How does the recession help college students?
One particular element of higher education is that it goes in the opposing direction of the economy. When the economy falters, demand for education soars as the jobless opt to return to school to boost their career chances.
Since the coronavirus epidemic looks to be producing a new recession, it would be helpful to study what transpired in schools and colleges during the great recession of 2008 to assist us in comprehending what may and might not happen this time.
What Were the Primary Economic Flaws that Contributed to the Great Recession?
First, the housing market, a substantial economic activity source, was seriously affected. Second, financial channels were interrupted, credit markets were blocked, and many firms lost funding and were caught off guard.
Economic recovery has been challenging because each great financial crisis does have a wide-ranging effect that extends to other areas of the economy. The fundamental causes of weakness-mortgage lending & housing and the financial industry-housing were also problematic because their intricate affairs made a rapid return to balance impossible.
Great Recession Can Safeguard College Students
Budget cuts for public services are predicted in the future owing to the economic damage of COVID-19. This indicates state support for public universities may undoubtedly be reduced—leading to limits in access and falling enrollments. California faced a similar situation during the Great recession, with several students selecting for-profit universities instead of public schools.
Although some learners at for-profit universities obtained a degree, many didn’t graduate & wound up with enormous debt. Central and provincial governments ultimately placed limits around for-profit schools, but impending amendments at the national level might weaken the federal requirements.
The newly announced education Consolidation Fund would preferentially distribute emergency relief cash to private for-profit universities. lIn California, just 5 per cent of the state learners, attend for-profit universities, yet these institutions will get 10% of federal support.
In contrast, 55 per cent of students enrolled the state’s community institutions, which will earn just 34 per cent of federal money. That is because many low-income students who attend community college depend on state assistance rather than federal aid: these people are not considered in the national emergency funding calculation.
Did people Foresee Another Economic Failure to Approach or Surpass the 2008 Crash?
During their term as the first chairman of the Consumer Financial Protection Bureau (2012-2017), individuals usually referred to the Great Recession as the most severe economic calamity of the century. People anticipated it would stay thus for at least another or two generations. After all, it has been 65 years of age since the Great Depression, since cataclysms are infrequent. However, 12 years later, the economy crumbled.
What are the Quantitative Differences?
The Gross Domestic Product (GDP) decreased by an annual pace of 32% in the 2nd period of this year, on top of a 5% loss in the first quarter, nearly wholly owing to the state-wide suspension of economic activity in the final two weeks of the first quarter. In comparison, GDP plunged by 7.2 per cent in the fourth quarter of the most recent recession, showing the unmatched severity of the present economic calamity.
Indeed, the numbers impacted grew so huge that they flooded standard data gathering procedures, such as unemployment benefit approval processes and the regular use of representing the frequency, rendering analysis difficult. Experts are split on what the economic resurgence will look like.
A U-shaped recovery, a V-shaped recovery, or a W-shaped recovery are the three alternatives. Given the difficulties of keeping the epidemic under control, humanity would not return to the whole light immediately soon.
Instead, The circumstance is like flipping a switch with a recently applied dimmer control. The course of that significant variable-the pandemic’s effects-remains unclear, and it is the single most significant question mark for the time being.
Are There Any Takeaways, at least in the Short Term?
People thought omitting a blaming narrative was essential, particularly regarding the economic effect. The pandemic’s unique historical character widens the possibilities for change and opens up new areas and ideas for genuine consideration previously kept out of the gridlocked system.
For instance, measures like a universal basic income or even other planned changes that were radical two years ago may no longer seem so far-fetched. They may be tenable, based on the political circumstances after the election.
Most Significant Consequences of the Great Recession for Higher Education Institutions
- The Great Recession severely impacted higher education institutions. Most states had to slash higher education appropriations during and after the recession due to financial problems. As a result, several public universities increased tuition to compensate for the loss of money from state appropriations.
- Enrollment in higher education institutions is typically counter-cyclical, according to economists.
- Jobs are scarce during economic downturns, and the opportunity costs of attending college (such as foregone earnings) are minimal.
- Many students return to school to further their education and training.
- Enrollment climbed in all higher education sectors during the Big Recession, with for-profit colleges enjoying the most significant percentage gain. Enrolment at community colleges and universities has decreased, but enrollment in public and private non-profit four companies has remained stable.
The global recession presents an opportunity to go ahead with crucial changes. As the region’s knowledge production & transfer networks become as linked as its economy, a highly collaborative layering of universities and colleges might develop. High quality, worldwide recognition, & global competitiveness are promoted. Governments and multinational businesses may aid in finding a succession of regional centres that excel in critical qualities of higher education and the capacity to satisfy the expectations from around the area. However, it is also vital to plan for future Asia-wide events. Stay tuned to 21K School – World Campus for further details.
21K School World
Read our latest education blogs here. We are pioneers in proffering personalised, affordable and high-quality lessons using an advanced learning platform.
Join Asia’s Leading Online School and Unlock
Leading Online School
and Unlock endless opportunities
You may also want to read
When Should I Start the College Admissions Process?University Admissions
21K School · Mar 29, 2023 · 2 min read