FAP532: Student loan consolidation 101, industrial loan companies, Coke scholarships, Geoff Smith

Student Financial Aid News
+ Three U.S. senators filed legislation Thursday to stop companies, such as The Home Depot Inc. [ticker: HD], from acquiring industrial loan company (ILC) charters.
+ U.S. Senators Sherrod Brown (D-Ohio), Wayne Allard (R-Colo.), and Tim Johnson (D-S.D.) filed the bipartisan Industrial Bank Holding Company Act, in an effort to restore the separation of banking and commerce.
+ The act would prevent commercial firms from establishing an ILC in the future. Existing ILCs (there are 15 of them in the country) would be grandfathered, but could not be acquired by a commercial firm. All ILC holding companies would be subject to federal supervision.
+ Why is this important? ILCs allow companies to operate banks without the regulatory oversight that a normal bank has to follow - imagine being able to define your own checking account benefits and loan rates. You could lend to yourself at no interest, change loan rates that you charge others on a whim, and other potential abuses
+ Yes, Sallie Mae already has an ILC. Let it marinate.
+ From the Chronicle: NIU reveals payments from lenders and a backend arrangement with Sallie Mae
+ Taking out one of the loans from 6 lenders still results in a Sallie Mae loan
+ Reinforces that you want to ensure any benefits you have travel with your loan
+ San Jose State University opening up shop in Second Life! May 16. 16 virtual acres.

Scholarship Update
+ Coca Cola Scholars Program Scholarship
+ 250 merit based scholarships for 4 year students
+ High school seniors
+ US citizens
+ 3.0 GPA on a 4.0 scale
+ Deadline October 31 of each year
+ 50 awards of $20,000
+ 200 awards of $4,000
+ Details at our free college scholarship search site

Focus on Financial Aid
+ Renewed interest in student loan consolidation
+ Several messages asking about the basics
+ Take a bunch of your federal student loans
+ Calculate the interest rate based on a weighted average
+ Weighted average = loan balance * rate
+ Open a new loan at a longer term
+ Pay off old loans
+ Primary reason most people consolidate - lower monthly payment
+ Tradeoff: you pay more overall interest if you only make the minimum payment
+ Rentals - move to an apartment with lower rent but a longer contract
+ Benefits reduce time to pay, not monthly payment
+ Who is the best? I’m biased on that one, obviously - the Student Loan Network
+ Loan payment calculator
+ Determining a weight average interest rate
+ Amortization schedule calculator coming soon

Podsafe Music
+ Geoff Smith, If This Geek Ruled the World
+ Music via the Podsafe Music Network

Reminders
+ Join the Financial Aid Podcast Loyalists on Facebook
+ Make me your Facebook friend
+ 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.

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