Hope remains for students, regardless of market woes
Students are learning the hard way that the current financial meltdown doesn't just affect Wall Street or the big banks, but "Main Street America," too.
In many ways, that "Main Street" is College Avenue, Bartholomew Road, Joyce Kilmer Avenue or George Street, as students University-wide now face economic roadblocks.
"Obviously the current financial meltdown is a situation well beyond the control or understanding of any one person, and everyone is concerned and affected by what is going on," said economics department Chair Barry Sopher. "Exactly where it will all end up is unclear as well, so it is difficult to predict what the future holds for students today."
Among the many issues students now face, a failing job market and student loans feature highly on students' list of concerns.
Sushil Dayal, a Livingston College senior, said while he does not fear unemployment after graduation, he acknowledges he may not be able to lead the comfortable life his parents intended for him.
"I've been living an awesome upper middle class life, based on what [my parents] provided me," Dayal said. "I just hope I can continue that as I move to the job market."
As the economy weakens, students face the plight of rising unemployment rates. According to the U.S. Department of Labor's Bureau of Labor Statistics economic news release in September, over the past 12 months, the number of unemployed persons has increased by 2.2 million, while the unemployment rate has risen by 1.4 percentage points.
Economics Undergraduate Director Jeffrey Rubin said there are many factors that contribute to a lack of new jobs for graduating seniors. Aside from the obvious issues of company downsizing and business budget cuts, Rubin said current employees' delayed retirement impedes job openings for new workers.
"If a lot of baby boomers delay their retirement, it blocks the job availability for students," Rubin said.
Rubin also said when students come into school when a certain major is hot, often times a number of students will go into the same major, making competition for a job in their prospective market all the stiffer.
But Sopher encourages students to think about what they want to do in the future, rather than what they want to own in the future.
"If you end up doing something that you want to do, the rest tends to take care of itself," Sopher said. "If you only think about what you want to have, then you may just be jumping on the treadmill of commonplace ambition – big house, nice car, etc. – which does not guarantee happiness by any means."
Conversely, Rubin suggested taking jobs that may not be a student's first pick and adjusting their expectations a little.
"You know what, its better than sitting at home and doing nothing," Rubin said.
He also suggested thinking more carefully about course loads, and ascertaining skills from across the board.
"This is not the time to take it easy," he said. "Take a couple extra things that might get you some good background."
American Economy in Wartime and American Monetary History Professor Hugh Rockoff said while a recession is always a problem for students graduating and entering the job market, it may not be a bad time if they are pursuing education after graduating.
"Students have to weigh a lot of factors," Rockoff said. "If they are on the margin about whether or not to purse further education, this may be the time to do it."
Another issue that currently faces students today is the matter of paying for college. In the face of a collapsing economy, the number of available student loan lenders is steadily declining.
The National Association of Student Financial Aid Administrators reported 111 lenders suspended providing federally guaranteed loans. Private loans are also becoming harder to get, with 34 private lenders quitting the student loan business, according to the NASFAA.
According to StateUniversity.com, U.S. University Directory, 79 percent of Rutgers University-New Brunswick/Piscataway students take out student loans each year. Of that statistic, 58 percent borrow an average of $4,858 in private student loan aid, while 25 percent borrow an average of $2,999 of federal grant aid, 43 percent borrows an average of $5,232 in state and local grant aid, and 41 percent of students borrows an average of $3,486 from institutional grant aid.
These numbers may not seem to add up, but many students take out a combination of federal grant aid, state and local grant aid, institutional grant aid and private loans each year. Students University-wide have been caught with their hands in different student loan cookie jars each year, and now there is a possibility some of these students may be cut off.
But with Treasury Secretary Henry M. Paulson, Jr. and Department of Education Secretary Margaret Spellings announcement Oct. 10 that the administration is going to take a number of steps to support the student loan market, there is a silver lining to the loan crisis.
He said the loan purchase and participation interest programs implemented over the last few months have helped ensure that federal student loans were available to students enrolling in postsecondary institutions for the 2008-2009 school year, and federal student lending is exceeding last year's pace.
Paulson said his administration's financing program in the past supported over 40 percent of the Federal Family Education Loan Program loans that have been disbursed this year. He said over 800 lenders enrolled in the loan purchase program, and almost $51 billion of federally guaranteed loans have been originated for the current school year, up from approximately $45 billion for the same period last year.
As for the future of student loans, Paulson promised decisions for the 2009-2010 academic year to be made over the next few months.
"Using our newly extended authorities, the administration is moving aggressively to support the continued availability of funding for federal student loans in the next school year with the goal of restoring the government guaranteed student loan market to normal operations," he said. "We are working on an expedited basis and will make further announcements in the coming weeks."
In an e-mail sent to students and faculty Monday, University President Richard L. McCormick affirmed the University's devotion to its students and their dependence on financial aid. He said the University participates in the federal direct loan program and the NJCLASS program, providing students with access to dependable and affordable sources of funds for student loans.
"Liquidity is not an issue for either of these programs, so money continues to be available to our students. If there is any concern, it will be the availability of private loans from banks in the spring semester."
McCormick said financial aid and student services offices will help students and their families as much as possible, and financial aid continues to be a central priority of the University's fundraising efforts.
Overall, Sopher said students should focus their efforts on getting the best education they can within their means.
"If you have to do without some things while getting through school, that's OK, it won't be forever," Sopher said. "Stay focused on what you are trying to achieve. If you have to take time out and earn money and then return to finish college, do it."