FAP512: Sallie Mae sold, student loan consolidation, NSLDS, inducements, Halou

Student Financial Aid News
+ From Reuters: Sallie Mae (SLM.N), the largest U.S. student loan company, agreed to be bought by two private-investment funds, JPMorgan Chase & Co.(JPM.N) and Bank of America Corp. (BAC.N) for $25 billion, the Wall Street Journal reported on its Web site on Monday.
+ JC Flowers & Co. and Friedman Fleischer & Lowe LLC plan to take a 50.2 percent stake in Sallie Mae, also known as SLM Corp., the paper reported, citing unnamed sources.
+ JPMorgan and Bank of America each would take 24.9 percent stakes in the company, the Journal reported.
+ The group plans to pay $60 per share for the student lender, the Journal said.
+ The purchase will be funded with $16.5 billion in debt and $8.5 billion in equity, the Journal said.
+ NY Times reporting money offered by FFELP lenders to colleges for leaving direct loan program.
+ At Indiana University in 2004, for example, Sallie Mae, the nation’s largest student lender, offered $3 million that the university could use for “opportunity loans� to some students if it left the direct loan program. Indiana left the direct loan program but said the $3 million was not the reason.
+ Bank of America, which won the University of Virginia’s student loan business, said in its 2002 proposal that certain possible incentives had “the potential to violate� federal law. The bank, which said such a discussion was normal in the bidding process, suggested that it discuss the issues with university officials “during the oral presentation phase of the process.�
+ From the Washington Post: The chairman of the Senate education committee urged the Bush administration yesterday to block student loan companies from accessing a national database that holds confidential information on tens of millions of students.
+ The request by Sen. Edward M. Kennedy (D-Mass.), came after The Washington Post reported on inappropriate searches of the database that could violate federal rules and raise concerns about data mining and abuses of privacy.
+ The problem has so alarmed officials at the U.S. Department of Education that they are considering a temporary shutdown of the system, which contains 60 million student records.
+ “Until the security of the database can be ensured, I urge you to block the use of the database by private lenders,” Kennedy wrote in a letter to Education Secretary Margaret Spellings.
+ A followup from a previous article

Scholarship Update
+ HSF/Marathon Oil Corporation Scholarship Program
+ The HSF/Marathon Oil Corporation Scholarship Program is a scholarship of up to $10,000 per year. Selected students will receive up to $10,000 for two academic years for a possible total award of $20,000.
+ In addition, scholars will be offered the opportunity to participate in a possible paid 8-10 week summer internship at various Marathon Oil Corporation locations. Scholars will also be paired with a Marathon Oil Corporation employee who will serve as a professional mentor.
+ Be of Hispanic American, African American, Asian Pacific Islander American, or American Indian/Alaskan Native heritage.
+ Be a U.S. citizen or legal permanent resident of the United States with a valid Social Security Number at the time of application. All legal permanent residents must submit a copy of their valid permanent resident card or passport stamped I-551.
+ Have a minimum cumulative grade point average (GPA) of 3.00 on a 4.00 scale.
+ Be a sophomore majoring in chemical engineering, civil engineering, electrical engineering, mechanical engineering, petroleum engineering, geology, geophysics, accounting, marketing, global procurement or supply chain management, environmental health & safety, energy management or petroleum land management, transportation & logistics or geotechnical engineering.
+ Or be a senior planning to earn a Masters degree in geology or geophysics.
+ Agree to participate in a possible paid summer internship opportunity with Marathon Oil Corporation.
+ Must apply for federal financial aid by completing the Free Application for Federal Student Aid (FAFSA)
+ Details at our free college scholarship search site
+ Good luck to Steve Runner at today’s Boston Marathon!

Mailbag
+ Kristen writes in: what do all these announcements mean?
+ Major shifts in the student loan industry
+ NSLDS would effectively put out of business most of the federal student loan consolidation companies or at the very least radically change how business is done - NSLDS, legitimately used, is used to verify student loan data. Without it, a loan company would have to rely on the student to accurately get their loan balances, accounts, lender IDs, etc. Expect consolidation to take longer.
+ Sale of Sallie Mae transforms the once public company into a private one, making it answerable only to its purchasers, and not Wall Street. Could be good, could be bad. Time will tell. For students who have loans with Sallie Mae, there probably won’t be any rapid changes at first; consider consolidating your student loans with a company other than Sallie Mae if you want to leave them.

Podsafe Music

Download “Honeythief” (mp3)
from “Wholeness & Separation”
by Halou
Vertebrae

• Buy at iTunes Music Store

More On This Album

Reminders
+ Private student loans available at any time - visit AlternativeStudentLoan.com
+ Stafford federal student loans at StaffordLoan.com
+ Student loan consolidation at StudentLoanConsolidator.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ The Financial Aid Podcast is a publication of the Student Loan Network.

Questions? Comments? Suggestions? Email me at financialaidpodcast {at} gmail {dot} com, visit http://www.FinancialAidPodcast.com, or call 206-350-1208. AIM: FinAidPodcast Add me to your iTunes by visiting http://www.FinancialAidPodcast.com/itunes/

Direct MP3 file download: MP3 file

Technorati Tags: financial aid financialaidpodcast