With the future of the free market system in the United States still in limbo and a recovery plan that remains to be seen, anxiety is running high for students looking to finance a college education, many of whom are testing the job market.
Over the past few weeks it's been no secret how volatile Wall Street has been. Yet according to many news outlets, including the New York Times' coverage of the crisis, signs for failure trace back as far as 2002. Excess mortgages given out earlier in the decade have been defaulting more frequently and have been the primary cause for strain in the financial sector.
"The fall that happened is a restructuring of the whole system," said Colin Reilly, a University of New Hampshire senior economics and finance duel major. "I don't think we're going to see anything good in the coming months."
There certainly haven't been many positive signs recently, with the federal takeover of mortgage giants Fannie Mae and Freddie Mac, followed quickly by the Lehman Brothers investment bank filing for bankruptcy and Merrill Lynch being bought out by its largest competitor, Bank of America.
"It has been surprising as far as the magnitude of the whole thing," said professor Bruce Elmslie, Ph.D. and head of the economics department at the Whittemore School of Business and Economics. "Housing has been weak so it was bound to feed through different sectorsit's just been a matter of how much and when. We've got to shore up markets to ease investor fears so they don't pull out and the dollar doesn't fall."
With such large players reporting such large losses investors became worrisome and the Dow Jones Industrial Average dropped 4.4 percentover 500 pointsin one day. As investors continued to back out, American International Group, the world's largest insurance company, had to borrow $20 billion dollars from its subsidiaries in order to regain capital.
From there the Federal Reserve agreed to back A.I.G with $85 billion in aid, worried that if the insurance giant fell it would initiate a landslide in the troubled market, according to the New York Times. And now the financial market remains so unsteady that the only proposed resolution is increased regulation and $700 billion in capital aid from Washington, that was rejected in the U.S. House of Representatives Monday, sending consumer confidence even lower and plummeting the Dow Jones Industrial Average an additional 400 points.
For graduating students this crisis only adds to the anxiety of finding a career after graduation.
"It is going to affect the job market and as a finance major it will make it harder to mark yourself, so this does affect me because only the most qualified will get the jobs," said Reilly. "The only thing we can do is spend more time in the library."
This seems to be the trend for many, who are only now starting to feel out the job market.
"To be honest, I haven't ventured much into the job market," said Reilly. "In the next few weeks I'll be sending out more resumes than I would have been."
Since UNH is a publicly-funded university they are in a more enviable position than others, according to Director of Admissions Rob McGann. He said committing to a university is a huge decision and commitment for both the prospective student and their families alike. And since tuition at UNH rises annually and loans are becoming harder to come by thanks to foreclosures from some of the nation's largest lending companies, people have to look to new places to find the necessary funding for a college education.
"If the government allowed Fannie Mae and Freddie Mac to fall it would underwrite student loans and make it impossible for student loans," aid Elmslie.
Thanks to government intervention this should not be the case, though financing school is still a burden for many students and their families.
"Incomes have been flat and when everything else is becoming more expensive it is a huge challenge for families, feeling the continued financial effects with tightening credit it becomes more confusing," said McGann.
Though these struggles have most certainly been cause for concern for many students, UNH has seen its usual increase in applications remain constant at 6 to 10 percent. Financial aid has also remained steady with around 70 percent of students currently receiving some type of aid.
McGann said when there are dips in the economy, such as the current credit crunch, enrollment in community colleges tends to increase.
"It's on a personal basis, there are students who are struggling now not able to find aid and loans," said McGann. "We have to be thoughtful and clear about the benefits and commitments for students and their families, so that they are aware of the commitments we have here at the university."
For the majority of students, the calamity on Wall Street has been over their heads and students just assume things will rebound like they have in the past.
"I really don't know much, it sounds like the bailout is the only way," said Mitch Osbourne, a sophomore mechanical engineer major. "Because that's what they're saying on CNN, I feel like it will take a while to get it back on track."
The feeling of uncertainty doesn't end with the uninformed, even the most understanding admit that the future is still very unclear.
"This is a time for Congress to know more about the economy than they do," said Elmslie. "We're teetering on the edge, it could go either way."