To trenchantly understand the effect of the US recession on students, we first need to

understand what a recession actually means. Recession, in statistical terms, is defined as 'two
successive quarterly declines in GDP,’ and in economic terms, ‘a general slowdown in economic
activity in a country over a sustained period of time.’ The present recession which started in
August 2007 resulted in the bankruptcy of the biggest banks in the world and the fall of the
European and World stock markets. An economic decline of this magnitude generally affects the
emolument and employment rates of countries adversely. Even though the present recession
originated in the US, the collateral damage has hit the world hard today.We know the fact that
when America sneezes, the whole world catches cold. But what if America catches a cold?
Envision!! And America is already in the clutches of cold.

In November 2008 alone, America reported job losses of more then 530,000, the biggest
single month figure since 1974, taking the US unemployment rate to 6.7%, the highest in 35
years. These, however, were just the figures in America. Economies of many countries, including
India, which largely depend on American MNCs for revenue, were gravely affected as well. A
predication of this is the high unemployment rate among students who have or are graduating in
these perilous times.

One section of students which is going to be affected greatly is the prehensile minds that
go abroad for higher studies. Most of these students go on scholarship and the recession has been
posing a new threat in the form of scholarships being cut down and number of financial aids
going down to rock bottom. Due to the endowment fund cuts by the corporate sector to
universities the latter may have to reduce the number of scholarships. According to The Times of
India (14.1.2009, Page 15) the Harvard endowment which was worth $36.9 billion at the end of
June 2008 is said to have come down by at least 22% since then, and is expected to reduce
further for the fiscal ending June. Yale University’s endowment is said to have lost about a
quarter of its value during the second half of 2008, and same is true for other top American and
European universities. This is precluding students from going abroad.

The craze for a foreign degree is increasing since the average Indian institutes are losing
their credibility due to lack of recruitments, making it a precarious situation for the students.
Even the students who have graduated recently are not much better off. Many of the students
who were offered campus placements last year are being made to cool their heels. Despite
making through campus recruitments, students are unsure whether they will get confirmed offers.
Indian students pursuing higher studies in the US are in an equally sad predicament. After doing
their MS and PhD, most students are unable to find employment in the US and are being forced
to return to India. Most of the students being ‘recession virgins’, i.e. younger people who have
never experienced recession, are unsure how to tackle the issue at hand. Students need to do a
situational analysis. Impact studies, risk management and research are equally important.

However, all is not lost yet. There is light at the end of the tunnel. Many economists
enunciate that this is the time to invest sagaciously in the market. They say that not only will the
investors be assured of higher returns later; such investments will also help ameliorate the
limping economy of the countries sooner. Many of the students who would otherwise not have
considered the option of trying their hand at entrepreneurship can do so now with greater vigour
and assurance. The low cost of resources and the tax benefits by the government make this career
choice very practicable to embark on and pioneer.

Also, as educationists say, now is the time to specialize and gain valuable ground in the
job market. Any company which hires manpower, will definitely prefer a person with
specialization in the field so that they can save on training and the number of extra hands. The
options need to be weighed carefully though, as specialization should be done not only in the
field in demand, but also the field of interest.

All said and done however, the key thing is to stay optimistic, sanguine and spirited.
What we do today is what we will be tomorrow. It is of cardinal significance therefore, to keep
both our feet on the ground and think with tranquility of mind. Human spirit is the hardest of
things in the world to break and if we have that belief in ourselves we can and will come out as
winners from this ephemeral enigma called Recession.