The Recession to a Student with Student Loans
There is no doubt that the recession that we are in now is one of the worst that we have seen recently. Some have even called it a modern depression rather than a normal recession. The federal government has pumped in so much money to stabilize the downward spiral that it would seem they might bankrupt the country just to keep things afloat. It thus isn’t unexpected that people would be worried about that the future has in store for them. Students with government or private student loans are also worried about their prospects of continuing their education in-light of the recession. Of all the groups that should be worried about the recession we believe that students have the least to worry about.
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.
Participants in other industries might not be so lucky as students when it comes to their fortunes during this recession. Construction companies, mortgage providers or even other loan portals will find that the recession is quite bad for them. Construction companies will have next to no access to funds as banks will most probably turn down their application the same way that any company dealing with loans of mortgages will also be shut down. You will see small mortgage providers going out of business and many construction projects put on hold.
Students that are currently pursuing their education using their government or private student loans have very little to worry about. The rates are more or less fixed and it is extremely unlikely that anything bad would happen to their source of education funding. It isn’t unlikely that some state education loans might have gone up in price but the difference between the rates now and the pre-recession period is quite minimal. In addition to the slightly higher costs of loan there is also the problem with those in college that need jobs to get by. The job market has become deteriorated significantly and student will find it much harder to get jobs.
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.
