Also in the news, Sallie Mae has been trying to buy AES/PHEAA. According to CBS MarketWatch, Sallie Mae offered $1 billion for PHEAA. What did PHEAA think? According to Elinor Taylor, chairman of the board of directors of PHEAA: [quote]“We have an obligation to protect the long-term interests of Pennsylvania students and to be wise enough to see through a get-rich-quick scheme designed to enrich shareholders, not the Commonwealth of Pennsylvania,” said Elinor Taylor, board chairman of the agency, in a statement. Taylor said the PHEAA “is not now and never will be for sale, especially to a profit-driven corporation with a track record of overcharging borrowers, laying off workers and gobbling up any organization that stands between students and a quest for bigger profits.” [/quote] Source: CBS Marketwatch It will be interesting to see how this one turns out…

According to various newswires, the corporation formerly known as Sallie Mae has completed its privatization, meaning that it is no longer a government-sponsored enterprise (GSE), and is now wholly a private-sector company. What does this mean for students? Well, this is strictly conjecture on my part, but as a wholly-private company, my guess is that Sallie Mae will need to increasingly focus on serving its most important customers… … its shareholders. Don’t believe it? Look at the list of top shareholders: http://finance.yahoo.com/q/mh?s=SLM Fidelity, Vanguard, State Street, Citigroup… these are not corporations which view profits casually or carelessly. They are very much profit-focused, and expect results, which means that Sallie Mae will need to deliver earnings, profits, revenues, and growth commensurate with any private, publicly-traded corporation. If profits start to sag, Sallie Mae will need to do like any other corporation and find a way to boost profits. You can guess who will foot that bill. It won’t be the shareholders. Sallie Mae is a for-profit corporation. Unlike some other student loan agencies, like TERI, Sallie Mae is not bound by any rules other than SEC rules and those governing private corporations. If they suddenly decide their Signature Private Student Loan interest rate needs to be 42%, then they can do that, and loan holders will either have to pay up or get out. My opinion only. You can research SLM for yourself here: http://finance.yahoo.com/q?s=SLM

Financial aid is a lot like bread and butter. Stay with me here for a moment. Let’s say that you have a pile of bread slices and a tub of butter. The slices represent all the students who want to go to college but can’t afford to pay full price. The butter represents the federal student aid program - Pell Grants, Perkins Loans, Stafford Loans, student loan consolidation, PLUS loans, etc.

Why is it so hard to get federal student aid? Because you and the Department of Education have contrary goals. You, as a diner of the slice of bread, want as much butter as possible - i.e. you want as much of your education subsidized by the government as possible. This is not an unreasonable request since the government’s funds are paid for by taxpayers, which you or your parents probably are.

The Department of Education, however, has a different goal. Their goal - to get butter - any amount - on as many slices of bread as possible. So they will work very hard to make sure as many slices of bread get butter as possible, but that butter is going to be awfully thin - so thin that you may not even taste it.

What’s the solution to make everyone happy? Well, there really isn’t one per se. You could reduce the number of slices of bread - disqualify more students and their families - or you could increase the supply of butter - via more taxes. Either way, the government would have to do something unpopular, and unpopularity is something the government - particularly elected officials - strive very hard not to be.

(one reader pointed out that the $151 billion spent on the war in Iraq to date could have funded 7.3 million four year scholarships, but voters decided, in the 2000 and 2004 elections, that the Iraq War is a priority, right or wrong

In the meantime, what can you do to get more aid, more dollars for education? Simple (but not easy):

1. Get scholarships. Free money. The only cost is postage, time, and effort, and optionally a reputable search service like GotScholarships.com. Visit http://www.GotScholarships.com to see the service.

2. Get federal loans. Federal student loans are a good bet for low interest loans. Visit http://www.StaffordLoan.com for more details.

3. Get private loans. Private student loans provide alternative sources of financing at competitive rates. Visit http://www.AlternativeStudentLoan.com for more details.

5. Solicit help. There’s nothing wrong with setting up your own web site and PayPal account and requesting assistance. Sure, it requires swallowing your pride, but if the cost of your pride is a lost education… well, it’s your life.

6. Vote. Not just in the Presidential Election, but in every election you are eligible for. Federal, state, and local. Why? Because a lot of the very quiet little local and state elections put officials in office who contribute to the overall big picture. That House of Representatives mid-term election candidate might be the deciding vote in an education bill in two years, so vote early, vote often.

From time to time, we are asked if we have loans for things other than student loans for education, and the answer is… kind of. We work with a variety of partners to provide sensible consumer loans to customers; here’s a couple of links to our various “other” loans:

http://www.StudentPlatinum.com

http://www.studentloannetwork.com/mortgage/

There was an article today in the CS Monitor titled “Think you can’t afford college in 2005?”, in which the author made this assertion: [quote]But many schools don’t offer their own aid, so students will have to borrow more, including unsubsidized loans with less favorable rates.[/quote] In actuality, Subsidized and Unsubsidized Federal Stafford Loans have the same interest rates - 2.77% in school and in grace, 3.37% in repayment. What separates the two is that Subsidized loans have their interest paid for you by the government while you are in school; unsubsidized loans accrue interest while you are in school. You’ll pay more overall, but the rates are no more or less favorable.

Use a professional preparation service to get your FAFSA in exactly on January 1. If you try to file a FAFSA with the Department of Education either online or by mail before January 1, 2005, it will be declined because processing hasn’t begun yet. By filing with a professional preparation service, it will be loaded and transmitted as soon as the doors open, putting you as close to the front of the financial aid line as you can get. Visit: http://www.FAFSAapplication.com today!

The Student Financial Aid Newsletter for January 2005 has gone out, and is available here:

http://www.financialaidnews.com/jan2005.php

This is a great issue, with 10 hot tips for maximizing your federal financial aid with the FAFSA, as well as four [B]full tuition scholarships[/B] to help you find the education you’re looking for. If you haven’t gotten it yet, read it on the site…