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Last Updated: Oct 16th, 2008 - 13:33:17 |
With many investors around the country feeling huge losses following the failure of three of America's largest banks, Metro officials are so far breathing sighs of relief. None of the college's investments were with any of the failed firms, but indirect effects of the crisis may still hit.
"At this point we have not found any direct impact on Metro," said Cathy Lucas, Metro's vice president of communications. But the problem is intricate. The complicated network of who is connected indirectly to the failed firms is not yet clear, Lucas said.
While much of the college's money comes from tuition, state funding and the school's portion of the parking revenues, Metro, like most schools, invests privately donated scholarship money as well as teacher and staff retirement in the stock market hoping to earn more on the money.
The three funds that insure Metro faculty and staff - the Public Employees' Retirement Association Fidelity, and TIAA-CREFF - have released statements reassuring investors that they were not considerably affected.
Assistant Vice President for Development Maureen C. McKenna, who accepts private financial donations for the college, said while Metro had very conservative rules on how such money is invested and was not allowed to take high risks.
Since the overall market was down, Metro's investments would be down as well.
"We'll definitely see less returns on our investments, but it is not as tremendous as it could be," she said.
McKenna said the overall donations to the school were also expected to be lower this year than normal as donors have less money to donate when the economy is weak.
She added that Metro has had been very successful in the last two years at expanding its private donor base.
"Last year we raised the most money ever, and this year we are on track to meet those levels," she said.
Economics professor Mohommed Akacem said the whole problem stems from the sub-prime mortgage crisis that made headlines this spring, but even Wall Street specialists do not know where it will end.
There are many ways student loans could be affected by the economy, he added.
"In fact, the press is already reporting loans being harder to get - the problem is already here," Akacem said.
"Few people now were around for the Great Depression, but we saw the crash of '87, the tech bubble and now this," Akacem said.
"It is just a matter of time before the economy recovers - we may not know how bad it is going to get this time - but we know we hit a rough patch."
"Economic effect on students"
Loans-
Will be harder to come by, including student, home, small business and auto loans. Interest rates on all loans will increase.
Gas-
The price of precious metals and oil will rise as investors move their money to more conservative investments.
Employment-
As firms cut back to weather the storm, jobs will be hard to come by.
International-
Overseas business and travel will become more costly.
Inflation-
Experts predict the $700 billion government bank bailout will drive up the price of everyday items.
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