By Abigail Spaniol

The country’s economic situation is certainly not making college any easier for students. Experts constantly argue whether or not the U.S. is on the brink of a recession, but students are already feeling the effects of the downturn.

The cost of experience in a foreign country:

Studying abroad is a large aspect of college for many students at CSB/SJU. But how does it affect the money in students’ pockets?

With the recent state of the economy, a student’s dollar isn’t worth as much in other countries as it used to be. The CSB/SJU Office for Education Abroad has recently been formatting a new brochure and Web page to help students understand the costs of studying abroad.

The Office’s goal is to pay for the program they choose.

“This year has been especially challenging,” Education Abroad Advisor Peggy Retka said. Education Abroad Coordinator Sharon Schmitt has been in charge of figuring study abroad budgets for students for 30 years and believes traveling overseas will definitely cost students more in the ’08-’09 school year. This is because of exchange rates. For example, in Europe, a United States dollar is only worth .63 Euros.

However, the United States dollar is worth 1.05 in Australian dollars. South Africa, Chile, China and Guatemala are also more affordable.

“Money in the pocket has to be more now,” Retka said.

That includes paying for rising costs of fuel when flying.

Total costs for a semester abroad are more expensive than a semester here because of airfare, Retka said. But she believes the benefits of studying abroad far outweigh the costs.

“What you get out of it is well worth the added expense,” she said.

In addition, the program fee includes the added expenses for housing, transportation and group excursions. For other personal necessities, Retka says it’s up to the student to decide how they want to spend their money. For example, whether they choose to stay in a hostel or a five-star hotel in London could mean a difference of $180 a night.

“Travel as locals do, live as locals do,” Retka said.

Don’t stress about loans

Many lenders that students across the country look to for federal loans have “temporarily suspended” their services because of the College Cost Reduction and Access Act that Congress passed in 2007. This act caused subsidies (money the government pays lenders because their services are benefiting the public) to be reduced. As a
result, the lenders are only keeping their most reliable customers. Associate Professor of Economics Parker Wheatley said the primary cause of the decline in the availability of student loans is the current financial crisis.

This year, 2,498, or 63% of students at CSB/SJU used loans to pay for some of their college costs. These students borrowed approximately $27.5 million in loans. This past March, The Board of Trustees met to discuss if students are going to be receiving less money in loans because of the state of the subprime mortgage issue. “The impact on students will be minimal,” Stuart Perry, Director of Financial Aid at SJU said.

Twin Cities Federal (T.C.F), the most common bank from which students at CSB/SJU receive federal loans, has backed out. But there are other banks such as Wells Fargo, U.S. Bank and Citibank that become the new lenders for students that once used T.C.F. because they are all backed by the same non-profit corporation called Great Lakes Higher Education Corporation and Affiliates.

Students at CSB/SJU who use the MN SELF Loan program are also in good shape because the majority of their cosigners (parents or close relatives who help students pay off the loan while they are in school) have decent credit, Executive Director of Financial Aid at CSB/SJU Jane Haugen said. A cosigner is typically a parent or very close relative.

A small number of students at CSB/SJU use Private Loans. These types of loans also require a cosigner and the interest rate is determined by the cosigners credit. However, borrowers are not required to make immediate payments so students usually do not realize the amount of debt they are accumulating until after graduation.

Private lenders only recently experienced the effects of these loan repayments and as a result are planning to tighten credit standards on new private loans. Jane Haugen said that only about 200 students at CSB/SJU take out private loans and most of those students rank in the top half in terms of credit worthiness and should be able to continue borrowing.

In addition, the federal government is trying to meet the needs of college students with the greatest need. Congress is taking action to increase the availability of student loans with legislation proposed in April of 2008 in the form of the Emergency Student Loan Market Liquidity Act. This act tries to increase the availability of loans.

Economy Does Not Effect Success of Job Search for CSB/SJU Students:

Even with the state of the economy, the number of employers interested in CSB/SJU graduates has not gone down. “There’s always cycles (in the job market),” Associate Director of Career Services Mary Harlander-Locke said, “but strategies do not change.”

“Networking is always important,” Harlander-Locke said, “but networking is even more important in a tighter economy.”

Harlander-Locke said she is giving students looking for jobs the same tips she gives every year. Students interested in going into fields such as Advertising or Communication might need to use more strategy because employers won’t come straight to them, but Harlander-Locke says these students are usually still successful. A survey done on the CSB graduating class of 2007 found that there was a 97-98 percent situation, which means that almost all CSB graduates found either a job, volunteer position or went to Graduate School right after college. Harlander-Locke doesn’t expect this year’s percentage to be much different.

 

 

Filed under: News by Tan Tuohy