Just How Bad is the Job Market for the Class of '09

Yeah, everyone knows job losses have been downright ugly for some time now. But, what about all those new college grads being churned out this year. Sure some positions may have a fairly positive outlook, but far less have a red-hot demand as in years past. Tech is beat up, hospitals are laying off people, finance is all kinds of bad --- at least education and government are still hiring.

This is bad news for everyone, but if you are penny less and have some fresh student loans to pay off, things can be even more daunting. Gone are the good old days when parents could finance their kid's education or when students could make enough over the summer to pay most of their tuition. Enter the new reality, student loans and a world where a college degree is a bare minimum.

The WSJ is reporting that people who graduate in a recession end up making less over their entire careers, not just in that first job. Apparently employers are saying that they will hire 22% fewer college grads this year. That is especially bad news for all the history, english and philosophy majors entering the workforce this year. Read the whole story at WSJ.

Image Credit: quinn.anya @ Flickr

The Student Loan Abyss

We've heard the stories about how bad the topsy-turvey student loan market has gotten for consumers, but I recently was able to witness things first hand. In an attempt to consolidate a couple private student loans to make things more convenient, I was only able to find two lenders still offering private consolidation loans (Citi and Key). To make matters worse, the lenders wanted approximately 8% and near 9% respectively for an applicant with excellent credit. The game plan now has moved to not consolidating and paying private loans off as quickly as possible.

Does anyone else have private student loans who recently graduated? What have you done with your loans?

Image: kjarrett @ Flickr

New Grad Career Cheat Sheet

One of the great things about the internet (and Google), is that it makes it exceedingly easy to quickly find information on just about anything. The downside of this technology is that there is a lot of crummy information to sort through before you find the good stuff.

Well, if you are a new grad or know a new grad who is getting ready attack the real world the NY Times recently ran an article that you should pass along. The article entitled "A Primer for Young People Starting Their First Job" is really applicable to everyone. Let's face it - most Americans don't pay enough attention to personal finance and that's why the average savings rate is negative.

While I strongly encourage you to take a look at the article, I'll provide a quick summary below. The article does a quick and dirty summary of health benefit, tax, and retirement plan considerations for new grads. There's not a great deal of deep analysis on any of the topics, but the article serves it's purpose. It gives new grads a very bare bones outline of each and points them in the right direction and gives them the types of questions they should be asking. I think that's a noble goal in itself. You can only lead people so far after all.

If you have any good resources for new grads heading out into the world please leave them in the comments.

Student Loan Database Off Limit to Lenders -- For Now

I was just reading an article over at CNN about the Bush administration closing off the student information database (the National Student Loan Data System) to lenders. I've gotta say I'm pleased. Now that I'm going back to grad school, I can say first hand the sheer the volume of offers lenders send out is too much. I personally receive no less that 4 or 5 in any given week (although I'm not sure how typical this is). I do know that InformationWeek has reported that when rated on the most recent internet security report card the Education Department moved from a C grade to an F which is at least a little unnerving. The Education Department also reports that it has revoked over 52,000 ID's used to access the system for suspicious activity or because they were no longer being used. Looks like it is a step in the right direction let's hope it continues.

Links
CNN - Lenders Can't Use Database
InfoWeek - Education Dept. Blocks Loan

Student Loan Provider Settles

Sallie Mae has been one of a few student loan providers to draw fire lately for questionable practices. However, it also happens to be the largest provider in the $85 billion dollar United States student lending industry, so that makes things a bit more newsworthy. It turns out the company was providing student perks to schools and campus financial aid workers to get preferred status or the ability to charge inflated rates. Other companies to feel the heat recently include CitiBank and Student Loans Xpress. Here's my question... does anyone think that a $2 million dollar settlement means much to CIT, CitiBank or Sallie Mae? I'm going to guess that is looked at as one of the costs of doing business. Check out the full story at CNN and shop around if you are in the market for a student loan.

Link
CNN - Nation's Largest Student Loan Provider Settles

DRIPs a Good Idea for College Students?

When you think of the things you might have purchased or do purchase as a college student beer, music (unlikely), food, and housing probably come to mind. Safe to say DRIPs don't come to mind for many people, if they know what one is at all (a dividend reinvestment program which generally allows fractional share ownership).

How about DRIPs as a smart investment for college students? I don't know about you when you were in college, but I didn't have expendable income to be throwing around investing. Look at the staggering average amount of student loan debt people come out of undergrad with these days or the costs or any professional school. If you can afford that kind of tuition and still have money in the bank then maybe this is a good idea for you.

I remain unconvinced that this is a practical solution, mostly because the article suggests that you start with $200, then make payments of around $50 a month. For the average college kid - who isn't still living off mom & dad's credit cards if we can clarify here - $50 a month is a good chunk of change. True it might only be the equivalent to a cable payment or cell phone bill, but if you are making minimum wage and not working full-time substantial none the less. Let me know what you think.

Wikipedia - DRIPs

Source article at Forbes