FAP831: Need based financial aid, Free Stuff Thursday
July 3, 2008
Image via Wikipedia
FAP831: Need based financial aid, Free Stuff Thursday
Listen now:
Student Financial Aid News
+ Inside Higher Ed: A shift back to need-based aid isn’t hurting at least two colleges. In the last few years, some colleges have pulled back from the policies everyone else says they’d like to pull back from. Notably the sky hasn’t fallen (and neither have their admissions numbers). Consider the cases of Hamilton College, which completely eliminated merit aid to spend more on need-based aid, and of Tufts University, which imposed a limit on its use of early decision. Both colleges are competitive in admissions, with excellent academic reputations – but neither has even close to the endowment or admissions clout of Harvard or the other institutions at the top of the admissions pecking order.
+ IHE: Many University of Chicago graduate students will need to find new loans — quite likely under terms less favorable than they are used to receiving. The Chicago Tribune reported that the university has had to end its use of the “school as lender” program for graduate students because of the inability of the Illinois Student Assistance Commission to renew its line of credit. Chicago officials believe that the graduate students who have used the program will be able to find loans elsewhere, but will likely not find some key benefits of the old program, such as the lack of origination fees and a reduction in interest rates after four years of on-time repayment.
+ In some ways, what people were talking about legislating last year, the market has corrected this year
+ Prudence and caution are back in style
+ Had an interesting case yesterday when the computers would have said yes, I said no - and with good reason
Scholarship Update
+ Scholarship Idol SLN Scholarship
+ A Scholarship Points Contest
+ Watch the embarrassingly poor quality YouTube video
Free Stuff Thursday
+ Free cotton shopping bag
+ Free Snuggle fabric softener
+ Rhapsody free album with signup
+ Astroglide… uh, yeah.
+ Swurl is pointless fun
+ Make your Mac sing in Terminal
+ Joys of Summer Gift Pack - 50 ziploc bags
+ Free pretzel from Auntie Anne’s
+ Get lost a lot? Free Atlas
+ Sell Back Books - they pay you, including shipping
Free Song of the Week
+ David Usher, Kill the Lights
+ See the YouTube video
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
+ 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.
Preventing a financial aid disaster
July 2, 2008
I just finished talking to a listener of the podcast who wanted to take out a private student loan. I can’t get into specifics (non-disclosure), but let’s just say that approving this loan would have netted a nice chunk of change for the Student Loan Network, enough that it’s way, way past beer money, into new MacBook Pro territory. My listener has spotless credit and would have been approved by any lender with no issues.
I told them no.
They wanted to borrow over $50,000 for a photography certificate program from a reasonably prestigious college here in New England. Not a bachelor’s degree. Not even an associate’s degree. Just a certificate.
After a heartfelt conversation, I suggested finding a less expensive school and finding an apprenticeship with a master photographer to learn the inside trade of photography from a master, rather than from an overpriced certificate program. Photography is one of those professions where it doesn’t matter what your academic credentials are as long as you can take damn good photos.
Over the lifetime of the loan, they’d end up paying close to $120,000 in principal and interest for the certificate; upon graduation from the photography program, they’d immediately owe about $500 a month for the next 20 years - if interest rates remained relatively low.
Ultimately, approving our private student loan would probably have been disastrous for the borrower. Chances are, with just a photography certificate, they’d probably default on the loan down the road, and of course, except under exceptional circumstances, you can’t discharge student loans in bankruptcy, so it’s a debt they’d be saddled with for a long time.
This is where the system breaks down. Had they applied for the loan online, the computers would have done the math and probably calculated that with their current FICO score and financial background that the loan was okay and would have issued it.
The computers are wrong.
Yes, the surface details appear okay, but the loan has long term consequences that a credit approval algorithm can’t predict, and my listener would have put themselves in a terrible financial position, thinking everything would be all right because they were approved.
While I’m sorry that this cost the Student Loan Network some money in the short term, I know that it’s absolutely the right choice for the borrower and their family. Profitability is vitally important to my business, but so is not screwing over my friends for a buck.
This is also why it’s so important to have a good relationship with your financial aid administrator. The people who work in your school’s financial aid office can foresee things that the computers simply can’t. Ignore the sensationalism in the press about financial aid officers and go talk to yours if you need to borrow for school.
If you’re considering taking out a lot of money for school, stop and ask someone first. Ask your financial aid administrator, ask a trustworthy lender, but ask a human being, because once you sign on the dotted line, there’s no going back.
FAP830: Expert interview with Larry Wilson, Coastal Federal Credit Union
July 2, 2008
FAP830: Expert interview with Larry Wilson, Coastal Federal Credit Union
Listen now:
Expert Interview
+ Today we discuss credit unions, personal finance, and living within your means with Larry Wilson, CEO of Coastal Federal Credit Union in North Carolina.
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
+ 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
July 1, 2008
FAP829: GI Bill expansion, pirated textbooks, mail bag
Listen now:
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.
+
+
+
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.
How Overzealous Banks and Naive Borrowers Ruined the Economy
July 1, 2008
You might have heard that the economy is on a downturn. You might have even heard people throw away that dreaded “R” word (recession!). Well, we are not quite there yet, and it is up to the people to make sure we stay away from that. You need to know what you have to watch out for. The following are two things that you need to make sure you stay away from. Overzealous banks are something that requires your attention and being a naïve borrower is also something that is bad. In order to make sure things are going right you must be looking out for your best interests at all times. The best interest of the Nation is for a brighter economy.
Bad, Overzealous Banks and Lenders
One thing that has plagued people is bad companies who are letting you borrow money. There are banks and lenders out there who will help you secure loans, but they will be bad loans. These people will give you false information on the amount that you can handle, and they will make it seem like you can get a certain loan and truly afford it. They will also tell you that you will have no problem affording a house. Their thought process is that they are helping you now, and you can just sort the rest out later on your own. They do not view it as their problem once it has left their desk. Now, not all banks are like this, but you have to watch out for the ones who are. Some lenders may even skim some money right off the top of every mortgage. This is something that is illegal for them to do. Make sure that you are not aligning yourself with an overzealous bank or lender.
Bad Borrowers
Do not just believe that banks and lenders are the only people who are to blame in this process. Some of the blame falls on the borrowers as well. Some borrowers were so excited about the possibility of getting some money to use on a home that they rushed into a situation that had a negative result. They did not look at the terms and they did not take the time to figure out whether or not this was something that they could actually handle. They just took the money and ran, hoping that everything would turn out correctly. They should not have been shocked that they got scammed because they really did not manage their money or see how they would be affected. This is why whenever you enter into a situation like borrowing money you need to see how this will positively and negatively affect you. In the end you need to do what is right for you. The only way you can know what is right is by taking your time and not rushing into anything without paying attention.
Additional Resources:
bad banks, bad mortgage lenders, bad mortgages, economic troubles, economy trouble, economy troubles, overzealous banksLoan Calculator
 | ||
 | ||
 | ||
