Recession and College Student - Essay Example

Recession and College Table of Contents Introduction 3 The Effects of the Recession 3 The Recession and a 4 Conclusion 7 References 8Introduction Financial crisis has been one of the most debated and the discussed topics among all the spheres of professional and personal spectrum since early 2008. The melt down of the global economy has affected millions. Many of the executives with the top corporate organisations lost their source of livelihood as many of the Too – Big – To - Fail companies collapsed. The Effects of the Recession The entire economy of the world has been with in the grip of economic slowdown. The major economies like that of United States, Germany, Japan and other developed nations suffered the most. As with the boom in the information technology and the communication process, the one part of the world is coupled with the other parts, therefore as one economy started getting affected, the other parts were also affected. Still the most burnt was suffered by the developed nations. The reason of such meltdown can not be objectively specified rather it is a subjective issue. The housing bubble in the United States could be sourced as the base of the economic recession because of the subprime crisis. But also there were many other reasons that all contributed together towards such dismal performance of the economies like lesser regulations of the law, soaring crude oil prices, too much reliance on the financial reengineering in terms of complex derivatives by the leading investment bankers, among others. As the meltdown and the thereby recession affected the normal course of life in lieu of failure of leading banks and financial institutions, students were also affected in some form or the other. Among the entire fraternity of the students, that associated with the higher college or the university was the most affected. The Recession and a Student A student of today basically enrols himself to higher education with the aim to get a white collar job with any of the top corporate. But as the global melt down and the financial recession ultimately slowed down the global growth and made bankrupt some of the leading business houses which had been erect and tall more than hundred years, the objective of getting the desired job was all said but done. As the affects of the financial failure started to unearth since the December of 2007, the job cuts were in its high. In the February, 2008 more than 60, 000 jobs were estimated to cut which went up to 533,000 jobs in the single month of November, 2009 (Uchitelle, 2008). With such condition in the job market, it is definitely tough for the fresh graduate, out of the school, to stay on high hopes. The other important factor related with the higher education is that of the educational loan. The increasing cost of the education has compelled the students and their guardians to resort to the financial houses to sponsor the higher education. Amidst financial recession, the course fees of many of the reputed universities were expected to have a cut. But that has not been the case. The cost of higher education has increased considerably on year-to-year basis though the figures suggest that it has been lesser than what it had been five years back. The management of such colleges also claims that once the student aids are discounted, the cost of education is really cheap in the leading universities (Associated Press, 2009). As the cost of higher education has witnessed steady increase, the students took shelter under the educational loan. But because of the financial recession, most of the educational institutions failed to provide the desired jobs (both in terms of salary as well as designation) to the out going industry - ready professionals. Consequently, the lifestyles of the industry – ready but unemployed students affected. It further influenced the pay back of the loan that they took for their education. The figures ratified the fact as the default rate in the educational loan increased. Though the default rate in the educational loan was lesser than other forms of loans, but still it increased in terms of year-on-year comparison. Also, according to the trends, the rate of default should have decreased but that was not the case as it was 4.5 % in 2003 where as in 2008 it turned out to be 6.7 %. According to the figures of U. S. Department of Education, almost a quarter – million loan borrowers were into default among those who took loan in between September 30, 2007 to September 30, 2008 (Singletary, 2009). Even if the economic recession have almost crushed the hopes of a better future for most of the college students, yet contrary to the popular belief, the colleges and the universities have experienced higher number of applications for admissions. The reason for this has been the lesser opportunity cost of the higher education. If there would not have been the financial crisis and the job market striking towards the North Pole, many of the students would have opted for work as they could easily earn quick money along with relevant work experience. But as the markets slowed down and there was no much real chance of industry interface, students joined universities and colleges to utilise the time and attain higher degrees. This has resulted in increased application for admissions amidst recession (Paulsen & Smart). Conclusion The above arguments suggest that the financial recession has definitely affected the life of the college students by a major extent. The harsh reality not only crushed the high hopes of the young and the energetic aspirants but also made them face them the uncertain future with lots of financial liabilities over their shoulders. The conditions of the overseas students are worse than that of the American nationals as the overseas students have to bear much higher cost for the same education and also they have to take care of the living expenses in a foreign country. Though financial recession has been the driving factor for last couple of years, yet the recession would not stay for long, at least not for ever. The economy would revive again and so would the job market. The best of the talents would definitely be recognised by the industry. A college student of today must keep faith upon his abilities to succeed in future. References Associated Press, (2009 October 23). College tuition is up sharply amid recession. Sifybusiness. Retrieved 07 November, 2009 from http://sify.com/finance/college-tuition-is-up-sharply-amid-recession-news-business-jkuuE4fcgih.html Paulsen, M. B. & Smart, J. C., (2001). The finance of higher education: theory, research, policy, and practice. Algora Publishing, 2001. Singletary, M., 2009 September 20. After College, Student-Loan Sinkhole Awaits. The Washington Post. Uchitelle, 2008 December 5. U.S. Loses 533,000 Jobs in Biggest Drop Since 1974. Economy. The New York Times. Read More