(U-WIRE) NORMAN, Okla. – A shaky economy may make it difficult for students to find jobs and pay off loans after graduation, but one option for graduates is more promising: Graduate school.
Bette Scott, OU Career Services director, said during her time at Career Services, she has seen economic recession cause graduating students to become more interested in continuing their education rather than entering an uncertain job market.
“Generally, what will happen when the job market slows down is that more students will look at going on to grad school,” Scott said. “During good job markets like we’ve been in, grad school applications are down.”
A recession is a decrease in gross domestic product for two straight quarters. Though that isn’t the current situation, early indicators, such as a .4 percent rise in national unemployment to 5 percent and a failing stock market, tell economists a recession could occur.
During the last recession between 2001 and 2003, graduate school applications across the nation were up, according to University of Washington researchers.
Students beginning graduate school in the natural sciences and engineering fields increased by 31 percent from before the recession in 1998.
“The high-tech economy siphoned people away from graduate school, and when the bubble burst, that temporarily turned things around,” William Zumeta, a University of Washington professor who did the research, said in his published findings from 2004.
Another indicator the researchers found was the number of people who took the Graduate Record Exam increased 9 percent, suggesting more people were preparing for varied programs.
If graduate school is not an option for students, Scott said students should be prepared to look outside their comfort zone when searching for a job.
“Students will be more willing to look at jobs they haven’t looked at previously,” he said. “In that kind of job market, you take whatever is available.”
Scott said she is not seeing employment numbers wavering despite recent reports of a looming recession flood the media.
“We are not yet seeing that in our office in terms of hiring new college graduates,” he said. “As a matter of fact, we are looking at a record number of employers wanting to come to the career fair.” Still, Oklahoma’s unemployment rose from 4 percent in 2006 to 4.5 percent in December 2007.
Scott said Oklahoma’s geographical location helps when economic trouble hits.
“In the past, it’s always been worst on the east and west coast[s] before it hits here.”
The office can adjust when the signs of recession are prominent on the coasts.
Scott said, though her office may not see an unemployment crunch now, the situation could be different tomorrow.
“We’ve seen it before change overnight,” Scott said.
Kevin Bruns, American Student Loan Providers executive director, said the trend also is in the student loan market.
“The traditional pattern is going back to school during a recession,” he said.
Bruns said federal loans are simply not enough to cover the cost because of the rises in tuition across the board.
Also, Bruns said students are taking out more private loans to cover the rising costs federal loans do not cover.
“Some students rely on private loans to make up the difference,” he said.
A problem that comes with high unemployment rates is paying off student loans, especially during a downswing in the economy.
“Impact is the greatest, and will be felt in the most, in the private loan market,” Bruns said. “Some students will find it difficult to find loans they can afford.”
Bruns said students should not be afraid of creditors if they run into trouble during an economic downturn.
“Most financial people would say if you have student loans and you get into some financial trouble, go to the lender and explain your situation immediately,” Bruns said. “Most lenders want to keep loans on good terms.”