FAP868: Ole Miss Student Loans, TED Spread, FAFSA

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Student Financial Aid News
+ NASFAA/Clarion Ledger: “As thousands of college students in Mississippi return for the fall semester, hundreds may be without student loan funds,” The Clarion-Ledger reports. “In recent weeks, Edamerica has been notifying students and colleges of their intention to delay releasing college loan funds as it awaits money from the federal government. ‘We have about 200 students who have Edamerica listed as their lender,’ said David Williamson, assistant director of financial aid at the University of Southern Mississippi. ‘If the funding is not here on time, it will affect their housing, financial aid, registration and classes as well.’ Between 100 and 200 students at the University of Mississippi also may be affected, said Dewey Knight, assistant director of financial aid at the university.”
+ NASFAA/NHUL: “Although students entering or returning to college this year face higher costs and fewer loan options, federally guaranteed students loans are still available in New Hampshire, and their limits have increased,” the New Hampshire Union Leader reports. “NHHELCO is part of the Concord-based New Hampshire Higher Education Assistance Foundation (NHHEAF) network. Over the past decade, NHHELCO has issued $1.5 billion in bonds to underwrite student loans in the state through the auction rates securities market which froze in February. A coalition of New Hampshire banks and credit unions stepped forward to provide $94 million in funds for the guaranteed loans, Drouin said. NHHELCO has signed an agreement with the federal Department of Education under the new law, he said.”
+ This is an interesting strategy for getting bridge funding for the Department of Education’s lending program
+ Bloomberg: TED spread widening. In a replay of the last four months of 2007, interest-rate derivatives imply that banks are becoming more hesitant to lend on speculation credit losses will increase as the global economic slowdown deepens. Banks are charging each other a premium of 77 basis points over what traders predict the Federal Reserve’s daily effective federal funds rate will average over the next three months to lend cash. The spread is up from about 24 basis points in January, and may widen to 85 basis points, or 0.85 percentage point, by mid-December, prices in the forwards market show.
+ What does this mean for you? Student loans, which have been affected by the broader market issues, may remain difficult to obtain with poor credit into the fall and winter, which could put a pinch on lending for the spring semester. Make sure you file your FAFSA. Apply for scholarships with the assumption that some student loans will simply remain unavailable.

Scholarship Update
+ ASEE SMART Scholarship
+ In general, stipends range between $25,000 and $41,000 per year, depending on academic status at the time of the award. Participants funded for less than a full academic year will receive stipends on a pro-rated basis. Further information regarding federal employee salary levels may be found at: www.OPM.gov.
+ Requirements
+ a U.S. citizen,
+ 18 years of age or older as of August 1, 2009,
+ able to participate in summer internships at DoD laboratories,
+ willing to accept post-graduate employment with the DoD,
+ a student in good standing with a minimum cumulative GPA of 3.0 on a 4.0 scale (as calculated by the SMART application) and,
+ pursuing an undergraduate or graduate degree in one of the disciplines listed on the About SMART page.
+ Deadline December 15, 2008
+ Details at our free college scholarship search site

Financial Aid 101
+ A popular question, oddly enough: Hi im am 22 yrs old and I am currently married. I will be getting divorced soon and want to know if this will revert my status to dependent because i am not yet 24.
+ FAFSA status is always based on the day you file - if you file while married, you are married. If you file while divorced, you’re divorced.
+ This is true for a lot of things on the FAFSA - questions about assets like cash in checking or savings accounts, investments, insurance, etc. are all based on your status on the day you file
+ This means that strategically, you want to file your FAFSA at the most opportune time - for example, if you’re paying rent, you want to file AFTER you pay rent, so that there’s much less cash in your checking account
+ Get all of your planned spending out of the way - textbooks, etc. - so that you have as little money as possible while still being sustainable

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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!
+ Stafford federal student loans at StaffordLoan.com
+ Parent PLUS loans at ParentPLUSLoan.com
+ Graduate student loans at GradLoans.com
+ Private student loans available at any time - visit AlternativeStudentLoan.com
+ Private student loan consolidation at StudentLoanConsolidator.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ Get FAFSA news at the FAFSA blog

+ 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.