FAP777: Birthday, Sallie Mae Student Loan Consolidation, HELOC

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Student Financial Aid News
+ Happy Student Loan Network anniversary Monique Leonard!
+ The Financial Aid Podcast celebrates 3 years on the air!
+ Hat tips to Mitch Joel, Erik & Diana, and pretty much my entire address book for this story:
+ Chronicle: Sallie Mae (ticker: SLM) announced today in a letter to colleges that it would no longer offer student loan consolidation under the federally guaranteed loan program. Students typically consolidate their loans after they graduate, combining loans from each of their years in college into a single loan to make it easier to manage when paying back the money. Until recent months, consolidations had been regarded as a highly profitable activity for loan companies because consolidation usually occurs as students enter years of repayment.
+ Lenders responsible for more than 16 percent of all student loans last year have left FFEL
+ In addition to announcing the termination of its consolidation-loan business, Sallie Mae told colleges that it would no longer pay for students the federally mandated origination fee on government-backed loans. “With the large number of lenders exiting the program,” Mr. Andrews and Mr. Feierstein wrote, “Sallie Mae cannot justify subsidizing some students at the expense of others who may be unable to get funds for college.”
+ What does this mean for you? If you’re graduating this summer, you’ll have fewer student loan consolidation options - but wait until after July 1 anyway.

Scholarship Update
+ Spring Break Photo Scholarship Contest
+ Whether you take a trip every year to the beach or hit the slopes in the snowy mountains - everyone makes plans for Spring Break. Send us a photo of your fun filled vacation or write a blog telling us about how you spent your break. If you have a video, upload it to the campaign and we’ll see if you made the most out of the best week in spring! No purchase necessary. No purchase necessary. Open to anyone who is a resident of the 50 United States, District of Columbia or Canada (excluding Quebec), has access to the Internet, and is 13 or older at the time of entry.
+ Deadline June 30
+ Details at our free college scholarship search site

Mail Bag
+ Lynne writes in: My daughter has financial aid in her private college. I am trying to get an equity loan and they are offering me a line of credit as well. If I get the loan I need it to lower my credit card interest rates and there fore consolidate them at a lower rate. If I take the line of credit also for “A rainy day” will the financial aid people want me to use that money for college tuition. I never asked for the line the bank is trying to just give it to me as I have more equity on my home than I am asking a loan for. Please help me. I don’t want to jeopardize my daughters financial aid for a “rainy day” that might never happen. Thank you Lynne
+ Any money you have is calculated on the FAFSA in checking or savings
+ It will count against you as a resource
+ In a rapidly falling real estate market - like the entire United States and a good chunk of Europe - the last thing you want to do is borrow equity if you’re anywhere close to the current assessed value of your house. If the market declines even a little when you’re at 100% loan to value, you suddenly become upside down, which means you owe more on your house than it’s worth
+ If you need a parent loan option, consider a PLUS loan, which is a federally guaranteed loan for parents of undergraduate students. Fixed 8.5% interest rate and the whole host of federal loan benefits, including no collateral.
+ Also, in recent news, banks have been outright canceling home equity loans and lines of credit arbitrarily, so if you’re counting on it, it may not be there for you

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Reminders
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+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook
+ Open an FDIC-insured savings account today!
+ Private student loans available at any time - visit AlternativeStudentLoan.com
+ Student credit card information at StudentPlatinum.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ Grad student? Get graduate financial aid information at the GradLoans.com blog!
+ Stafford federal student loans at StaffordLoan.com
+ The Financial Aid Podcast is a publication of the Student Loan Network.

I want to hear from you! Email me at financialaidpodcast {at} gmail {dot} com, visit http://www.FinancialAidPodcast.com, or call 206-350-1208.

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