The national financial crisis could potentially affect college students in job searching or student loans
By Lacey Bitter
Senior Billy McWood is graduating in December and has begun the search for a job, which is rarely an easy task for anyone. But he has found that this year the job hunt may be even more difficult for graduates entering the career world.
"I think the financial crisis has snatched up those 'easier' jobs," McWood said of his struggle to find jobs available to recent college graduates with no career experience. "People are staying with their jobs."
He will also soon begin the long process of paying off student loans, which is a somewhat complicated task in the today's unsteady economy.
McWood is one of millions Americans affected by the crisis caused ultimately by faulty mortgage plans that has now spanned from Wall Street to Main Street. The crisis provides worries for college students regarding everything from their daily spending to their uncertain futures.?? Jobs after graduation?
The American economy lost 159,000 jobs in September, which was the worst month in five years for job reduction. This May UP will send out about 700 graduates into this ever-changing job market.
McWood, who is preparing to enter into this tumultuous environment, has begun searching for a job and is discouraged by the economic outlook.
"The job market is horrible," McWood said from his experience. "A lot of the jobs that would fit someone who just graduated from college are all taken."
The Office of Career Services is aware of the potential impact from the financial crisis but has yet to see any startling changes.
"When people hear recession, they associate that with unemployment because they are connected, but I don't know if that will necessarily impact this year's seniors," Amy Cavanaugh, Director of Career Services, said.
Cavanaugh said that she always recommends that students begin searching for a job or internship as soon as possible, regardless of the economic situation.
Stock Market
The average U.S. stock mutual fund is down 28.5 percent, according to national investing group Morningstar early this week. Everyday reports from Wall Street announce more grim news.
It is in this unsteady market that the UP Investment Association is entrusted to manage a $50,000 portfolio that a private donor gave the club five years ago so that students could have hands-on practice in investing.
"We're definitely down," senior Doug Pederson, the Investment Association president, said.
The club had about $60,000 in its portfolio last December and has lost about $10,000. The association also have nearly $20,000 in cash in its portfolio that is not invested.
"You usually want to have that invested because if you don't have it invested, you won't make interest on anything," Pederson said.
He said that many mutual funds are starting to carry more cash and placing their money in more predictable markets such as gold, money markets or government bonds.
The club is still monitoring its investments throughout this financial crisis in the hopes of making a profit.
?Student loans
Seven out of 10 parents nationwide are worried about keeping up with college tuition payments, according to a recent study by the National Education Association, and with banks struggling to stay afloat, student loans could be affected.
"I'm absolutely terrified about paying back student loans," McWood said. He plans to pay off the loans by himself, with the first payment due six months after he graduates.
In August, consumer borrowing decreased for the first time since 1998, with student loans contracting at an annual rate of 5.4 percent, according to the Federal Reserve.
"Capital markets are slowing dramatically thereby affecting funding sources for student loans," Financial Aid Director Herald Johnson said in an e-mail. He mentioned that it is difficult to predict the economic outcome of the student loan situation, though.
?Spending
Nationwide, spending has been flat or down since June, and many economists are predicting that the third financial quarter of this year will show the first quarterly decline in consumer spending in 17 years.
Consumers have been searching for the best deals in everything from gas prices to groceries, but for the average frugal college student, this may be nothing new.
"I don't have a job, so I have no money," freshman Jerri Cash said.
Nonetheless, unlike past recessions in the nation's recent history, such as the recession of 1990 to 1991, confidence in the economy is low. According to the Reuters/University of Michigan Consumer Sentiment Index, in the early 1990s recession, consumer confidence ranked 64 out of 100. This year consumer confidence is in the 50s.
Bursting the UP bubble
Eight out of 10 Americans are worried about their personal finances and the economy, according to the annual survey conducted by the American Psychological Association, but that does not necessarily mean that college students are worried.
With the lack of transportation or time to spend money, along with a limited access to national news, some UP students haven't noticed a difference in the economy.
"I had no idea," Cash said of the financial crisis.
Sophomore Gaona Yang hasn't noticed a difference either, but she has heard some of the discussions of the economy.
"I'm just taking it day by day right now. We'll see how it goes," Yang said.
