative until the economy picks up.
"I'd just advise students to look for jobs in advance," Easton said.
Current students shouldn't need to worry about paying tuition this semester, though, as Easton agreed that many student loans will probably not be affected.
"Most of the loans are coming from the federal government, not the states, and the federal government doesn't cut back on funding like the states," Easton.
Even loans from private lenders are not really in danger, as federal mandates are in place, ensuring that, if students default on loans, the federal government will reimburse the companies.
Therefore, because the loans are insured, the lenders have no reason not to lend to students even during recession.
"Nothing bad is going to happen," said senior psychology major Dan Noel. "It's an election year and everything's always fine during an election year."
Easton agrees there is some truth to this statement. Bush's administration has already agreed to tax cuts, hoping lower taxes will encourage Americans to increase spending, which boosts the economy.
Historically, if there is a recession, the incumbent party loses during elections, so the Republicans are trying to ensure the recessive trends do not continue.
People are worried right now for a number of reasons, Easton said. There was a housing boom, in which many people speculated on houses expecting high returns - but then housing prices dropped, people lost money, and homeowners could not pay their mortgages.
The construction industry and mortgage companies have suffered, which has led to layoffs in both areas, spurring worry about the U.S. economy as a whole.
"These downturns represent an enormous challenge to the economy," Easton said as he explained how both industries are shrinking.
These downturns, unless they take a dramatic turn (which seems unlikely due to the preventive measures being put in place), should not affect current students until they go to find jobs in a few months.
And even then, unless students are looking for work in construction and banking industries, there should be sufficient prospects.
