How Students Should Feel About the Recession
The current recession that we are experiencing is one of the worst in our recorded history. If it wasn’t for the federal government pumping in bucket loads of cold hard cash to prop things up, we would have crashed our economy with unthinkable consequences. With so many media organizations lambasting us with this information it isn’t unexpected that people start to worry. Amongst the group of people who don’t know what to think about their future are students who are funding their education with either government or private student loans. In short, if you are currently a student then the recession really doesn’t pose any danger to you.
The federal government has realized that of all the loans that have to be protected and given certain priority, student loans rank very high. After all, cutting the education loans budget would be akin to you cutting your children’s education just to save a few pennies. It is a terrible move with devastating knock on effects for the general population in the future. The education level of the general public will decrease substantially making the country less competitive and may even cause a greater recession than the one that we are already in.
If you actually look at the rest of the industries you will find that the education industry and its associated private student loans sector hasn’t really been affected quite as badly as other industries. The worst affected industries are the construction industry and the mortgage loan sectors. Just look around and you will see that any construction project will most probably be put on hold because of the freeze in capital flow. The mortgage lending sector is also similarly affected. Small over-the-counter mortgage companies are closing doors left right and center because of the lack of business and very tight funding options.
Although those with existing student loans private or otherwise have very little to worry about those that are starting their college years and looking for student loans may find things trickier. The first thing most would notice is that private student loan rates have increased slightly compared to pre-recession periods. For those who are servicing their loans it might be harder for them too because jobs are harder to come-by and some may even have the bad fortune of being laid-off. If however you are in school, there is nothing to worry about.
A brief study into the group of people that are affected most by the recession saw current students rank very lowly. This means that life basically goes on for them quite normally. The group that is most affected by the recession are the elderly, retired and seniors. Their health and wellbeing wouldn’t be affected but the fact is that most of them bought multiple houses during the real estate boom time and their investments would most probably have halved in value since. This means that they have taken the biggest hit financially.
If however you look at the long-run health of students in the recession you’d see that students might actually see a benefit. The first and most obvious is in terms of their rental. Most students would rent their places and because of the tumble in real estate prices they should see a reduction in the rent. A long term recession would also see a general reduction in prices of necessity goods/services meaning that their fixed expenditure would be reduced. Students would be able to buy more with the same amount of money.
Overall, we are in the view that students shouldn’t be too worried about themselves in view of this recession. They aren’t exposed too much of the downside of the recession however are well placed to benefit from the upsides that the recession brings. Sit back and relax while you get an education, worry about the recession when you are out looking for a job.
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