Editorials and Opinions

Wall Street meets Brandeis Road

By Rebecca Goldstein
Published: October 2008

“I think we learned an essential truth that in the long run we can’t have a thriving Wall Street if we don’t have a thriving Main Street, Barack Obama said in July.

Record losses in the stock market and troublingly high unemployment figures indicate that neither Wall Street nor the proverbial “Main Street are thriving. But what does Wall Street have to do with Center Street, Beacon Street, and especially Brandeis Road?

Before we even get to the wider consequences of this crisis, the worst we’ve seen since the Great Depression, I have two words for the more self-centered: student loans.

The current crisis has worsened the so called “credit crunch that began in force last winter. That means that banks are reluctant to lend money for homes, businesses, and for education.

Federal loans will be available at pre-crisis levels through the 2009-2010 academic year, but the worsening economy will increase demand for expensive and risky private loans. And for all you underclassmen, there are no guarantees about federal loan interest rates beyond next year.

Applications for financial aid are up 16 percent nationally from last fall, and 10 percent more Northeastern University students have applied for midyear aid than last year.

As tuition increases and loans get more expensive, more and more of us will face the prospect of leaving college with as much as $100,000 in debt.

If that doesn’t get you caring about the worsening economy, picture this: less spending money from your parents. Slimmer chance of getting a car once you get your license. Maybe there won’t be enough money for expensive SAT tutors, application fees, or college visits.

Consider too the $1 billion Governor Patrick is cutting from the state budget because of falling tax revenues. Public school is a government project, and less state money means fewer teachers, larger classes, and fewer supplies.

And besides the economic concerns that affect South students directly, this nation and the world are changing all around us, and we need to take notice.

Nationally, Congress could well end up spending $1 trillion trying to stimulate the economy and dampen the effects of the meltdown. Depending on which analyst you consult, this is either a crucial intervention or a futile effort that will needlessly swell our burgeoning national debt.

Globally, world leaders, including President Bush, are working on a retooling of the global financial system that will change the way this country engages in trade, investment, and banking.

We could very well end up with a highly regulated, European-style system that will either stifle business beyond the point of what’s reasonable, or prevent a future crisis – depending on whom you talk to.

What we know for sure is that the face of business and finance will be drastically different five years from now than it was five years ago, and the guarantees about the future we thought we had as students in a prestigious public school no longer exist.

As much as we’d like to believe otherwise, Wall Street, Main Street, and Brandeis Road are inexplicably tied.

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