Financial Crisis hits Students

When the Dow dropped another 700 points yesterday I joked with my friends that I was lucky because I was already poor so it really couldn't get much worse.

The truth is, despite the impoverished life of a post-grad blogger, even students who don't yet have to pay their loans back are having a hard time making ends meet, getting student loans, and even grants and scholarships.

The federal government pledged a $700 billion bailout to help Wall Street recover with the hope that normal American's would receive a trickle of what they get at the top. It is no surprise that Millennials are also feeling the effects of the financial crisis and that those effects will continue to also trickle down.

Federal loans will still remain available, thanks in part to the new democratic congress, but private loans might be dwindling despite million dollar endowments.

"Across the country, such a fiscal nightmare has caused some banks to impose stricter requirements for lending, which can have the effect of excluding more students from loans. Such loans could soon have higher interest rates, economists say." says the Daily Iowan

Larger institutions are the safest particularly in states with higher economies that can support their own institutions.

"When asked whether these new developments might force Yale to reconsider its new financial-aid policy, Storlazzi responded emphatically that "Yale has budgeted far into the future, and the University will have absolutely no difficulty in continuing to offer one of the most comprehensive financial-aid programs in the country," says the Yale Daily News

However, Inside Higher Ed reports that such large institutions are also more likely to lose money with investments, because

"the restrictions placed on the availability of money from the Common Fund for Short Term Investments (pdf), in which about 900 colleges store some of their financial assets. As of Wednesday, Commonfund, which manages the fund, had ensured that colleges would have access to about a third of their money (pdf), and relatively few institutions are so dependent on the money they have invested in the short-term fund that the restrictions on it will dramatically hurt them."

In these times of uncertainty it is essential we question our leaders and those seeking office of their plans to continue to support funding for youth who seek an education. Following the election it is even more essential we begin efforts to communicate those demands to policy makers.