[161]FORECASTER: ‘SAVINGS IS CRITICAL!’ TO ENDURE ECONOMIC WOES

FORECASTER: ‘SAVINGS IS CRITICAL!’ TO ENDURE ECONOMIC WOES
Students Can Expect Tuition Costs to Continue to Rise, Ratajczak Says

FOR IMMEDIATE RELEASE: Oct. 15, 2008
EDITORIAL CONTACT: Tom Tozer or Gina E. Fann, 615-898-2919

(MURFREESBORO)— As the financial crisis worsens, college students are finding it more difficult to see the light at the end of the tunnel and, instead, are seeing a train rushing toward them. At MTSU’s 16th annual Economic Outlook Conference at the Embassy Suites in Murfreesboro on Friday, Sept. 26, speakers provided a window into the upcoming year in U.S. economics and finance.
The good news: the situation isn’t as bad as students think it is; the bad news is that the current severe financial crisis will affect student loans, tuition and finding jobs, both during college and after graduation.
Dr. Donald Ratajczak, Regent’s Professor of Economics Emeritus at Georgia State University, founder of the Economic Forecasting Center and one of the nation’s leading economic forecasters, says student-loan companies could face the same problems as troubled mortgage lenders Freddie Mac and Fannie Mae.
According to Ratajczak, it is becoming harder for banks to find student-loan guarantees and, as a result, they’re backing away from student loans and making it harder for students to acquire them.
And, he warned, don’t think that just because a lending company goes down, you’d become free of any obligation to your student loans. Those loans, like home mortgage, auto and other personal notes, will be transferred to whomever takes over the lending company, so you don’t get a bail-out.
When it comes to tuition, forecasters have more bad news: costs likely will never come down, regardless of the state of the economy.
“The cost of education has been growing 3 percent faster per year than core inflation,” says Ratajczak. “If colleges and universities refuse to use cost-cutting innovations, tuition costs will continue to rise.”
Students, just like other consumers, still can take certain measures to provide themselves with some financial security. The most important task is to include savings as a part of a basic budget, along with rent and food, Ratajczak says.
“Savings is critical!” he emphasizes, advising that consumers immediately put a portion of each paycheck into a readily available account. Once you’ve set aside six months’ worth of income, Ratajczak recommends opening a ROTH Individual Retirement Account, or IRA. But before putting money into a ROTH IRA, he cautions, you must pay your taxes.
Another smart thing to do now is to invest. According to Ratajczak, investment opportunities are good now because stock prices are low.
“These cycles happen,” he explains. “It’s not as damaging and critical as students think. It happens and it will go away. Don’t sit and wait for this to end. Do what you can in this environment.”
When asked what students can do to help the economy, Ratajczak is quick to answer.
“Study hard. Increase your human capital, and then, when the economy improves, find the best way to use it. If students can do those three things (save, invest and study), then the long run of this economy is assured. That’s how we get our future.”

For MTSU news and information anytime, visit www.mtsunews.com.


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ATTENTION, MEDIA: For a color JPEG of Dr. Ratajczak, please contact Gina E. Fann in the Office of News and Public Affairs via e-mail at gfann@mtsu.edu or by calling 615-898-5385.

If you use this article in its entirety, we ask that you credit Elizabeth McAmis, a senior majoring in advertising/public relations.

Thanks!
For MTSU news and information, visit www.mtsunews.com.


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