KATHERINE ALLEN
Gargoyle assistant editor
Posted Thursday, Feb. 12, 2009

JUST A FEW weeks ago I didn’t quite know what "recession" meant. Now, we all know that we’re stuck in one.

We’ve been inundated with bad economic news since last fall. Every day we hear about layoffs, store closings, budget shortfalls, decline in home values and investment portfolios, furloughs, bankruptcy — the list goes on.

Recessions result in large-scale suffering. Many people have lost their jobs, and those who are working have less disposable income and little confidence in the economy. Consequently economic activity is slowing down, which in turn prolongs the recession.

Everybody seems to have a different strategy on how to tackle it and many find it hard to tell who is right. In fact, historians still disagree about how we got out of the Great Depression.

In recent weeks Democrats argued that the stimulus bill should be about spending to create jobs. The Republicans whined about wanting still more tax cuts. Wasn’t it their policies that got us into this mess in the first place? Besides, people would much rather have actual jobs than tax cuts.

This financial crisis is going to hurt Generation Y in many ways. It has already been said (before the fall — when the economic mess broke loose) that we are the first generation who will not be better off economically than our parents.

The current economic downturn only makes matters worse. In addition to not looking forward to the same standard of living as the previous generation, we will now literally have to pay the price for their apathy, greed and incompetence. The mounting federal debt will inevitably lead to high taxes and/or fewer social services in the future.

Nor are we eased into the new era of struggle. The recession already has a direct impact on our lives — at least for those students whose families aren’t wealthy.

Traditional sources of college funding are no longer as freely available as before the recession. We will have to deal with:

• much stiffer competition for financial assistance through loans and grants;
• declining home values that will make it more difficult to get a home equity loan;
• college savings accounts that have dropped in value;
• private lenders who are leaving the student loan market;
• scholarship programs, supported through trusts, that will inevitably be affected by the $94 billion loss in endowments colleges are suffering;
• the credit crisis that will drive college borrowing costs up.

On top of it all, colleges are increasing tuition. Again! The cost of a college degree has more than doubled in the past two decades, a far higher pace than the rate of inflation.

College-bound teens are facing the reality that they may have to pick a less expensive state school, rather than a private college or even an out-of-state school.

Naturally, that means state schools are going to become more competitive. When applying to a state college, it’s nowadays probably smart to factor in that grades and standardized scores need to be a bit higher than the school’s past average.

Another cost-effective option is to go to a two-year college before transferring to a four-year college in your state. Not all community colleges qualify you to transfer. Some universities don’t like the idea that students are trying to trade up to a more “prestigious bumper sticker.” However, a growing number of schools, such as Cornell, are establishing "guaranteed" transfer programs with selected community colleges.

Other students who want a decent education without an unreasonable price tag are heading to Canada, where a college education can cost nearly half of what it would cost in the United States.

Deferring enrollment for a year or more is another option. Maybe a recession is a good time to consider a gap year.

So what happens if we do get our loans and start amassing debt?

Well, we are faced with yet another reality. If we are to earn a living and pay off student loans once we graduate, we may have to select a different major than originally intended. Things to consider:

• How long will the recession last; will it still be a factor when I graduate?
• Should I pick a major that I’m really interested in, even if a job outlook is bleak at the moment?
• Should I pick a major in fields such as finance and information technology, which have the highest projected job growth, and then when the economy improves switch to a field I am more interested in?

I don't have answers to these questions, but I'm certain that one way to save college expenses is to know what you want to do. A recession is not the time to hang around college until you figure it out. Students who have realistic career and educational goals are more likely to stay in school and graduate on time. If you are uncertain, a career assessment may well be worth your while.

We are clearly not heading for a picnic, but I have no doubt that we will overcome this crisis. We have no choice. Nevertheless, I would have preferred to have another few years of a carefree life where school work and relationships were my only concerns. I had hoped to postpone getting stressed out about finances and job prospects. I did not envision working part time while studying. Suddenly it seems essential to get me through. That is if there are jobs to be had.

I am lucky that I will go to college. College affordability seems to have become an issue of accessibility. America is supposed to be a country where opportunity is available to all. I hope it is not slipping.