FAP323: MRU Co-Founder Raza Khan interview, LONG show today, consolidation, 529s, deficit, $114M scholarship, welcome aboard, Matthew Ebel

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Welcome to Podcasting!

Hello there! For some of the audience listening today, this may well be your first time listening to a podcast, and I welcome you to the revolution of new media. There are two things that I think make podcasting special. First, unlike traditional media where everything is measured in commercial breaks, we can afford to go beyond the 30 second sound bite and delve into things.

Second, and most important, podcasting is a two way conversation, so as or after you listen to today’s show, I invite you to subscribe to the podcast and to participate in it by submitting comments and discussion at my web site, www.FinancialAidPodcast.com. You can also send email to financialaidpodcast at gmail dot com, leave voice comments on our comment line at 877-328-1565 x529, or again, right on the web site. If you enjoy today’s show, please tell a friend or colleague about it.

Student Financial Aid News
+ The Senate will consider two bills this week that include provisions that would extend and expand tax benefits for college students and their families. The provision in the Pension Protection Act would eliminate the 2010 “sunset” date on the federal tax exclusion for qualified distributions from a 529 plan. The provision in the Estate Tax and Extension of Tax Relief Act would provide a tax deduction of up to $4,000 for postsecondary education expenses instead of claiming Hope or Lifetime Learning tax credits. The deduction would be available even if a taxpayer does not itemize.
+ “A growing number of states are adding federally insured certificates of deposit to their 529 college-savings plans to attract more-conservative investors,” The Wall Street Journal reports. “While a few states have offered savings accounts in their 529 plans, Ohio last year was the first state to offer a 529 certificate of deposit. In recent months, several states, including Virginia, Wisconsin and Missouri, have unveiled similar plans, and more announcements are expected this fall.”
+ “Only 3 percent of community college students who transfer get into elite universities, according to a recently released study by an alliance of university researchers and higher education foundations,” the Flint Journal reports. “It’s even harder to get into the nation’s private elites - the Harvards, Yales and Dukes - where fewer than one in 1,000 current students are from community colleges, the study found.”
+ Student lenders are backed up with consolidation applications thanks to borrowers who were prompted to lock in lower interest rates prior to a 1.84% rate increase in July.
+ Even though the lenders consolidated a great deal more loans in 2005, many 2006 applications have yet to be processed and may not be funded before the fourth quarter.
+ A reminder - if you applied at StudentLoanConsolidator.com before July 1, you are still eligible for last year’s rates. Give us a call at 877-328-1565 or visit StudentLoanConsolidator.com to finalize your application.
+ The federal government keeps two sets of books. The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005. The set the government doesn’t talk about is the audited financial statement produced by the government’s accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.
+ Finally, colleges are adding warnings about Facebook and MySpace to orientation, everything from sexual predators to not posting photos of last week’s frat party. Remember - the whole world is watching.

Scholarship Update
+ The National Science Foundation Graduate Research Fellowship
+ 1,000 awards worth $38,000 per year each - that’s $114M
+ 3 year fellowships in the mathematical, physical, biological, engineering, and behavioral and social sciences
+ Open to college seniors and first year graduate students
+ Deadline November 1, 2006
+ Details at our free student scholarship search web site
+ Search term today: $100,000 scholarship deadline

Expert Interview
+ Interview with Raza Khan, Co-Founder of My Rich Uncle and MRU Holdings, Inc.
+ Raza graduated from NYU and was named one of Tech’s 2006 Best Young Entrepreneurs by Businessweek magazine
+ Introduction and background
+ One of the hottest discussion topics in financial aid is your 2 page ad in the New York Times. Could you go over what your overall strategy is behind this campaign and why did you choose this approach?
+ What reaction have you had to the campaign, and does the reaction you’ve received match the expectations you had for the campaign before it ran?
+ A few financial aid administrators also contributed some questions for the show as well.
+ Pam Stimpert from Ashland University asks, “How many examples do you have to substantiate your statements?” and follows up with “What sources of information did you use in crafting the campaign?”
+ Dr. Ellen Frishberg from Johns Hopkins University asks, “When MRU started out, your business model was giving loans in exchange for future earnings. What happened to that business model?” and follows up with “Who provides the funding (source of capital), who provides the origination and servicing for their loans, and where/when do they get sold? I was unable to tell from your web site.”
+ Francine Jackson of Harrisburg University asks, “Did you anticipate that this strategy could potentially cause some students not to attend college because they now can’t trust their financial aid counselor?” and follows up with “What options can you provide to a student that will be in their best interest?”
+ Why does total cost of education continue to rise so rapidly compared to inflation, and is it sustainable?
+ Finally, a bit of a challenge. Imagine for a moment a world where tuition was what it is today, but that world has no scholarships or student loans. Other than working full time, what ways could a student or family pay for college?
+ Thanks to Raza for being on the show, and thanks to Francine, Ellen, and Pam for their questions

Podsafe Music
+ Matthew Ebel, This Too Shall Pass
+ Music via the Podsafe Music Network
+ Stop by our MySpace page!

Reminders
+ Student loans available at any time - visit AlternativeStudentLoan.com
+ Get a federal student loan at StaffordLoan.com
+ Consolidate your student loans at StudentLoanConsolidator.com
+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ The Financial Aid Podcast is a publication of the Student Loan Network.

Questions? Comments? Suggestions? Email me at financialaidpodcast {at} gmail {dot} com, visit http://www.FinancialAidPodcast.com, or call 877-328-1565 x529. Add me to your iTunes by visiting http://www.FinancialAidPodcast.com/subscribe/

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