How Wall Street Woes Impact You!
You're getting back to the books and may be buried in the fervor of a fresh semester. But when you come up for air, you're likely to find that Wall Street's woes extend to campus corridors. How so? Here's how and what you can do to survive what may be a rough ride.
Expect a money drought
"With Congress passing a bailout bill, it's going to be tough for students. That money is going elsewhere, not to things like education," says Daniel Wansten, author of Cash for College and president of Professional Education Services in Grand Rapids, Mich.
Simply put, money could get scarce. Already the economic fallout has led to a tightening of credit rules, making it more challenging to get a loan to buy a house or car, according to Steve Rogers, the Gordon and Llura Gund Family distinguished professor of entrepreneurship at Northwestern University. Student loans could be hard hit next. The student loan market has been going through severe turmoil recently, with many private lenders exiting the market until credit markets improve. This means that the remaining private lenders may offer higher rates and less favorable terms than before, which will end up costing students and parents significantly more to borrow funds for college, predicts Chris Long, president and COO of college websites, MeritAid.com and Cappex.com.
There may be more diligence in underwriting and funding of any loans, grants or scholarships, says Mickey Matthews, vice president, North America, of global search firm Stanton Chase. "There will likely be repercussions to the student loan side, even possibly from the misgivings at Freddie Mac and Fannie Mae, as these pseudo government agencies and their policies and governance will come under more scrutiny," he adds.
So what do you do? Long offers this advice. "If you do need to take out a loan, make sure you take advantage of federal loan programs first and compare private loans carefully. Always understand exactly what you are signing up for." Check out the U.S. Department of Education's site, http://www.studentaid.ed.gov/.
"There will likely be repercussions to the student loan side, even possibly from the misgivings at Freddie Mac and Fannie Mae, as these pseudo government agencies and their policies and governance will come under more scrutiny."
-Mickey Matthews, Vice President, North America, Stanton Chase Explore grants
With loans tougher to obtain, more students will be on the hunt for grants. However, grant funds that are based on tax receipts may be reduced as well. Therefore, fewer dollars will be available, says Long.
How can you best the competition for that grant money? Start early. File the Free Application for Student Aid (FAFSA) as soon after January 1 as possible. Do thorough research to find all available grant opportunities, he adds.
Stalk scholarships
Institutions that are not sitting on substantial endowments will be forced to cut their costs and scholarships will lessen, says Kimberly King-Jupiter, associate dean of the Lewis University College of Education in Romeoville, IL. Across the country there have already been budget cuts at public universities. Public institutions overwhelmingly rely on private donors to fill funding gaps. Now, says King-Jupiter, "Schools may find less of a willingness on the part of donors to give because they have less disposable income."
"A lot of scholarship money is never taken. It's sitting there. Be willing to write the essay and seek help doing it if you need to. Be mindful about how you position yourself. It's not just your grades that count, extracurricular activities do too. Put more thought into the process."
- Daniel Wansten, author of Cash for College and president of Professional Education Services
Students like Nekesa Smith, a 34-year-old sophomore at Spelman College says the financial issue has not escaped students' radar. "With financial institutions in trouble it's hard to trust getting into financial contracts. We're concerned about future funding. More students are looking for scholarships to get through school."
Fight back. "A lot of scholarship money is never taken. It's sitting there. Be willing to write the essay and seek help doing it if you need to. Be mindful about how you position yourself. It's not just your grades that count, extracurricular activities do too. Put more thought into the process," says Wansten.
What's another smart strategy? Look beyond private and foundation sources. "Merit-based scholarships are typically higher amounts, are awarded to more students, and are renewable year after year, compared to the usual one-time award from a private scholarship source," points out Long.
"There are significant merit aid opportunities for African-American students as schools are trying hard to diversity their student body and will award substantial scholarships to attract minority students," says Long. It's not only the 4.0 GPA-crowd that can rake in the dough. A range of GPAs, athletic involvement, artistic talent and other factors can put you in the running. For the low down on merit scholarships go to MeritAid.com
Be flexible with career choices
Those three or four years away from searching could face a much brighter job market. But, it could be more than a bit challenging to snag a plum job if you're graduating soon. What's key? "Consider those industries and positions that are more recession proof when you look for jobs. Health care and life science industries still seem to be some of the least affected sectors and stable places to gain employment," says Matthews.
Change your attitude. "Initial, entry-level jobs that you will be offered might not be exactly what you had in mind, but be flexible. If you can get in with a good company, that's more important. Then prove yourself. Better to be on the inside than on the outside looking in," he adds.
Stay positive
The most important thing to keep in mind while going through the turbulence - don't quit and don't despair. Says Long, "The most successful people in life turn adversity into opportunity - and profit."
Here are a few resources that may be helpful to you:
