By Alisa Johnson
The global financial downturn has not wreaked havoc on just those of us who depend on a job or a business for a living; it’s also taken its toll on people who’re just out of school and looking to earn a degree so that they can cement their future with a career that pays well enough to lead a successful and comfortable life. College, which was already an expensive proposition because of high tuition fees, living expenses and other miscellaneous costs, is now a just a faint and distant spark in the horizon that seems an unachievable goal for students because of various reasons:
• Lower incomes and/or smaller savings: With parents out of a job or having had to accept lower salaries in order to keep their jobs, it’s tough on the kids who were looking to their mom and dad for help in paying for college. Lower incomes mean that families have to dip into their nest eggs (if they do have one) in order to be able to continue to meet living costs and day-to-day expenses. And this reduces the amount that’s left over for their children’s education.
• Higher interest rates: Private loans, which were the mainstay of most college education funding programs a year ago, are now hard to come by what with fewer lenders and stricter lending standards. And even if they are sanctioned, the interest rates are sky high and make repayment a definite problem. Parents were not worried about borrowing money to finance their kids’ education in earlier times because they were certain that their children would be able to repay them as soon as they started earning once they had earned their degrees. But now, with the job market looking bleaker than ever, borrowing to pay for a college education seems to be a stupid thing to do, especially when you don’t know how you’re going to repay the amount.
• Fewer scholarships: The grants and the endowments are drying up quicker than a puddle of water in the hot Sahara sun; with money being hard to come by, colleges are offering fewer scholarships than before, and this is hurting those students who are really talented and brilliant but who are too poor to afford a good college education. Endowment funds are losing in value because of the tumbling global markets and this makes it difficult even for prestigious institutions to keep going on as they used to.
All is not lost though – Obama’s administration is doing all it can to restore the flow of credit and bring government-sponsored student loan operations back to normal. Also, colleges are not going to want empty classrooms and dormitories if they’re to continue to keep normal operations going and paying their staff; so they will try to retain good students by offering them attractive financial packages. So you need to keep your options open and your dream alive and search for the best deals available, because an education is one thing that will prove to be invaluable once the economy revives.
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