College Students May Be Sheltered From Down Economy, for Now

Regardless of how long the economy remains in crisis or whether or not this crisis becomes a recession, the effect on students will likely be minimal, at least in the short-term, says Fred Ruppel, economics professor at Eastern Kentucky University (“Student Body May Be Safe From Economic Crunch for Now,” The Eastern ProgressOnline, Nov. 6, 2008).

“Students should be well insulated,” Ruppel told The Eastern ProgressOnline, especially financially independent students who tend to finance their college education with student loans or rely on financial aid to pay for school. “The best place to be during a recession is in school.”

Ruppel points out, however, that students who rely heavily on their parents for financial support could be adversely affected by the downturn in the stock market, now that families’ portfolios may have taken a hit.

Jay Adkins, a sophomore at Eastern, still fears that the $700 million government bailout may be a sign that financing for education is in trouble. “If Freddie Mac and everything else is falling apart in the market, who knows if my student loans are going to be secure?”

Ruppel refutes Adkins’ concerns that the credit crisis will significantly impact student loans any time soon, but he says it may make getting a car loan more difficult for first-time buyers, which could be particularly problematic for students who rely on automobile transportation to get to school. “There’s less money for loans, with a lot more qualifications,” he said.

However, Ruppel does caution that the longer the economy falters, the more it will impact students and graduates. Whitnee Centers, a junior at Eastern, says while gas prices have declined, making her commute cheaper, less people are eating out, and, as a server, her tips are currently down 20 percent.

The economic crisis may have the greatest long-term impact on college graduates, Ruppel says. If the economy fails to create jobs, graduates may begin their professional career with bleak job prospects.

Adkins says, “If my parents know people who are getting laid off and are losing their jobs, who knows what jobs there will be available when I graduate?”