FAP635: Student loan legislation impact, Free Stuff Friday, Douglas Spotted Eagle

Student Financial Aid News
+ Chronicle: With a flourish of his pen, President Bush signed into law on Thursday legislation that will provide the largest increase in federal student aid since the GI Bill, while sharply cutting government subsidies to student-loan providers.
+ The new law, which goes into effect on Monday, the first day of the 2008 fiscal year, will slash government subsidies to student-loan companies and use the savings to reduce the federal deficit, raise the maximum Pell Grant to $5,400 over five years, and halve the interest rate on subsidized student loans.
+ Nelnet (ticker: NNI) a major national student-loan company based in Nebraska, was one of the first to react. Three weeks ago, it announced it would lay off 400 employees and close five small loan-origination offices to make up for lost revenue. Then, on Thursday, it confirmed rumors that it will no longer pay loan origination fees for students who take out Stafford Loans, which are need-based federal loans. The change means that, starting Monday, borrowers will have to pay up to 2.5 percent of their loan balance in origination fees.
+ Another lender, U.S. Education Finance Group, said on Wednesday that it had laid off 25 of its 45 employees and would stop offering borrower benefits on new Stafford Loans starting October 1. The combined cuts will shrink the lender’s annual budget from $8-million to $3.5-million.
+ The Pennsylvania Higher Education Assistance Agency, which stands to lose $44-million under the bill, is also weighing cutbacks. Scott E. Miller, a lobbyist for the agency, said it had imposed a freeze on hiring and on new contracts, but was not planning layoffs and will maintain its loan-forgiveness programs for public servants. All other borrower benefits, he said “are being looked at with a very serious eye.”
+ And earlier this week, the GCO Education Loan Funding Corporation announced that it would temporarily stop purchasing federal consolidation loans. In a statement, GCO’s chief executive, Ron Page, said that “given current market conditions and legislative changes … we cannot offer a price for consolidation loans that is high enough for clients to recover their origination costs.”
+ So far, we’re good.

Scholarship Update
+ Allogan Slagle Memorial Scholarship
+ The Association on American Indian Affairs offers Allogan Slagle Memorial Scholarships in the amount of $1,500 to students who are members of tribes that are not recognized by the federal government. Disbursement in the amount of $750 is made directly to the college fall and spring semesters pending satisfactory progress. Spring disbursement requires a copy of the fall semester’s grades and a spring semester class schedule. This scholarship does not automatically renew. Students are eligible to apply on a yearly basis. Due to the nature of tribal status, a Certificate of Indian Blood is requested and helpful, but not required. Documents showing lineal descent are acceptable.
+ Deadline July of each year
+ Details at our free college scholarship search site

Free Stuff Friday
+ Windows Screenshot Captor
+ FastCall 411
+ Cat Calendar for TV
+ Flickr Folder Monitor for Windows
+ Ken Rockwell’s Nikon site
+ jZip for Windows
+ Xee for the Mac
+ More iPod Touch stuff
+ Mobile Facebook
+ Mobile CNN
+ Mobile Gmail

Podsafe Music
+ Douglas Spotted Eagle, Summer Morn

Reminders
+ Add the show to your iTunes by visiting http://www.FinancialAidPodcast.com/itunes/
+ Register for PodCamp Boston for free
+ 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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