This story was written by Regina Zilbermints, The Daily Iowan
Regardless of whether American financial institutions bounce back from the recent crisis, University of Iowa students will likely see local effects.
"The bottom line is financial instability can affect any segment of the economy," UI economics Professor Gabriele Camera said.
The recent crisis in the U.S. economy and the subsequent $700 billion bailout could pose two severe ramifications for students: tighter loans, fewer opportunities in the job market.
Even with the House passing the bailout on Oct. 4, the U.S. stock market continues to suffer. The Dow Jones plummeted approximately 370 points Monday, ending the day below 10,000 for the first time since 2004. Both the S & P 500 and NASDAQ also endured large losses.
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.
But federal loans are still available - at least for now, said Catherine Wilcox, the senior associate director of the UI Office of Student Financial Aid.
It's a different story with private loans, she said.
If students "are trying to borrow their financial education, shoring up the financial markets will make sure they get the credit they need," UI economics Professor Beth Ingram said.
Next on the concern check board: How much will the job market really shrink?
It's a question UI junior Lindsay Darling and freshman Brandon Bowers are pondering.
"I'm concerned I'll be forced into the labor field," Darling said Monday.
"We're spending money that we don't have," Bowers said.
Camera said such concerns are well-founded, noting that the job market will likely slow down substantially.
Angi McKie, the marketing director of the UI Pomerantz Career Center, said it will take time before students feel the recession's effect.
"At this point, things seem to be at the same pace as last year," she said.
Since the recession began, American consumption has dropped 3 percent. Furthermore, businesses hit hard by the decrease can't borrow money, which could create a hiring freeze, some economists say.
In the government-financed sector smaller incomes may mean schools will have less money to hire teachers and cities may hire fewer police officers and firefighters.
Camera said some students, especially financial majors, may need to rethink their career paths and pursue degrees with more job opportunities.
McKie said the Career Center hasn't yet changed much to help students adjust to these fiscal straits.
But Ingram said there will always be a need for employees.
"This is pure speculation, but people will have to search more widely [for jobs]," she said. "Students won't be able to be as selective."
Such job market effects were present before the bailout passed, but Camera doubted the bill will rectify this.
"Even if the bill is nice and dandy, it takes time," he said.
Camera said some are wondering whether the U.S. financial system remains credible with the public - an issue that has not been resolved.
"We are in a financial crisis; the bailout does not prevent that," he said.