FAP617: Free stuff Friday, Spring Break, end of summer, party photo tips, Audiopharm
Student Financial Aid News
+ Inside Higher Ed: Connecticut’s attorney general, Richard Blumenthal, on Monday announced that three colleges had agreed to settlements over possible conflicts of interest and consumer protection laws in receiving payments from a lender in return for being listed as a “preferred lender� to students and parents. While the colleges — Fairfield and Sacred Heart Universities and Trinity College — denied wrongdoing, they agreed to the settlements. The lender in question was the College Board.
+ It’s all about choice
+ Stafford federal student loans
+ Parent PLUS loans
+ More alumni of some of the most prestigious universities in the United States (which are also among the wealthiest) are shifting their giving from alma mater to smaller, less wealthy institutions that the donors never attended, The Wall Street Journal reported. The donors are motivated by a sense that their alma maters don’t really need the money and the greater impact that a gift may have at a less wealthy institution. That impact extends to the donor — as a few million dollars doesn’t get your name on a building at Harvard University, but might at a local college.
+ Last call for fall semester student loans
Scholarship Update
+ Daylon’s “Spring Break” Scholarship
+ Topic: In fewer than 600 words describe your most interesting college spring break experience. Explain how this experience influenced your life and why you believe you are deserving of the “Spring Break” scholarship.
+ Scholarship Essay submission Deadline: May 15th 2008
+ Details at our free college scholarship search site
Bonus
+ Five party photo tips
+ Closer is better
+ Use your flash - it’s going to be dark - unless you want a slow shutter effect
+ Diffuse your flash with a napkin, masking tape, or paper
+ Shoot before you drink
+ Think before you post online - and ask permission before you post a photo of someone else
FAP616: Expert Interview with Dr. Paul Wrubel of TuitionCoach
Today’s show features an expert interview with Dr. Paul Wrubel, cofounder of TuitionCoach.com. Paul has spent his entire career in education. Throughout his professional life, Paul has valued education and the family. He often describes college as a “celebration of the family.”
For the past two decades, Paul has provided college admissions and funding advice to over 4,000 students and families. A former Principal of Gunn High School in Palo Alto, California, Paul has also served as President of Cabrillo Unified School District and founder of CollegeWorks. He has delivered hundreds of public workshops on college admissions and funding and has been a guest on radio talk shows and local morning television programs. In addition to co-founding The College Company, Paul has served as a consultant with schools and service organizations wishing to create college support programs.
Paul earned a PhD and MA from Stanford, an MAT from Wesleyan, and BA from Middlebury College.
Two years ago, on August 29, 2005 at 6:10 AM, the costliest attack on American soil in history occurred, killing 1,836 Americans and costing over $80 billion in damages. It was not an act of war, nor an act of terrorism. It was a hurricane named Katrina.
Katrina began a new chapter in American history, and regardless of your political beliefs, no one can deny that the storm made an impact that America will deal with for decades to come.
Rather than look at a retrospective, today we’ll talk to Christopher Johnston, lead organizer of PodCamp New Orleans, about the situation in the Gulf Coast and New Orleans, and how you can help make a difference, as well as hear from Whitney Hoffman and Clarence Smith, Jr.
If you would like to syndicate or rebroadcast this episode of the Financial Aid Podcast, you are free to do so under the Creative Commons By Attribution, Non-Commercial, Share-Alike License, US 3.0.
If you want to make a difference, to contribute, get in touch with your elected representatives and advocate on behalf of the Gulf Coast.
+ US House of Representatives
+ US Senate
FAP614: Top 10 Back to School Financial Tips, Emma scholarship, mail bag, David Ippolito
Student Financial Aid News
Top 10 (+1) Back to school financial tips
1. You don’t need a credit card on campus.
2. Make a budget BEFORE the semester begins. Figure out what kind of money you’ll be able to earn and what you’ll be spending - and stick to it.
3. Team up with a roommate, dormmate, or friends to enforce each others’ budgets. The power of the group works.
4. Go for a lot of walks on campus. You’ll meet a ton of new people, and you won’t have to spend money to do it. Being visible is the easiest way to meet new people.
5. Everything marked free isn’t. Beware of any free offer that requires you to sign up for anything. Not saying it’s bad, just know what you’re signing for - like a stealth credit card application.
6. Some of the best conversations you’ll have are on playgrounds. Hang out at places like that vs. cafes or other money-spending venues.
7. Check your campus email every day for the first month or two. Financial aid offices often send notices to campus email addresses. Don’t miss a bill.
8. Buy and bring to campus an indoor dryer rack. You’ll cut your laundry bill in half and the rack will pay for itself in weeks, especially if it’s around $18.
9. Bring resealable containers. I’m not saying bring them into the dining hall or anything… but, you know. Make sure you don’t skip meals if you’ve paid for them.
10. Have a small lockbox in your dorm room. Keep your checks, debit card, etc. in there and locked up. Make it a combo lock so that if you lose your keys, you’re not out of luck.
Bonus tip: If you have a student ID card that’s tied to any kind of financial account, punch a hole in it, stick it on your keychain, and put your keychain on a lanyard.
Mail Bag
+ Ericka writes in: hi, i have gotten married since I last applied for financial aid so I was wondering if I need to redo all of that or what now that my name has changed
+ First, congratulations
+ Second, you shouldn’t need to redo it as it’s tied to your SSN, but do update your school
+ File your FAFSA at FAFSAonline.com
+ Whitney comments on the blog: This actually reminds me of the late 80’s to early 1990’s when interest rates were 12% and houses were being foreclosed by people who got “upside down” on the mortgages, just like they can now with car loans- you owe more than it’s worth.
+ There’s an advanatge to some people in this market, but far too many are getting killed and squeezed. I agree- if you don;t have to sell a house- don’t. Things that used to be on the market for minutes now around here now linger for months or longer.
+ Expect to see the rental market grow again, and the level of first time home ownership decline. Expect seniors getting ready to retire to be in dire straights. And be smart with your money and hang on tight.
+ Eric comments on the blog: Even after all the fear and the shakeout, things are still much worse than most realize in the core financial and housing markets. There’s more to come.
FAP613: Preparing for an economic downturn, Wisconsin budget, National Security Scholarship, Becca Loebe
Student Financial Aid News
+ NASFAA: “The wide gaps in educational attainment between people from low-income backgrounds and wealthier ones tend to lead policy makers to a logical conclusion: It’s about the money,” according to Inside Higher Ed. “But a new study questions that thinking. The study, conducted by researchers at Berea College and the University of Western Ontario and available (for $5) through the National Bureau of Economic Research, examines the extent to which ‘credit constraints’ - a lack of access to loan funds - factored into the decisions to drop out of college by a group of low-income students who had had most of their direct college costs paid for. The answer: Not very much.”
+ Chronicle: With Wisconsin’s state budget still the subject of legislative wrangling, nearly 3,800 college students are still waiting to hear whether they will qualify for a state need-based grant this year, the Wisconsin State Journal, a newspaper in Madison, reported. And the number could grow.
+ Gov. Jim Doyle and other Democrats, who control the State Senate, have proposed spending $50-million on the program, up from $43-million last year. Under the budget approved by the Republican-controlled Assembly, however, the program could receive as little as $39-million.
+ The Higher Educational Aids Board, which oversees the state’s financial-aid system, has already awarded about 22,400 student grants for the coming year, tapping out its resources for now. Connie Hutchison, the board’s executive secretary, said that if the Assembly’s budget is enacted, “we’ll have more than 6,000 students by the end of the year who would be eligible for awards but wouldn’t receive them.”
+ Last minute tuition bills and other expenses? Private student loans from ActEducationLoans.com
+ Federal student loans from StaffordLoan.com
+ And in silly fun from InsideHigherEd: The University of Washington has found a solution to removing weeds from steep areas without using pesticides: goats. The Seattle Times reported that the university is renting goats and finding that they allow the institution to achieve its environmental goals and its ambitions for campus aesthetics.
Scholarship Update
+ The National Security Education Program (NSEP) David L. Boren Undergraduate Scholarship
+ A U.S. citizen at the time of application.
+ A high school graduate, or have earned a GED, and are matriculated as a freshman, sophomore, junior, or senior in a U.S. post-secondary institution, including universities, colleges, and community colleges accredited by an accrediting body recognized by the U.S. Department of Education.
+ Applying to engage in a study abroad experience in a country outside of Western Europe, Canada, Australia, or New Zealand that meets home institution standards.
+ Planning to use the scholarship for study abroad and the study abroad program ends before you graduate. NSEP Boren Undergraduate Scholarships are not for study in the United States.
+ NSEP Boren Scholarships are merit based. Award amounts are based on the study abroad costs and financial aid information provided by the applicant. The maximum award is $8,000 for a summer, $10,000 for a semester, or $20,000 for a full academic year. Students must inform IIE/NSEP of any additional outside funding they receive for their study abroad program.
+ Details at our free college scholarship search site
Economics 101
+ What scares me? Well, white papers like the one written by the Center for Economic Policy and Research’s co-founder Dean Baker: Prospects for the Stock and Housing Markets. In this chilling paper, which reads like an economics horror story, Baker details the impact of the housing bubble’s bursting, along with the subsequent liquidity squeeze and credit crunch.
+ Executive summary: expect GDP to take a hit, expect TRILLIONS of dollars on paper to vanish, expect a recession, possibly a severe one, and expect everyone in America to be affected negatively. Hedge funds are already taking a beating, CDOs are difficult to value, overseas banks are stopping withdrawals like BNP Paribas, and markets are convulsing like electrocuted fish.
+ On the financial aid front, which is where all this news becomes relevant, many, many states and municipalities derive education funding from property taxes. As foreclosures, bankruptcies, and economic malaise spread, expect a ripple effect into financial aid and education finance, with states having less money available to fund educational initiatives such as grants and subsidized loans. Ultimately, that means more borrowing, more federal student loans and private student loans.
+ Doom and gloom? Maybe. But envisioning the worst lets you prepare for it, and then if anything less than the worst happens, you’re pleasantly surprised. Some ideas for weathering the storm, then.
+ If you own a home, don’t plan on selling it in the next two years unless you absolutely have to.
+ If you’re thinking about buying a home, hold off until this whole business shakes out. No point in spending hundreds of thousands of dollars extra if you don’t have to.
+ If you’ve got investments, take a hard look at them and diversify your holdings - definitely away from anything housing or mortgage related.
+ If you’re a student, crank up the scholarship factory like crazy, right now. As the economic situation worsens, free money will be harder to come by, so act now.
+ If you’re a student, make darned sure you file your FAFSA every year and qualify for as much federal financial aid as you can.
+ File your FAFSA at FAFSAonline.com
Executive summary: expect GDP to take a hit, expect TRILLIONS of dollars on paper to vanish, expect a recession, possibly a severe one, and expect everyone in America to be affected negatively. Hedge funds are already taking a beating, CDOs are difficult to value, overseas banks are stopping withdrawals like BNP Paribas, and markets are convulsing like electrocuted fish.
On the financial aid front, which is where all this news becomes relevant, many, many states and municipalities derive education funding from property taxes. As foreclosures, bankruptcies, and economic malaise spread, expect a ripple effect into financial aid and education finance, with states having less money available to fund educational initiatives such as grants and subsidized loans. Ultimately, that means more borrowing, more federal student loans and private student loans.
Doom and gloom? Maybe. But envisioning the worst lets you prepare for it, and then if anything less than the worst happens, you’re pleasantly surprised. Some ideas for weathering the storm, then.
If you own a home, don’t plan on selling it in the next two years unless you absolutely have to.
If you’re thinking about buying a home, hold off until this whole business shakes out. No point in spending hundreds of thousands of dollars extra if you don’t have to.
If you’ve got investments, take a hard look at them and diversify your holdings - definitely away from anything housing or mortgage related.
If you’re a student, crank up the scholarship factory like crazy, right now. As the economic situation worsens, free money will be harder to come by, so act now.
If you’re a student, make darned sure you file your FAFSA every year and qualify for as much federal financial aid as you can.
Tonight’s theme is inspiration, songs to help you get motivated, songs to help push away the negative and reach out to everything that’s good around you.
Scholarship Update
+ The National Oceanic and Atmospheric Administration (NOAA) Ernest F. Hollings (Hollings) scholarship program provides successful undergraduate applicants with awards that include academic assistance (up to a maximum of $8,000 per year) for full-time study during the 9-month academic year; a 10-week, full-time internship position ($650/week) during the summer at a NOAA facility; and, if reappointed, academic assistance (up to a maximum of $8,000) for full-time study during a second 9-month academic year. The internship between the first and second years of the award provides the Scholars with “hands-on” / practical educational training experience in NOAA-related science, research, technology, policy, management, and education activities. Awards also include travel funds to attend a mandatory Hollings Scholarship Program orientation, conferences where students present a paper or poster, and a housing subsidy for scholars who do not reside at home during the summer internship.
+ U.S. citizenship.
+ Full-time status as a 3rd year student in a four-year program or a 4th year student in a five year-program in the Fall 2008 term in an accredited college or university within the United States or U.S. territories.
+ Cumulative and semester/quarter GPA of 3.0 (based on a 4.0 scale) in all completed undergraduate courses and in the major field of study.
+ Majoring in a discipline area related to oceanic and atmospheric science, research, technology, or education, and supportive of the purposes of NOAA’s programs and mission, e.g., biological, social and physical sciences; mathematics; engineering; computer and information sciences; and teacher education.
+ The application deadline is February 9th, 2008.
+ Details at our free college scholarship search site
FAP610: What to do if you lose your job, beer and fish scholarship, Anji Bee
Student Financial Aid News
+ BankNet360: Mortgage lender First Magnus Financial Corp. filed for bankruptcy Tuesday, the 14th mortgage operation since December to fall prey to the deepening credit crisis.
+ Once the nation’s 16th largest mortgage company, Tucson, Ariz.-based First Magnus originated more than $17 billion in home loans from January to June.
+ NASFAA: One out of five undergraduate private loan borrowers did not take advantage of federal student loans that offer lower interest rates and more flexible payment options, even though these students appeared to be eligible for this aid, a new issue brief by the American Council on Education (ACE) finds.
+ There are several possible explanations for the high percentage of student borrowers who relied solely on private loans. Half of private loan borrowers with no federal loan did not file a FAFSA (Free Application for Federal Student Aid), the application for all federal loans as well as most types of grants.
+ 80 percent of private loan borrowers are undergraduates. Most undergraduate private student loan borrowers attend full time.
+ 75 percent of undergraduate private loan borrowers attend one of three types of institutions: public four-year colleges and universities (30 percent); private, not-for-profit four-year colleges and universities (30 percent); and for-profit institutions offering programs of two years or more (15 percent).
+ Most private borrowers have federal student loans as well. Seventy-seven percent of private student loan borrowers also had a Staffordfederal student loan, however 21 percent of those students borrowed less than the maximum amount.
+ Private borrowers are disproportionately dependent students. At public and private not-for-profit four-year colleges and universities, they are also disproportionately from middle-income families.
+ After grants are deducted, private loan borrowers at each type of institution face higher average educational expenses than their counterparts who do not borrow these loans.
Scholarship Update
+ Beer and fish!
+ Budweiser Conservation Scholarship Program
+ 10 scholarships of up to $10,000 each will be awarded to cover students’ expenses for tuition, fees, books, room and board and other direct expenses related to their studies. Awards will be made based on merit and will take into consideration the student’s academic achievements and their ability and commitment to develop innovative solutions that are designed to address real and pressing issues affecting the conservation of natural resources. Specific areas of interest under the 2007 scholarship program include innovative research or study addressing the conservation of fish, wildlife, plants and their habitats, water conservation and watershed management, and conservation of natural resources through waste minimization, recycling and litter prevention.
+ To be eligible for consideration, a student must be a United States citizen at least 21 years of age and enrolled in an accredited institution of higher education in the United States pursuing a graduate or undergraduate degree (sophomores and juniors in the current academic year only) in environmental science, natural resource management, biology, public policy, geography, political science or related disciplines. Recipients are eligible for one year of scholarship support.
+ Deadline April 16 of each year
+ Details at our free college scholarship search site
Jobcast
+ What to do if you think your job is going to implode
+ Immediately take inventory of your finances
+ Stockpile cash
+ Reduce debt payments to minimums
+ Eliminate all discretionary expenses
+ Put any eligible debts like federal student loans on economic hardship deferment
+ School loan consolidation at StudentLoanConsolidator.com
+ Update all your paperwork
+ If you haven’t spent time building your network, better late than never
+ Plant the flag everywhere you can - resume sites, Craigslist, social networks
+ LinkedIn tipping point: 500 connections
+ The Meta Network can connect you quickly with moderate quality but high interconnectedness
+ Focus on one or two networks
+ Identify companies in allied trades if your industry is collapsing
+ Identify companies that need your generic skillsets
+ Use new media tools as appropriate
How many SL’ers have been following the tale of Ginko Financial’s collapse? The short version: Ginko Financial was an investment bank in the unregulated economy of Second Life. Depositors could deposit money with Ginko and receive returns on their deposits that vastly outpaced returns in real life. On or about August 2, Linden Labs ordered a closing of all casinos that used Lindens as a currency for gambling, effectively outlawing gambling in world. This, combined with trading problems on the World Stock Exchange, led to a depositor run on Ginko Financial.
What’s exciting and fascinating about all of this is that it’s a real-time, present day example of stuff that’s normally relegated to dry, dusty financial history textbooks, and a validation of some of the financial institutions we have in present-day America that we take for granted, or worse, criticize without fully understanding.
Two institutions in present-day America could have saved, or at least helped Ginko Financial: the FDIC and the Federal Reserve.
The FDIC, or Federal Deposit Insurance Corporation, is a federal corporation set up in 1933 which offers a guarantee to depositors that up to $100,000 of their money in checking and savings accounts will be replaced by the government if the bank fails. The primary function of the FDIC is to provide confidence to consumers that their money is safe, thus reducing the risk and impact of bank runs.
The Federal Reserve System is a central banking system created in 1907 after the third major banking panic in the United States. One of the functions of the Federal Reserve is to act as a lender of last resort for commercial banks who face a liquidity (cash) crunch; banks that can’t borrow from other banks to cover a shortage of cash at market rates can borrow from the Federal Reserve at rates set by the Fed, which typically are higher than free market rates.
In the case of Ginko Financial, having the ability to borrow from a lender of last resort would have allowed them to cover their depositors’ money, and having depositor insurance would in turn reassure those who deposited money that their money was reasonably safe. Instead, a bank imploded and took its customers’ money with it.
Interestingly enough, the absence of an FDIC and FRB equivalent has real life consequences, too. One of the other roles of central banking is to contain inflation. Hyperinflation and currency devaluation sound dry until you realize they were responsible for millions of deaths in the 20th century - hyperinflation was one of the key factors involved in the implosion of the Weimar Republic, which in turn led to the rise of Adolf Hitler.
It’s important to point out that Linden Labs doesn’t need to create either an FDIC or FRB equivalent - a private consortium can do that just as well. Instead of acting as solely independent entities, the 20 or 30 so banks in SL could set up an interbank offering system similar to what banks in London did years ago (the LIBOR rate, on which many loan products are based, is the London Inter Bank Offering Rate, the rate at which banks in London will borrow from each other), and establish transaction fees on things like ATMs to fund a deposit insurance fund, just as the FDIC does today.
Welcome, Second Life, to real life economics. Thanks for being a fantastic, living example of the power of money and what the risks of an unregulated economy look like.
“Daichi”
