FAP906: Parent loans, tax refunds, free stuff, Black Lab

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Weekly Financial Aid Roundup

Breaking - the Department of Education has canceled PLUS loan auctions.

Through a notice in the Federal Register of March 3, 2009, the Department established an April 1, 2009 deadline for the submission of pre-qualification requests under the Competitive Loan Auction Pilot Program for Parent PLUS Loans, relating to loans to be made for loan periods beginning on or after July 1, 2009 and ending on or before June 30, 2011. In order for the auction to have been considered successful for any State, at least two lenders must have submitted pre-qualification requests for that State. However, the Department failed to receive two requests for pre-qualification for any State, and for the vast majority of States the Department received no requests at all. For this reason, the Department considers the purpose of the Competitive Loan Auction Pilot Program to have been frustrated, and it is canceling the auction that was scheduled to occur on April 15, 2009.

During the 2009-10 and 2010-11 award years, Parent PLUS loans under the Federal Family Education Loan program may be made by any eligible lender to parents of students attending eligible educational institutions in any State.

What does this mean for you? What was not a great idea has been canned. The reasons for a lack of bidding by lenders are pretty simple and boil down to an economy that makes lending tough under any circumstances, much less a lowest-bid war. To think that lenders would voluntarily try to reduce what little profit was left in the worst economic crisis in 75 years was the height of silliness.

Increased education tax refund and how to take advantage of it.

Student debt balloons up.

FICO scores and student loans.

Scholarship Points Instructions

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Scholarship Update

Jonathan Olson - University of Iowa did indeed win the Student Loan Network $10,000 scholarship. He said:

I have just returned to school to complete an undergraduate degree in Actuarial Science that I began long ago. I left my full-time job last August to pursue my education full time. With student loans racking up, this scholarship couldn’t have come at a more useful time.

Congratulations, Jonathan!

We’ve got $3,500 to give away this month. Enter to win at ScholarshipPoints.com.

News You Can Use

Managing your reputation online.

Free Stuff Friday

Big crop!

Ben & Jerry’s and Bare Naked Ladies give away 3 free songs.

Free Quaker Rice Snacks.

Huggies has some diapers.

Free toothpaste from Walmart.

Some free shampoo from Mizani.

Free eco-friendly grocery bag from Kroger.

Free bottle of ketchup.

Free Gillette body wash.

Free sunglasses case.

Free pile of my eBooks.

Ben & Jerry’s again - free cone day is April 21 from noon to 8 PM.

Free Song of the Week

Black Lab, See The Sun

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Reminders
+
+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook
+ Online degrees programs and directories at Edvisors.com
+ Free college scholarships contests!
+ 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 PrivateStudentLoans.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ The Financial Aid Podcast is a publication of the Student Loan Network.

FAP849: MEFA Private Student Loan troubles, dwindling scholarships

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Student Financial Aid News
+ MEFA shuts down lending for the fall semester - see the video from WGBH, MEFA Student Loan Troubles
+ 40,000 students, parents, and families, over $500M
+ If you had MEFA student loans in the past, or were planning to take out a MEFA private student loan, the Student Loan Network may be able to help - call us at 877-328-1565 or visit www.StudentLoanNetwork.com
+ A disturbing trend I don’t have metrics for yet - the number of scholarships that are not renewing. When you Google them, it’s last year’s page and there’s a note saying the award has been discontinued or is pending review.
+ As the economy trends downward, scholarships may become harder to find - so get cracking.

Scholarship Update
+ The Jesse Brown Memorial Youth Scholarship Program encourages young volunteers to play active roles in the Department of Veterans Affairs Voluntary Service (VAVS) programs. It recognizes outstanding young volunteers who give of their time by awarding annual scholarships that may be used to continue their education. The Disabled American Veterans has awarded 87 scholarships worth $578,000 since the inception of the Jesse Brown Memorial Youth Scholarship Program in 2000.
+ Scholarships can be awarded to any volunteer who is age 21 or younger and has volunteered for a minimum of 100 hours at a VA medical center during the previous calendar year. All volunteer hours must be credited to the Disabled American Veterans.
+ Scholarships can be used at any accredited institution of higher learning; to include universities, colleges, community colleges, vocational schools, etc.
+ Scholarships must be utilized in full prior to the recipient attaining the age of 25, or within 6 years of receiving the scholarship, whichever is later.
+ Immediate family members of the DAV national organization are eligible to receive a scholarship.
+ Nominations for this award may be submitted by the Voluntary Service Program Manager at the VA medical center, DAV Department Commander, or the student may complete a self-nomination form which is available on-line. If you are submitting your own nomination, please include an essay discussing “What volunteering at a VA medical center means to you.” (Essay should be 750 words or less).
+ All nomination packets should include a nomination form, essay, and any supporting documentation which you would like to have considered by the Selection Committee.
+ Deadline February 25
+ Awards up to $15,000
+ Details at our free college scholarship search site

Mail Bag
+ My name is Nancy and I am from Germany. I just lived in the US for about 10 months as an Exchange Student and now I am back in Germany to finish up High school here but I would love to be back soon and to attend college in IN that would be awesome. I looked through the website and I am not sure if there are any scholarships with 100% tuition for international students? I really want to come back to the states and go to college there but I don’t have the money so right now it is not possible for me!
+ Very, very few - Fulbright scholars programs, etc. where you have to be the very best of the best
+ Check out InternationalScholarships.com and InternationalStudent.com
+ Michelle writes in: Hello! What a fantastic podcast! I have been an avid listener for awhile now. As an incoming graduate student this fall 08 I have come across some financial aid stress over the summer. I cannot express how much appreciation I would have if someone could give me advice about this situation.
+ It is now the end of July 08 and I still have not received my financial aid award. I call the office approx every two weeks asking when it will be awarded. Their answer is “sometime between June and August.” Apparently my file is up to date, and they say the paperwork just needs to be processed by their financial officer. My student bill needs to be paid by August 18, 2008.
+ I have already chosen a lender for student loans, so I am just waiting on my award. Do you happen to know the turnaround time for a loan to be processed? Some ppl say a month and I am worried that my bill will not be paid in time. Should I be worried about this? Again, I appreciate any advice. Great job Chris!!
+ Your school may do batch processing - typically, for federal student loans, the turnaround is whenever the school does certification, followed by disbursement
+ Make sure your financial aid office is communicating with the bursar’s office so that the billing folks know when the loan money is supposed to come in - call both
+ Mihoko writes in: Hey Chris, I think I have a similar question someone named Mercy asked you awhile ago. I’m a US citizen and I’ve been accepted to a foreign school outside the US. The school is not on the FAFSA list of approved foreign schools. Nor is it not on the list of the private student loan companies and banks I’ve talked to so far. Is there a way to get some kind of student loan with this dilemma? Thanks for all your help and I love your show.
+ Not really, until the school gets set up with either Title IV certification or set up with a private student loan lender. You could also explore a regular unsecured consumer loan that’s not a student loan, but that can be expensive. See if the school plans to pursue Title IV certification.

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Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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
+ Financial Aid discussion forums
+ Get FAFSA news at the FAFSA 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.

FAP848: How to shop around for student loans

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Student Financial Aid News
+ NY Times: Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.
+ Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.
+ There’s a bunch of banks that are distressed, but here’s an interesting sidenote - IndyMac, the bank that went bust a few weeks ago, wasn’t on the FDIC watch list at all, and even sites like BankRate.com fail to predict unstable banks.
+ In this kind of environment, keep deposits under the FDIC insurance limit, and if you’re trying to get a loan of any kind, make sure your credit is in top shape first, and expect to potentially be declined even with good credit, not because you did anything wrong, but because the bank you spoke to may be financially on the brink of failure
+ If you’re applying for student loans, federal student loans such as the Stafford loan and PLUS loan are your best bets for approval, as Stafford loans have no credit requirement and PLUS loans have relaxed requirements; both are backed by the federal government, which means banks may be able to sell them more easily.
+ NY Times: Comparison shopping for a private student loan? Doing so may damage your credit score. In few other areas of consumer life are you at risk of being penalized for seeking out the best deal. Indeed, mortgage and auto loan seekers who comparison shop within a relatively short period of time do not see their credit scores suffer. But Fair Isaac, the company that helps credit bureaus calculate credit scores, does not extend the same break to private student loan applicants or their parents, who often co-sign for loans.
+ While Fair Isaac has mined years of data to determine that people making a bunch of mortgage and auto loan applications over a short period are almost always innocently shopping for a loan, it hasn’t declared student loan shoppers similarly safe.
+ In the meantime, lenders could help a lot by doing the following: First, state on their Web sites which credit bureau or bureaus they are using. Then, state whether that credit bureau is classifying their requests in a way that could damage an applicant’s credit score.
+ For the record, the Student Loan Network primarily uses Experian, and to the best of our knowledge, because we work with major banking partners like Discover Financial Services (ticker: DFS), Lehman Brothers (ticker: LEH), etc., your credit score shouldn’t take any additional hits beyond the standard first hit when you begin shopping around.

Scholarship Update
+ Running a survey on our site, Student Scholarship Search. Please take a few moments.
+ Scholarship Points $1,000 drawing for July happens in just 3 days!

Financial Aid 101
+ Shopping around for student loans
+ For federal student loans like the Stafford and PLUS loan, thanks to the credit crunch and the CCRAA, there’s no fundamental difference among federal student loans any more. There used to be borrower benefits, but no one really has those any more. The only metrics left are things like customer service.
+ For private student loans, shop around primarily based on rates and benefits. Look for, obviously, the lowest rates available, but base this not on the best published rate, but the spread.
+ For example, our spreads are in the range of LIBOR + 3.5% to LIBOR + 7.75% (some variations) - that makes us not as good a deal if you have perfect credit but a pretty good deal if your credit isn’t perfectly spotless
+ Different lenders use different base rates - some use Prime instead of LIBOR, which lets them publish rates like Prime + 0%, which looks fantastically than LIBOR + 3.5%, until you dig in and find that PRIME + 0% is 5%, and LIBOR + 3.5% is 5.5%.
+ Compare fees, too. What’s the origination or guarantee fee?
+ Compare benefits - is there deferment? Forbearance?
+ There’s been a lot of talk about peer to peer lending, which tends to be a non-beneficial model. Peer to peer lacks the interest tax credit, since they’re not qualified education loans, so you lose that tax benefit. Some have very short repayment terms, 3 years, meaning you have to repay while you’re in school. Others have astonishingly high fees, especially if you have poor credit; Prosper has an average interest rate of 26.1% and for poor credit, 31.88% - which is worse than virtually every credit card out there. Some of these loans also don’t offer deferment or forbearance at all (as of July 28, 2008).

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
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Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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
+ Financial Aid discussion forums
+ Get FAFSA news at the FAFSA 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.

FAP829: GI Bill expansion, pirated textbooks, mail bag

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Student Financial Aid News
+ Chronicle: College students are increasingly downloading illegal copies of textbooks online, employing the same file-trading technologies used to steal music and movies. Feeling threatened, book publishers are stepping up efforts to stop the online piracy.
+ One Web site, called Textbook Torrents, promises more than 5,000 textbooks for download in PDF format, complete with the original textbook layout and full-color illustrations. Users must simply set up a free account and download a free software program that uses a popular peer-to-peer system called BitTorrent. Other textbook-download sites are even easier to use, offering digital books at the click of a mouse.
+ Inside Higher Ed: President Bush signed a supplemental war spending bill Monday that includes a dramatic expansion of GI Bill benefits for veterans who have served on active duty since September 11, 2001. The new GI Bill, championed by Sen. Jim Webb (D-Va.) would provide up to the cost of in-state tuition at the most expensive public college in a veteran’s state, a monthly housing stipend based on a college’s location, and an extra $1,000 annually for books. Currently, GI Bill benefits are worth just $1,101 monthly, and many are wonder how the infusion of new funds for veterans might impact where they choose to attend college. The GI Bill expansion is estimated to cost $62 billion over 10 years.
+ Be sure to check in with the Veterans Administration to learn how to take advantage of your new benefits

Scholarship Update
+ If you could send a message on a science, technology, or health issue to the next U.S. president and Congress, what would it be?
+ Voice your vision for science and society to win cash and other prizes!
GRAND PRIZE: $2,000
+ Energy security. Nuclear weapons. Genetic engineering. Climate change. Stem cells. Space militarization.
+ Science and technology issues have enormous implications for society at large. The next U.S. president, Congress, and local leaders will confront topics that matter to young people, such as climate change, affordable health care, nuclear weapons buildup, and U.S. economic competitiveness in science and engineering.
+ Here’s how to deliver your message:
+ YouTube Video/Flash Video 5-minute limit or
+ Digital Audio/Podcast 5-minute limit or
+ Written Essay/Editorial 750-word limit
+ Prizes:
+ Grand Pug-Prize: $2,000
+ Second Pug-Prize: $1,000
+ Third Pug-Prize: $500
+ Best Video Pug-Prize: $100+
+ Pug Perks! Contestants who submitted their entries before June 3 will receive a free t-shirt, Frisbee, or mug just for participating. We regret to inform you that as June 2, Pug Perks have run out. Enter the contest today for your chance at the cash prizes listed above!
+ DEADLINE: July 15, 2008
+ Details at our free college scholarship search site

Mail Bag
+ Brittney writes in: What if a student’s marital status changes during a school year they have already been awarded money for? Do they just need to wait and change it the next time they file their FAFSA? Or do they need to notify FAFSA in some way?
+ Brittney - if the money’s been awarded, then you just file differently the following year.
+ Linda writes in: What if you were in a foster home and was adopted by the forster parent who received money from the state for you. Are you considered independent?
+ Linda - if you’ve been adopted, then you’re no longer a ward of the state and are now a dependent student.
+ David writes in: I’m David, greencard holder, 22, both of my parents passed away years ago, living alone with a partner and a child that’s hers. I filled out my FAFSA already as independent, claiming my partner as a dependent, receiving more than half of her support from me. In my taxes I had no dependents since she has no SS#. I’m getting more money for school by claiming myself as independent?
+ David - if the child in the house is deriving its support from you, and you claimed the child as a dependent on your taxes, then you would be an independent. Your partner would need to be your spouse to make the claim for her.
+ See this blog post on who is a dependent vs. independent student
+ M Reyes writes in: I’m confused as of what to borrow : parent plus loan or Alternate student loan. I understand that there is not deferrement on Parent plus loan. Is it true? I will appreciate much if could answer. thank you.
+ There is deferment on PLUS loans, but there are other key differences
+ See lots of student loan options at StudentLoanNetwork.com

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+
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Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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
+ Financial Aid discussion forums
+ Get FAFSA news at the FAFSA 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.

FAP805: Selling names, FAFSA EFC, MN SELF Loans

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Student Financial Aid News
+ Two blog posts over the weekend for you to check out
+ Yesterday we presented the Veterans Administration list of educational benefits for surviving dependents of active duty service members killed in action
+ Also had a blog post on staycationing, some tips on how to do it right
+ Inside Higher Ed: The College Board is experimenting with allowing admissions offices to obtain the names of potential students from low-income backgrounds in a program that had been eliminated for fear that it was being used to focus attention on wealthy applicants.
+ For the College Board, the issue is important not just because of the educational issues involved, but because selling the names of potential college students is a big business. The College Board sells names to about 1,000 colleges and universities, which pay about 31 cents a name (a price similar to that charged by the two main competitors in the name-selling business: ACT and the National Research Center for College and University Admissions.

Scholarship Update
+ Sponsor: Brickfish
+ Campaign Title: Shoe In - Fave Footwear Photo
+ Rules: Click here to see complete campaign rules and regulations
+ Duration: April 25, 2008 06:00 PM (PST) - July 25, 2008 11:30 PM (PST)
+ Description: Four inch heels or hell on wheels, everyone has a favorite pair. Whether you wear them on the court or out to the club we want to see which shoes make your feet smile. Grab a camera, head to your closet and take a picture of your fave footwear! Your entry is a shoe in!
+ Rewards:
+ Grand Prize: One winner, selected by the Brickfish panel from the top 250 highest scoring entries, will win the choice of one of the following: $500 gift certificate to the store of their choice or a $500 scholarship (or cash).
+ Most Viral: One winner, chosen by the Brickfish panel from the top 250 Most Viral entries, will win a choice of one of the following: $250 gift certificate to the store of their choice or a $250 scholarship (or cash). Learn about Most Viral.
+ Participation Sweepstakes: One winner, who participates in the campaign by submitting an entry will be randomly selected to win a choice of one of the following: $250 gift certificate to the store of their choice or a $250 scholarship (or cash).
+ How to Submit:
+ 1. Take a photo of your favorite shoes.
+ 2. Click the Submit Entry tab and follow the steps provided.
+ 3. Tell your friends to come to Brickfish and vote for your entry!
+ Requirements: Photo must be the original work of the participant. Photo must be of one or more shoes.
+ Details at our free college scholarship search site

Mail Bag
+ Richard writes in: Hey Chris! A very weird thing happened yesterday, very weird. I got this email from the department of education.
+ Dear RICHARD,
+ Your Correction to your Free Application for Federal Student Aid (FAFSA) has been processed and the data will be made available to the school(s) listed on your corrected FAFSA. The financial aid office at your school will contact you if additional information is required.
+ The Financial Aid Administrator (FAA) at your school has made corrections to your application. If you think you need to make additional corrections, please contact your FAA before doing so.
+ I went to the site after checking it was actually the department of education, put in my credentials, and looked at my SAR. Here’s what’s weird. On the bottom of the page it says, “Site Last Updated: Sunday, April 13, 2008″, but I just got an email today. Moreover, I haven’t filed a correction form since back in February and I *did* get an updated SAR back then. What I’m saying is, there was no reason for the Department of Education to send me this.
+ The kicker? My new EFC is significantly lower than my previous EFCs.
+ Do you have any idea what’s going on here?
+ Check with one or more of your schools - the Department is saying that they submitted some additional data to adjust your FAFSA
+ Crystal writes in: I intend on going to McNally Smith College of Music, right? And it’s 21000 a year. I filled out a FAFSA and got not even half of the tuition costs and therefore need to get loans.
+ My mother says she has bad credit and she doesn’t think we can get any. What do we do?
+ Fed Sub Stafford Loan: $3500
+ Federal Pell Grant: $2981
+ Federal PLUS Loan: $3380
+ MN SELF Loan: $7500
+ MN State Grant: $3801
+ My mom and I figuered out the cost of going to McNally for a year, and the cost is $30,000.
+ So if I minus the amounts for the loans and grants that I can get, that leaves $8,838 left over that has to be payed for. Granted, I’m going to try for scholarships, but if that doesn’t happen I suggested that we get another loan to cover that. My mother said that was not a good idea and thinks that I won’t be able to afford the payments on the loans after I graduate.
+ Is getting another loan a good idea or a bad one?
+ Okay - the MN Self Loan is a private student loan
+ You can legally expand the PLUS loan up to the cost of education, to cover all costs
+ When you group non-loan aid together, you basically need to make up $23,218 in costs
+ Do the math to see if the Self loan is a better deal than the PLUS loan - PLUS loans are 8.5% fixed, MN SELF is 3 month LIBOR + 2.7%

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+
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Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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
+ Graduate Center
+ 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.

Technorati Tags: financial aid financialaidpodcast

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

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+
+
+

Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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.

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

Technorati Tags: financial aid financialaidpodcast

FAP789: PLUS Loan Moral Hazards, Free Stuff Friday

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Student Financial Aid News
+ NASFAA: HR 5715 approved - going through final phases now
+ Increase Annual and Aggregate Stafford Loan Limits
+ The bill would increase the following loan amounts for loans first disbursed on or after July 1, 2008:
+ Increases the additional unsubsidized Stafford annual limits by $2,000 for independent undergraduate students, and for dependent undergraduate students whose parents cannot borrow PLUS, but appears to reduce the additional unsubsidized limit for teacher certification to $6,000 for “undergraduate” students
+ Increases unsubsidized Stafford limits for dependent students by introducing additional unsubsidized amounts of $2,000
+ Increases aggregate unsubsidized loan amounts for undergraduate dependent students from $23,000 to $31,000 (minus subsidized borrowing) but does not appear to extend additional unsubsidized funds for preparatory coursework or teacher certification for these students.
+ Increases aggregate unsubsidized loan amounts for undergraduate independent students from $46,000 to $57,500 (minus subsidized borrowing)
+ Beginning July 1, 2008, the bill would allow parents to choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.
+ Special Provision for Parents Delinquent on Mortgage Payments
+ The bill would allow lenders to consider parents eligible for PLUS loans even if, during the period January 1, 2007, through December 31, 2009, the parents are or were:
+ No more than 180 days delinquent on a mortgage payment on their primary residence
+ No more than 180 days delinquent on any medical bill payments
+ No more than 89 days delinquency on the repayment of “any other debt”
+ The bill temporarily authorizes the Department to purchase FFEL loans originated on or after October 1, 2003, provided those purchases do not result in any cost to the federal government. The Department’s authority to purchase loans under this provision expires on July 1, 2009.
+ The bill would stipulate that if the Department acts as a secondary market lender, it must ensure that any proceeds paid to a lender are used in a “manner consistent with ensuring continued participation of such lender in the Federal student loan programs.” In other words, it would prohibit lenders from using those proceeds in any other way than ensuring they continue participating in FFELP.
+ Some massive changes, and I guarantee, some massive opportunities for loopholes as well, as these provisions contain opportunities for less than ethical behavior, like dumping delinquent borrowers on the Department and leaving them there
+ I still take issue with the whole rewarding bad behavior by allowing delinquent borrowers of mortgages to take out more debt in the form of PLUS loans - this is moral hazard, or encouraging people to behave irresponsibly
+ Here’s an abuse scenario just waiting to happen: Parents whose credit would otherwise deny them a PLUS loan take one out under the expanded, more lax lending standards
+ As part of due diligence, they fail the standard PLUS loan credit test
+ A lender marks them essentially as a high risk borrower
+ The lender holds the loan until the last quarter before the Department’s authority to purchase loans at present value ends - Spring of 2009 - then sells off the loans to the Department at present value, which is the loan plus accrued interest for those nine months
+ If you use a standard amortization table at 8.5%, 9 months of interest accrued on $30,000 is $1,890. If a lender can afford to hold onto high risk borrowers for 9 months, they can earn nearly $2K per high risk borrower at absolutely no risk because the loan will be flipped to the Department before the clock runs out
+ Does anyone besides me think this could be a problem for the taxpayer down the road?
+ I suppose www.ParentPLUSLoan.com is about to become one of our most popular web sites…

Scholarship Update
+ The Collegiate Inventors Competition is a national competition that recognizes and rewards innovations, discoveries, and research by college and university students and their faculty advisors. The Competition encourages students who actively pursue invention. Students frequently come from science, engineering, mathematics, and technology studies but creative invention can emerge from any course of study. The Competition also recognizes the working relationship between a student and his or her advisor. The program was introduced in May, 1990 and is operated by the National Inventors Hall of Fame Foundation.
+ Up to 15 finalists will win an all-expenses paid trip in Fall 2008 to present their work to a panel of expert judges. Each finalist or finalist team will also receive $2000. One Undergraduate and one Graduate winner or team will each receive $15,000. One Grand Prize winner or team will receive $25,000. Academic advisors of each winning team also receive a cash award.
+ Deadline May 16, 2008
+ Details at our free college scholarship search site

Free Stuff Friday
+ Realtime traffic data in Google Earth for major roads
+ Insanely cool! Google Maps has street view turns!
+ Juicy Juice sippee cups for parents of young children
+ Your local Starbucks has free music cards
+ If you’re a fellow podcaster, IODA Promonet is a great source of music for your show
+ Lifehacker has a hack for free Wi-Fi - warning, there might be consequences
+ Men’s Health has four free video workouts for your iPod or computer
+ Great presentation by Clay Shirky at Web 2.0
+ If you ever find yourself making presentations for school or work, watch this video by Garr Reynolds

Free Song of the Week
+ Ronn McFarlane
“Indigo Road” (mp3)
from “Indigo Road - Original Lute Music”
(Dorian Recordings)

Buy at iTunes Music Store
Buy at Amazon
More On This Album

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+
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+

Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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.

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

Technorati Tags: financial aid financialaidpodcast

FAP784: Local Scholarships, PLUS Loan Borrower Protection Act

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Student Financial Aid News
+ Inside Higher Ed: Momentum has been building for the federal government to take increasingly aggressive steps to wade into the student loan markets, even amid continuing disagreement about whether and/or how serious a crisis there really is. At the urging of lenders, lawmakers have moved from merely seeking to ensure that there are alternative providers of student loans, so that students do not lose access to college, to calling for outright financial assistance for banks and other loan providers.
+ Under the proposal, which was described in an e-mail message sent by a Senate aide that was shared with Inside Higher Ed, the Education Department would commit to buying “from time to time any or all of such loans originated or purchased by” any lender that so desires, at the face value of the student loan. The plan would then allow the lender to repurchase “any of the loans sold to the Secretary” within a year “upon the same terms and conditions” under which the department bought the loans from the lender. The arrangements, known as “standby loan purchase agreements,” would be possible through July 2009.
+ The proposed arrangement could also enable lenders to pick and choose which loans they decide to sell and buy back, potentially resulting in a situation in which lenders hold on to their safest and most profitable loans (those they are likeliest to be able to sell to traditional investors in the credit markets) and to “dump” their riskiest loans, and those most likely to go into default, on the federal government.

Scholarship Search
+ Another site restrictor search
+ States have domains for their schools
+ Example: scholarship site:k12.ma.us
+ Example: scholarship site:boston.k12.ma.us
+ You will find a decent number of local scholarships and local information

Opinion
+ Commentary on the PLUS Loan Borrower Protection Act

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+
+
+

Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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.

Technorati Tags: financial aid financialaidpodcast

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

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+
+
+

Direct MP3 file download: Click here to download the MP3

Reminders
+
+ 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.

Technorati Tags: financial aid financialaidpodcast

FAP727: CLC exits, Free Stuff Friday

Listen now:

Student Financial Aid News
+ Chronicle: Fifty states, the federal government, and thousands of American colleges and universities are about to face a test of their commitment to higher education, at a time when the country is under economic stress and high-school graduating classes are about to crest.
+ While the official “recession” label has not been used, the news broke on Wednesday that the American economy slowed to a crawl in the last quarter of 2007, growing only 0.6 percent. That’s not the negative number of a recession, but a lower one than many economists expected.
+ HEWI: The College Loan Corporation (CLC), the 8th largest FFELP lender, has decided to exit the FFELP business, effective March 1, 2008.
+ In a statement to HEWI from Cary Katz, the company’s CEO, Katz states that “recent Congressional action has decimated the Federal Family Education Loan Program, essentially making it impossible for midsized companies like College Loan Corporation to participate in the federal loan marketplace. In addition, continuing disruptions in the credit markets have compounded the impact of the legislation. After careful consideration, College Loan Corporation will cease making new FFELP Loans on March 1, 2008. We will honor all second and third disbursements to our customers and continue to manage our existing loan portfolio.”
+ If you are a CLC customer or attend a school where CLC is the preferred lender, the Student Loan Network is happy to help you, too
+ Stafford federal student loans at StaffordLoan.com
+ Parent PLUS loans at ParentPLUSLoan.com
+ Student loan consolidation at StudentLoanConsolidator.com
+ Private student loans at AlternativeStudentLoan.com
+ Personal finance first aid kit

Scholarship Update
+ Deadline April 15, 2008
+ Applicable Schools: Any regionally or nationally accredited college, university or vocational school.
+ Participants must maintain a blog at the ProgressiveU website during contest period in order to be eligible. Winners are based on total accumulated points as of June 30, 2008 with points awarded for each blog entry and comment accepted for posting to the website and for each read of a participants blog entries by members and visitors.
+ Contest begins February 15th, 2008 and runs through June 30, 2008. Users must be registered by April 15, 2008 in order to be eligible for this semester’s contest.
+ Details at our free college scholarship search site

Free Stuff Friday
+ Personal Task Manager for Windows
+ Sun Presentation Minimizer
+ Vidalia + Tor
+ PixelCryptor
+ Put Vista on a diet with vLite
+ Flickr on your desktop with 1001
+ 13 most overlooked tax deductions from Yahoo Finance

Did you enjoy today’s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+ Click here to subscribe for free by email
+ Click here to subscribe for free in iTunes
+ Click here to add the Financial Aid Podcast to Google Reader or your Google Homepage

Direct MP3 file download: Click here to download the MP3

Reminders
+ Student Loan Network $10,000 Scholarship - Apply in 32 seconds or less!
+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ Discuss this episode at the Financial Aid Forum!
+ Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook
+ FAFSA form tutorials and free help at FAFSAonline.com
+ Stafford federal student loans at StaffordLoan.com
+ Student loan consolidation at StudentLoanConsolidator.com
+ Private student loans available at any time - visit AlternativeStudentLoan.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.

Technorati Tags: financial aid financialaidpodcast