Tuesday, September 4, 2012

For College-Bound Students, Is There an Upside to the (Economic) Downturn?

an adequate job of reminding us that the economic outlook seems like nothing but doom and gloom, mud-slinging presidential campaign ads certainly do. For anyone about to graduate from college and enter the job market, it's daunting. Those about to pay for college are no less fearful of their future, but in watching student's behavior over the last few years, I believe there may be some positive behavioral changes attributable to the faltering economy.

When times were good (monetarily), fewer students thought about the economic ramifications of the decisions they made regarding college selection and the accompanying price tag, but also the decisions that followed that affected employability and lifestyle. Talking to students about accumulating significant debt was previously like talking about monopoly money. Very few teens seemed to really wrap their minds around the impact that significant debt (credit card, educational, etc) would have on their lives. Often these students just wanted to pursue the degree from their institution of choice with little thought about price or the amount of debt it would take to fund this education.

Attitudes seem to be changing, however. Not only do news outlets uniformly deliver the same dismal economic message, but for many, the message is driven home in a much more personal way. When your friends and family who recently graduated from college cannot find adequate employment after months of trying, or your parents have faced layoffs or cuts in overtime hours, it brings the big economic picture into our homes in a way that shapes some difficult conversations.

I see, for example, students who are incredibly serious about going to medical school. Many of them, aware of the potential debt burden of 4 years of private undergraduate education and 4 years of medical school, talk much more significantly about foregoing the first four years at some prestigious, private institution for four years at an in-state public university because of the potential long-term impact on student debt load. (I am making the assumption that financial aid would not make public, in-state and private colleges the same price.)

Other students recognize that because of circumstances beyond their parents' control, paying for a high priced school may no longer be an option. For students who may qualify for financial aid, they often understand what it means to spread their risks. Reach schools and safety schools also have an economic meaning... ones you know you will be able to afford and ones that you hope you can afford but may or may not be able to. I work with a large population of upper middle class students. These families are largely college educated and make enough money so that they won't qualify for much financial aid, but they are by no means independently wealthy and the thought of writing a check for $50,000/year for a private college ranges from daunting to impossible, particularly when there are multiple college-bound kids in the same household.

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