Savings vital for students during economic crisis

It may not be the habit of many students — other than the finance majors — to closely follow the daily financial teeter-totter occurring on Wall Street. But over the past few weeks, as the stock market has taken a dramatic hit and financial rescue plans have filled every media outlet, everyone’s attention has been refocused on the country’s uncertain financial situation.

The biggest question out of everyone is both practical and justified: how will I be affected? For students, the ones who don’t read the news or don’t think they will be bothered included, the current crisis plaguing the housing, credit and stock markets will be tapping on their wallets sooner — and for longer — than they might think.

With government-induced budget cuts, goals to become a top-20 research institution, and now a countrywide economic scare, the cost of tuition is on the rise. Students are seeing an increase in costs combined with a decrease in scholarship money and job earnings, said Joe Peek, a finance professor and the Gatton endowed chair in International Banking and Financial Economics at UK, in a Sept. 30 Kernel article.

The answer for these students: apply for financial aid. But this creates its own problem. Increasing applications for financial aid paired with decreasing availability of private student loan rates means it is completely realistic that students will find it harder to get money for college.

UK received 11 percent more financial aid applications for the 2008-09 school year than the previous year, the Kernel reported. While it is unlikely for federal funding to be effected too much by the financial crisis, other student aid is already suffering because of high credit and high interest rates.

But it isn’t just the cost of college that will be plaguing young Americans. Increases in the cost of food will be seen in restaurants, bars, grocery stores and convenience stores. Add on the uncertain cost of gasoline, something every student lives in constant fear of, and the crack down on credit payments and day to day living will see its stresses.

The solution? Unfortunately for students, everyone will feel the effects but not everyone will be able to directly impact the solution efforts. Big Wall Street investors, financial firms and money markets in partnership with the government will ultimately have to make efforts to dig the U.S. out of this situation. But the average American citizen can do their part to aid the free market by continuing to put money in the economy and protect themselves.

Students should be prepared — there will be no better way to survive the financial crisis. Get a job and start to save now. College costs and prices of food and gas will continue to increase, so savings will be imperative.

This won’t be over tomorrow and everything won’t be solved with the swearing in of a new president. Students need to be prepared for the long haul.