What Might the Great Recession Tell Us About the Future of a student completing his education

The Great Recession impacted higher education institutions for a very long time. Most states had to reduce their funding for higher education during and following the recession due to fiscal problems. In response, many public universities increased tuition to compensate for the reduction of state budget income. For instance, at general doctorate institutions, education now accounts for 43% of total revenue, up from 40% in 2011–12 and 31% in 2006–07. Other categories of public entities had comparable patterns during the same time frame.

How to Prepare for a Recession?

2008 was undoubtedly one of the worst years for all new grads to qualify. In 2010, the Great Recession was just around the horizon, and several industries had already begun to show signs of collapse. Fresh grads were compelled to take just about any job they could find because most degrees were worthless.

For many recent grads, the impacts of the Great Recession persisted for more than two or three years. If anyone manages to catch up someday, it will likely require a lifetime for individuals who attended throughout those days to make up for a portion of their professional failures due to its extensive repercussions on the US economy and numerous other economies.

The recession curse on new graduates persisted in 2018, ten years after the Class of 2008 had graduated and the US economy was doing significantly better.

The starting pay for the Class of 2018 was only $50,000 per year, roughly equal to that of the Class of 2008. There has been no noticeable increase in starting pay.

Due to one or even more family members being unemployed due to the recession , their families cannot provide for them financially.

Great Financial Recession faced by graduates for several years; for some, it frequently turns out to be a life sentence due to the magnitude of student debts or their incapacity to make regular, large repayments.

Loans’ Long-Term effects

Following the financial collapse in 2008, one of those students, an automotive engineering bachelor’s degree holder, enrolled in a for-profit college to advance his skills and obtain a well-paying job. His story is told in a financial portal article. He borrowed money for college when he was 22 years old, completed an advanced degree, and subsequently found employment in the car sector. But he already knew a lot of the material taught. Therefore he was unable to start the career of his choosing. Thus, the cost of college was not worth it. He has a family now, but a sizable portion of his education loan is still due.

Higher Education Does Not Represent a Guarantee

Following the Great Recession of 2010, a wave of recent unemployed graduates enrolled in college to advance their education and increase their prospects of landing better-paying jobs. As public universities could not accommodate the high demand for admissions, college enrollment at for-profit institutions grew from 2.5 million in 2008 to three million in 2009, 3.5 million in 2010, and then 4 million in 2011. Furthermore, graduates from less-than-distinguished graduate programmes judged their degrees to be worthless. Even with a doctorate, they could not secure employment to begin paying off their enormous student loan debt.

Smaller College Endowments

College endowments suffer throughout a recession as well. Endowments fell by an average of 23% throughout the US Great Recession years, according to a survey of 800 public and private universities. Additionally, public schools experienced a 24 per cent decrease in endowments. The decline in endowments impacts scholarships and other forms of financial aid, as well as the availability and standard of programmes like research or liberal art forms and student services.

Lessons from the Great Recession and the Future of Student Education

An increasing number of individuals look to higher education as a path to a better, more stable profession during times of high unemployment. This trend was quite evident during the Great Recession, while unemployment was close to 10% and higher education enrolment increased quickly in more than 30 years.

Meanwhile, preliminary enrollment data for Fall 2020 indicates that several institutions’ enrollments were down from the prior year, particularly at community colleges. This is due to COVID-19, which is significantly more than just an economic disaster. Several people who want to finish their degrees must now deal with children going to school online from home and limitations on their alternatives for in-person learning or assistance. These considerations make plans for re-enrollment, at least temporarily, appear to be complicated.

The development of a vaccination ought to put social isolation on the verge of extinction. A vaccine, though, won’t protect us from the economic harm that COVID-19 has brought about. The Great Recession serves as our model for how a post-pandemic enrollment landscape would look, given a vaccine will be developed shortly.

Conclusion

Higher education enrollment is typically what economists refer to as counter-cyclical. Unemployment is high, while college attendance has minimal potential costs (such as lost wages) during the great recession. To further their training and education, numerous students go back to school. All areas of higher education saw an increase in enrolment during the Great Recession, with for-profit colleges seeing the biggest percentage gain. Since then, enrollment at four-year public and private nonprofit institutions has always been consistent while dropping at community colleges and other institutions.