Student body may be safe from economic crunch for now
Walter Lesczynski
Issue date: 11/6/08 Section: News
Headlines have painted a bleak economic portrait of the nation and the Commonwealth, leaving students concerned about how it will impact their wallets.
With a substantial increase in tuition, the largest stock market plunge since the depression, and record foreclosures, the country may not officially be in recession, but experts say it's coming.
"We don't know how long it will last or how hard it will hit," said Fred Ruppel, a professor in the economics department at Eastern.
But Ruppel said the effect on students should be minimal in the short term.
"Students should be well insulated," he said. "The best place to be during a recession is in school." But Ruppel also warned that the longer the economy flounders, the more students would feel its effects.
Students are seeing both the benefits and negative effects of a slowing economy.
Whitnee Centers, a junior from Berea, said lower gas prices are making her commute cheaper, but at the same time she's not making as much money waiting tables.
"Less people are eating out these days," she said. "My tips are down 20 percent or more."
Students who rely on parents for finances could suffer when their parents are affected, Ruppel said. But the campus population that could be hit the worst is professors who are close to retirement. Ruppel said pension plans have lost significant value this year, depreciating as much as 40 percent. "They've just tanked," he said.
And while students may be safe and cozy in the short term, after graduation could be another story if the economy isn't creating jobs, Ruppel said.
"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?" said Jay Adkins, a sophomore from Richmond. He said the bailout and other factors could be signs that financing for education could be in jeopardy.
"If Freddie Mac and everything else is falling apart in the market, who knows if my student loans are going to be secure?" he said.
Ruppel said the credit crisis should not affect student loans, but car loans might be harder to come by for first-time buyers.
"There's less money for loans, with a lot more qualifications," he said.
Ruppel said a lot of students are stuck in a vicious cycle: they need to work to pay for their car, and they need their car to go to work. He advised students to put off buying a new car, or any other non-essential items, until after graduation.
"Put off major purchases for a while," Ruppel said. "Students, by nature, can and should get by with a lot less."
With a substantial increase in tuition, the largest stock market plunge since the depression, and record foreclosures, the country may not officially be in recession, but experts say it's coming.
"We don't know how long it will last or how hard it will hit," said Fred Ruppel, a professor in the economics department at Eastern.
But Ruppel said the effect on students should be minimal in the short term.
"Students should be well insulated," he said. "The best place to be during a recession is in school." But Ruppel also warned that the longer the economy flounders, the more students would feel its effects.
Students are seeing both the benefits and negative effects of a slowing economy.
Whitnee Centers, a junior from Berea, said lower gas prices are making her commute cheaper, but at the same time she's not making as much money waiting tables.
"Less people are eating out these days," she said. "My tips are down 20 percent or more."
Students who rely on parents for finances could suffer when their parents are affected, Ruppel said. But the campus population that could be hit the worst is professors who are close to retirement. Ruppel said pension plans have lost significant value this year, depreciating as much as 40 percent. "They've just tanked," he said.
And while students may be safe and cozy in the short term, after graduation could be another story if the economy isn't creating jobs, Ruppel said.
"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?" said Jay Adkins, a sophomore from Richmond. He said the bailout and other factors could be signs that financing for education could be in jeopardy.
"If Freddie Mac and everything else is falling apart in the market, who knows if my student loans are going to be secure?" he said.
Ruppel said the credit crisis should not affect student loans, but car loans might be harder to come by for first-time buyers.
"There's less money for loans, with a lot more qualifications," he said.
Ruppel said a lot of students are stuck in a vicious cycle: they need to work to pay for their car, and they need their car to go to work. He advised students to put off buying a new car, or any other non-essential items, until after graduation.
"Put off major purchases for a while," Ruppel said. "Students, by nature, can and should get by with a lot less."
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