FAP791: Skyrocketing meal plans, PLUS loans, loan indexes

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Student Financial Aid News
+ Chronicle: Students are likely to see a sharp increase in the cost of on-campus meal plans this fall, as rising food prices have sent some college food-service operations into deficits and have forced many to get creative with their fixed budgets. As the cost of food has soared, many dining halls have focused more on reducing portions and less on eliminating popular dishes.
+ Rich Neumann, director of dining services at Ohio University, said his institution’s costs for flour increased 177 percent from April 2007 to April 2008. The price of eggs went up 78 percent over the same period.
+ Inside Higher Ed: The Bernard Osher Foundation plans today to announce a $50 million grant to create an endowment to provide scholarships for students attending community colleges in California, The San Jose Mercury News reported. An additional $20 million gift will support students who transfer from community colleges to public universities in the state. While $50 million gifts have become almost common at institutions with billion-dollar fund-raising drives, donations of this size are extremely rare when focused on community colleges and their students.
+ The U.S. Education Department issued guidance Monday to help student loan guarantee agencies carry out the federal government’s “lender of last resort” program by summertime if the credit crunch continues to limit the availability of loans for some students and other, more desirable methods of ensuring liquidity fall short. In a letter to guarantors, Under Secretary of Education Sara Martinez Tucker laid out a path for the nonprofit agencies to make loans to students at institutions that find themselves unable to secure other options. But it is widely agreed — even among the guarantee agencies themselves — that most students, colleges and lenders will be better off if the Education Department finds other ways to bolster lenders, who then make loans available directly to students, as legislation approved last week by Congress aims to ensure. In addition, numerous other institutions appear to be leaving the guaranteed student loan program for the government’s competing direct loan program.

Scholarship Update
+ New England Culinary Institute Lifelong Learner Scholarship
+ The Life Longer Scholarship is available to students who have already completed a Bachelor’s Degree or higher and are pursuing either or a career change or exploring a passion in the culinary industry.
+ Amount: $5000.00
+ Application Process: Please send copy of diploma or transcript and a letter describing why you have chosen to attend New England Culinary Institute via fax, email, or mail indicating that you are applying for the Life Long Learner Scholarship.
+ Details at our free college scholarship search site

Mail Bag
+ Anna writes in: Although Prime and LIBOR rates change (especially lately), how do schools inform parents to differentiate between a current rate and a ‘locked rate’ when researching alternative loan options? Is there a general timeframe when lenders lock in prime at 5.25 or is it done automatically when the Federal Reserve updates it?
+ Typically, indexes are adjusted quarterly, so whatever the rate is at the end of the quarter. It all depends on the lender’s capitalization period - for example, our Act Education Loan capitalizes interest quarterly.
+ Kim writes in: What are the advantages or disadvantages of PLUS loan vs. HELOC vs. private loan. Thanks.
+ PLUS loans are federally guaranteed, with fixed interest rates. HELOCs typically are variable rate, as are private student loans. All three can be used to pay up to the cost of education, and all three can often be deducted from your taxes - the interest paid. PLUS loans have more lax credit restrictions, especially in light of HR 5175. PLUS and private loans cannot be discharged in bankruptcy.
+ PLUS loans at ParentPLUSLoan.com
+ Private student loans at AlternativeStudentLoan.com

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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
+ Edvisors Jobs
+ 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.

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