CORRECTION: A contextual error was made in the article Poor economy to affect UW student loans."" UW-Madison professor Howard Schweber is attributed as saying within the next three years, universities such as UW-Barron and UW-Stout would close due to the state of the current economy. The statement should have read that if the government does nothing to fix the economic situation, smaller private and state public schools may face closure. There is no such discussion underway about closing UW System schools as the aim of the system is to expand educational opportunities in Wisconsin. The Daily Cardinal regrets the error.
UW-Madison professors said Monday the current state of the world economy will affect the future of students' loans.
Professors Howard Schweber, Edward Friedman, Jim Johannes and Timothy Riddiough served as panelists at the Students' Economic Forum Monday night in Science Hall.
Schweber started with a broad overview of how the U.S. economy has developed in the past decades, beginning with the conception of the American dream.
According to Schweber, because higher education and home ownership are large components of the ""dream,"" the government pressured banks to provide loans to Americans. Many of these loans are in amounts individuals cannot pay back.
Riddiough used an analogy of a party, where the Federal Reserve was a bar tender who failed to regulate the heavy drinking of the investors.
""Now we're feeling the hangover,"" he said.
The professors agreed on the imminent collapse of the private student loan market. Schweber said he thought many universities would have to close in the next three years, including UW-Barron and UW-Stout.
Schweber said, prior to the economic crisis, the U.S. relied on risky loans to attain the greatest college attendance and home ownership rates in its history.
""[They] turned out to be something we can't afford,"" Schweber said.
Despite the obstacles facing students, the professors offered optimistic insight.
""The way the world operates is going to change,"" Riddiough said. ""There's a lot of pain right now and more coming down the pipe. But at the same time, there is tremendous opportunity to remake the world we live in.""
Friedman said the crisis could increase U.S. standing in the world.
""The U.S. is enhanced in its position as the only place where we can move forward,"" he said. ""Everybody is waiting for [President-elect Barack] Obama to come to power and lead us.""
Mike Sakowski, the economics coordinator for the Wisconsin Union Directorate's Society and Politics Committee, said the professors helped explain many technical aspects of the economy.
""They were very good at bringing the issues to life,"" Sakowski said.
The WUD Society and Politics Committee, Center for World Affairs and the Global Economy, the China Economic Forum and Students in Free Enterprise organized the forum, which is part of a mini lecture series extending through the end of the month.
