FAP550: Rates, FICO, private student loans, Swedish scholarship, new media and college access, Mellow Bright Band

Student Financial Aid News
+ From Banknet360: The European Central Bank today raised the minimum rates of three key interest rates in the Eurozone by 25 basis points.
+ Specifically, the main refinancing operations of the Eurosystem will be increased to 4.00%; the marginal lending facility will be increased to 5.00%; and the interest rate on the ECB’s deposit facility will be increased to 3.00%. All changes go into effect on June 13.
+ Beyond an upswing of economic growth in the Europe, at the center of this decision seems to be the advancement of general global credit risk.
+ “Today we see capital chasing investment, money chasing the ideas,” said Jean-Claude Trichet, the president of the ECB. “In other times, you see the opposite, the ideas chasing money. There are a number of reasons for this situation, which is clearly driven by a large number of reasons.
+ “We have to pave the way for an orderly and smooth adjustment to the reapportionment of risk,” he added. “It seems to us to be our duty to say to candidly and lucidly prepare for a reapportionment of risk when the time comes.”
+ Why is that important? If the EU is raising rates, the US may follow - and that will affect any private student loan based on the Prime Rate
+ From BankNet360: Fair Isaac Corp., responding to complaints by lenders, is adjusting its credit scoring methodology in the next version of the FICO score, due in September.
+ The new FICO score formula will eliminate authorized user accounts — users on credit cards who are authorized to make purchases, but are not responsible for paying the balances — from the determination of credit scores.
+ The move is designed to combat “credit renting,” a practice in which a person with a low credit scores pays a fee to rent a spot as an authorized user on a stranger’s account. The renter with bad credit piggybacks on the strong payment history of the stranger in hopes of building their own credit score.
+ Fair Isaac said it was making the change to protect the reliability and accuracy of FICO scores.
+ From Inside Higher Ed: The market for private student loans has exploded in recent years, fueled by the growing gap between the price of attending college and the availability of federal grant and subsidized loan funds. And the competition among student loan companies to provide those non-federal loans, occurring at a time of little or no federal regulation, created an environment in which some questionable (if not illegal) marketing practices flourished.
+ That has been one of the starkest conclusions of the student loan controversy that has unfolded over the last three months. And at a U.S. Senate hearing Wednesday, a slew of witnesses — led by New York Attorney General Andrew M. Cuomo, whose own investigation has spurred inquiries in Congress and elsewhere — discussed the private loan market and what if anything Congress should do to increase oversight of it. Among the issues debated: Looking back, is there more the federal government should have done to regulate the private loan industry? And going forward, should federal laws or rules be changed to give federal agencies more authority to regulate the market?
+ The overarching theme of the hearing, which was called by its chairman, Sen. Christopher Dodd (D-Conn.), was that while private loans play a role in meeting that growing gap between college students’ costs and the other kinds of aid available to them (and are therefore probably inevitable if not necessarily desirable), the federal government has not sufficiently regulated borrowers’ use of them, and must do so more.
+ Private student loans should be used AFTER federal student loans and scholarships

Scholarship Update
+ The American Swedish Institute Malmberg Scholarship Program
+ $10,000 award
+ The Malmberg Scholarship for Study in Sweden will grant significant funding for up to one year of study or research in Sweden to a U.S. resident who is enrolled in a degree-granting program at an accredited college or university, or who is a qualified scholar engaged in study or research.
+ Applications will be accepted Sept. 1 - Nov. 15, 2007.
+ Details at our free college scholarship search site
+ Have you registered for Scholarship Points yet? Drawing is in 23 days!

Focus on Financial Aid
+ Using new media to improve college access
+ Based on an article about college access from NASFAA
+ Biggest issue: getting information to students
+ Blogging
+ Podcasting
+ Easily navigated web sites
+ Offline versions
+ Podcasts are MP3s and MP4s - which means they can easily be burned to CD or DVD and distributed that way, too
+ SMS as a way to gather people for meetups
+ Establish presence on social media sites
+ Connect with students and then have them connect with other students
+ Find a PodCamp near you
+ If you are a financial aid professional or an admissions officer, you are welcome to visit the Student Loan Network here in Boston or, if there’s enough of a crowd, say, 30 or more, I’d be happy to visit you. The only expense would be travel and lodging.

Podsafe Music
+ The Mellow Bright Band, You Know Me
+ Music via the Podsafe Music Network

Reminders
+ Join the Financial Aid Podcast Loyalists on Facebook
+ Make me your Facebook friend
+ Buy Virtual Hot Wings, the Matthew Ebel live bootleg album!
+ 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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