“Has anybody been following the economy lately?” my government professor asked nonchalantly. Assuming we all lived under rocks, he continued, “The Dow’s down like seven thousand points. You guys are screwed.” Great.
Even as a freshman, I can’t help feeling anxious about hunting for jobs after I graduate. Last April during my GAAP weekend, all I seemed to hear from seniors was how easy it is to find internships, and how they all had great jobs lined up for after graduation. My pre-frosh mind spun with the dazzling possibility that in four short years, I could have my own apartment, a good job, and a salary of more than 70 Gs a year. It almost seemed too good to be true.
And it was. Well, at least for now. Internships in finance and banking are few and far between this summer—and I have the luxury of being in the business school. Of course, the situation is a whole lot worse for this year’s seniors, but even for those still in school, the economic slowdown may still prove problematic.
Sallie Mae, the largest provider of student loans in the nation, recently announced that it would soon require those taking out loans to make interest payments throughout the full duration of the loan—including while the borrower is still in school. This makes a lot of sense for the company, which needs to beef up its now dribbling cash flow in order to continue making more loans.
With this new requirement, Sallie Mae also hopes to weed out the riskiest borrowers by eliminating those families on the fringe of qualifying for financial aid who are the most likely to default. Students, on the other hand, seem to be getting the short end of the stick: despite shrinking the amount of debt students would carry after graduation, it doesn’t make life any easier for them while they’re still in school.
In fact, these changes could not only place significant financial burdens on students still in school but could also hurt our economy in the long term, as the prohibitively high cost of attending expensive universities will prevent students who could contribute to making America’s workforce more globally competitive from attending our best schools.
Even beyond producing such practical impediments to receiving a competitive, high-quality education, it’s possible that this economic crisis could do a number on our youths’ self-esteem.
There’s a theory that young people strive for less during economic recessions and depressions. The years of the Great Depression produced zero U.S. presidents (sorry John McCain), but 12 chiefs-of-staff. Does this mean that our generation’s youth won’t dream as big as they should? For me, that’s perhaps the most depressing thing about this whole sort-of depression. The realignment of grandiose ambitions to account for economic reality is a rather hard pill to swallow.
So let me end on a positive note. As Georgetown students, we are gaining skills that will make us highly competitive in the workforce. The people most hurt in the long term are workers with skills that are rapidly becoming obsolete, like unionized autoworkers, or workers without highly market-valued skills, like manual laborers.
The bottom line, then, is that things are not as bad as they seem. Relatively, Georgetown students will probably end up better off than our counterparts who lack a as high a quality of education. There’s even some good news on the loan front. Higher inflation will inevitably follow the government’s trillion dollar-plus bailout, which means it will be easier to pay off student loans, even if we end up having to do it while we’re in grad school. Maybe we won’t end up as investment bankers or mortgage traders, but we’ll be able to land respectable jobs nonetheless.
And, as always, the Beatles provide extra psychological comfort: as hard as you try, money can’t buy you love.
