Issue date: 10/22/08 Section: News

Media Credit: David Puckett/MCT [Click to enlarge]

The international economic crisis has left many in dire straights. Whether individuals have lost homes, investments or confidence in the government, the crisis has had some impact on everyone, including students.

Melissa Cammack, senior biochemistry major, said her brother almost lost his home to the housing mortgage crisis. For her, the swollen gas prices have made it more difficult to get around. Now she uses the bus to get to school.

Anthony Gragg, junior liberal studies major, had to quit his job in Rocklin because of the high gas prices. Two of his parents' neighbors had to sell their homes to avoid foreclosure.

Kristen Van Gaasbeck, associate economics professor, said students are not impacted as much as some people, because few are homeowners. The economic woes affect students in other ways.

"Lenders have tightened credit standards," Van Gaasbeck said. "The crisis is spilling over into car loans and other forms of consumer credit, like credit cards."

For students, this means that they will not qualify for credit they may have been able to obtain only a year or two ago.

Van Gaasbeck said the tightened standards will especially impact lower income individuals and families, an economic class traditionally occupied by college students.

For now, student loans should be safe, as they typically have strict standards and require extensive documentation of income and housing.

"Student loans are credit given on a need-based system," Van Gaasbeck said. "They are different than car or home loans, because they are not backed by tangible assets."

For many students, the recent economic problems have led to changes in lifestyle. Many students are planning on staying in school longer because of the weak job market.

"Many students are realizing that if they graduate right now, there are no jobs," said Edidiong Uwan, co-advisor of Green Sting with Student Life and Services.

"More people are applying for graduate school because of it."

Ta-Chen Wang, assistant economics professor, said there is a counter-cyclical effect on student enrollment in regards to the economy.

"When things are good, graduate numbers drop," Wang said. "When things are bad, enrollment numbers skyrocket. I would expect to see more students enrolling all over the country."

"A slow economy could lead to less taxes brought in, meaning less money for the state, and that could lead to another hit to the CSU budget."

Derek Fleming can be reached at dfleming@statehornet.com

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