Posted On: 2005-10-18Length: 29:56
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Good morning it is Tuesday October 18, 2005, episode 94 of the Financial Aid Podcast my name is Chris Penn and I welcome you to the show, if you are just joining us and welcome back if you are returning. Only six more episodes until episode 100 so I need to think of something to do for episode 100; because that is a pretty good milestone reaching episode 100 of anything really. Network television shows routinely have big celebrations involving cake and things for episode 100; usually they get canceled shortly thereafter as the folks at Angel found out. Let's see what is going on today, I am back in the office today, so we are going to cover a lot of stuff, we've got a lot to talk about with the new bankruptcy laws that took affect yesterday and how bankruptcy affect student loans one way or the other. Got some great new Podsafe music I went through over the weekend and basically pulled out all the Podsafe songs out of the Podsafe Music Network that were rated four and a half stars or above but no one had played them yet, so I am going to try and start it up spinning some of those and see if the casual listeners reviews really match up with the hits that are in there or not, so we'll find out. Last of course it's still raining, we had about a day and a half of sun and now it's raining again, unbelievable how much rain we are getting.
If you tuned into the feed over the weekend, you saw the first experimental episode of a Financial Aid Video Podcast and let me tell you that little six and a half minute clip or so took the better part of eight hours to put together between the aligning all the titles getting the various pieces of clip art and doing the recording and the capturing and the rendering all that stuff, it's just an incredible amount of time. I do not foresee that on a regular basis, it's just the time commitment and-I'm really not that thrilled with the video output in terms of quality, I especially was not real happy about the sound, I have a fairly nice JVC GS-120 camera that I can used, this time I just used as a digital still camera that a little m-peg movie feature because I didn't want to spend a lot of time re-rendering. Maybe if there is some topic that can really only can conveyed visually, maybe we'll do a video podcast for that, like a sight seeing tour or something like that; beyond that the time commitment is too much and it would eat into other stuff that is right now more important. I hope you enjoyed it, if you are a band or a member of a band, and you have music video that you would like to have played eventually on a video podcast, I would certainly willing to sit down on a Saturday or something string together a bunch of videos, kind of like you know what MTV was like when they played music videos? That would be okay, because when you are doing that it's just the amount of render time just drop all the clips into an imovie and hit render and come back the next day and its done. So if you are in a band and you have a music video, I would be more than happy to play it. Just let me know e-mail me at email@example.com also if you saw the video podcast I would love your opinions one way or the other firstname.lastname@example.org and let's get started with the actual news.
In the news today, a lot of interesting things over the weekend, actually last week the Higher Education Commission, it's the Secretary of Education's Commissions on the Future of Higher Education, convened it was the first of these meetings. It's basically sort of a think tank almost talking about the future of Higher Education in the work force in America, and what America can do to remain competitive. Very interesting quote from this meeting, well a couple of quotes; James Hunt the former fourth term North Carolina Governor, said, " I hope that we begin by looking at what the Nation's needs are before exploring detailed inner workings of Higher Education." He launched into a litany of statistics showing the hemorrhaging in the educational pipeline. "In which of every 100 9th graders, 68 graduates from high school, 48 immediately enter college as freshman, 27 return for a second year, and just 18% get an associates degree within three years or a bachelors degree in six." I don't know where he got these statistics but if they are true, that is just astonishing. Out of every 100 high school freshman only 18% of them get a bachelors degree? So the other 82% just don't? That is stunning, it's like wow, where are we falling down? Another interesting quote from the meeting Nicholas Denofia, the Executive Vice President for Innovation in Technology at IBM, launched a little bit of a warning shot across the American Education's bough. He said, "Companies like IBM have alternatives if American Education can't do a better job producing technologically skilled graduates. We want to see America continue to be great, but it is naïve to think that competitors like China and India aren't doing something better as they ascend the economic ladder." He said in an interview after the meeting, his comments were not meant as an idle threat. It's a warning from a company whose first name is International, IBM, International Business Machines; "too often in America we look inwardly and we need to understand that the competitive scene is global and if America can't step up to the plate, someone else will."
Very interesting comments there from the Secretary's Higher Education Commission. In more financial news, the Tallahassee Democrat has an interesting article about the expenditure of what's called "net checks," basically if you get Federal Financial Aid, you get a check at the end of the process, the end of the disbursement which is the money you have to spend after educational expenses after the schools taken their cut after fees and all those things. The check that you get, if you get one is called the "net check," and it's a quick study to see what people do with it. According to the Tallahassee Democrat, basically most students just out and shop with it, spend it on frivolities, which they don't any of it a side for unforeseen expenses during semester, and they chew through it usually within the first three days of getting it. Which is pretty shocking, one quote from a junior at FSU said, "I'm going to try and buy a car with this money as my down payment. What ever is leftover is for anything I want, I need an X-box, an Ipod, some new Jordans, and some new shoes." Bear in mind a lot of that money if you do get a net check a lot of that money is student loan money. The 70% of financial aid today is in a form of student loans so you are basically spending that money that you are going to end up repaying for a long time afterwards. Just keep that in mind if you are a person who gets those, generally speaking you want to have-you want and try to set as much of that a side for unexpected expenditures during the semester. If you find that you additional supplies for class or you find that plan doesn't work out or if there is a trip of some kind during the semester that would greatly enhance the course that you are taking, that would be a good use for that money. Certainly not for consumables, this is apparently where the most money is being spent; interesting news there from the Tallahassee Democrat. All right let's kick off today with some Podsafe music we are going to start off this morning with Fat Records Tony Slide, " Justified Black Eye," from the Podsafe Music Network.
New music from Fat Records that was Tony Slide, "Black Eye," from the Podsafe Music Network. I want to talk about something that happened yesterday, yesterday via the debt podcast a couple of podcasts ago talking about the news, new bankruptcy laws took affect yesterday. I want to talk about how those affect student loans and student financial aid. Basically speaking, the bankruptcy laws do two things, make it harder to actually go into bankruptcy with out basically paying back all of your debts and makes all student loans, whether they are Federal or private non-dischargeable. Effectively there are a couple of loop holes, but they are very small ones but for the vast majority of people who would be looking to declare bankruptcy, it is not going to help them. In terms of eligibility this is a question that has come up a lot, whether a bankruptcy will affect your eligibility for Federal Student aid, and the short answer is maybe. Let's talk about that , what it affects first of all if you declare bankruptcy it is either a seven or a ten year black mark basically on your credit report and when a lender sees that they basically walk away immediately kind of situation. Bankruptcies, defaults and judgments are big bright red flags that say this is not a credit worthy borrower and extending credit to someone with a bankruptcy on record is very risky, and if you do get a loan, chance are it will be the industry calls sub-prime, honestly we just call it, hose you on interest rates and fees and things like that. Credit based loans, credit based student loans such as the PLUS loans and any and all alternative student loans are going to be inaccessible to you if you declare bankruptcy. The ACT Education loan is included with that. Now with PLUS loans, if a parent has a bankruptcy, there is no affect on the student unless the parent is the only available co-signer. If you are a student and your parents declared bankruptcy you can PLUS loans from someone else and still get PLUS loans from an aunt or uncle, or brother, you name it, anyone else who is credit worthy. A worthy co-signer can get you that PLUS loan the same is true of the ACT Education loan; any other credit worthy co-signer can get that for you. If you are the one who is declaring bankruptcy again, the PLUS loan your parent would be able to get for you if you are an undergraduate student, because the PLUS loan is actually out in the parent's name, not in your name, so you do not appear on the loan at all. ACT Education loans are a different matter because it's effectively the parent just co-signing but the obligation is still in your name, you would probably have a tough time getting it that even if your co-signer was not in bankruptcy. If your co-signer had good credit, a bankruptcy is such a gigantic warning flag. If you are financially considering bankruptcy as an option, try to avoid it whenever possible. It's not a good thing to have on your credit record because it basically closes a lot of doors immediately. A lot of lenders won't even give you a second look or even reconsider-ehh, no loans for you. Bankruptcy will also affect any other credit based assistance or services that you might get a hold of. For example, things like your cell phone bill, your cable bill, a lot of those services now do a credit check and if they see a bright red flag you are going to get less favorable terms on payments and plans, be aware of that.
What a bankruptcy does not affect? Bankruptcies do not affect your eligibility for Stafford loans, Perkins loans, Pell Grants, and if a parent goes into bankruptcy it does not affect the student's eligibility for ACT Education loans or any other alternative student loan, provided the student has another co-signer who is credit worthy. It also does not affect you in any way for student loan consolidation. The exception there is that if your student loans are in default, they need to be rehabilitated first before you can consolidate them. Having a bankruptcy on your credit report has no impact on your eligibility to consolidate simply because student loan consolidation does not require any kind of credit check. One other important thing to note on the whole bankruptcy thing is that bankruptcy does not affect; you can not be declined for non-credit based student loans solely on the basis of having a bankruptcy in your history. So if you are going back to school and a financial aid officer sees in your history that you have a bankruptcy, you can not be turned down or declined for a non-credit loan because you have a bankruptcy on record. You can be turned down or declined for other reasons, but just having a bankruptcy on your credit does not make you ineligible for Federal student loans that are not credit based. Again, Stafford loans, Perkins loans, Pell Grants, alternative student loans where neither you nor your co-signer is in bankruptcy and student loan consolidation. The new bankruptcy laws do not affect your eligibility for those and having a bankruptcy on your credit history also does not impact your eligibility for those. That's the quick bankruptcy report there. All right let's move on to another piece of Podsafe music. We are going to do let's revisit Rebecca Lobey with "Grace."
New Podsafe music from Rebecca Lobey that was "Grace." All right let's do a quick scholarship update and today's scholarship update will actually be a Scholarship Search Secrets keyword and the key phrase really, is tuition remission. This is a phrase that is not quite industry jargon but it's also not generally used phrase, not something that you would hear outside of boring human resource documents but it is important. What tuition remission is it's a type of scholarship that is sponsored either by your employer or by charity or foundation of some kind and tuition remission basically says, okay we are going to pay some or all of your tuition for course work that is related to what ever it is the sponsoring organization wants. For example if you are working at a company-let's say you are working at a student loan network and you are in customer service and you wanted to go take a course at UMS on basic accounting so that you can better understand how people with their finances when they call in about a student loan. You could take your course at UMS Boston and then take the tuition bill and remit it to the office here and assuming that it was approved, you would then have your tuition paid for by the Student Loan Network. That works out pretty well; most employers have a tuition remission program of some sorts. If your employer does not consider it because it's a great benefit to employees and it's a great benefit to employers as well because they get better trained workforce, a more skilled workforce. In addition to finding scholarships this is actually kind of neat twist on it, you can create a scholarship in affects by getting your employer to sponsor a tuition remission program. It can be in whatever areas that employer has the greatest need for, so if your company is having a lot of trouble maintaining good technical staff, well there are some good people who are fast learners but just need some training, they can go out and take some courses and have the company pay for it, and they can have an agreement as part of the contract saying that if you take this course and we pay for it then you either have to pay it back or remain employed with the company for "X" number of years or pay it back on this schedule. It doesn't have to be a free get training program that employees are then gone and seek better jobs. That's a way of creating your own scholarships in affect is finding a way for you company to sponsor it. Likewise, it's always worth asking your employer if you are fully employed with someone, to sponsor your education in return for whatever a things that you can provide for that employer, anything from free publicity. For example let's say you worked at small independent record label, and you were going to Northeastern University, well that record label may only have five or six artists and a couple of CD's but if you were essentially able to start a street team for them and use Northeastern University as your marketing grounds to get the word out about your employers products; then your employer could conceivably be more than happy to sponsor some or all of your education. That is create your own scholarship I guess as our scholarship update for the day. I will of course put a link in the show notes to-actually no I won't because I don't' put the Scholarships Secrets Search links in so that who don't listen to the podcast miss out. It's special just for people are subscribed, I will just put a little update saying that was today's. Let's finish out today's show with one more piece of Podsafe music I was going to do something by Jennifer Avalon, but I took a listen to it and you know that's kind of really odd, it's definitely my taste, I do at least try to play music that I would at least listen too a little bit. Let's do "Civic," by Uncle Seth, I've played Uncle Seth's music before and their music is pretty reliable in terms of goodness, so Uncle Seth, "Civic."
New Podsafe music from Uncle Seth, that was "Civic." That is going to do it for today's show, as always show notes you can find at www.financialaidpodcast.com if you are not subscribed to our podcast get subscribed it's really easy, directions are on www.financialaidpodcast.com you can also find us in the iTunes music store, if you have any feedback for today's show email@example.com is the place to send it, I will also gladly listen to audio feedback as well if you have any and if it's appropriate I will play it on the show. If you really like today's show or any of our shows please help by getting a couple of your friends to subscribed, again directions are on www.financialaidpodcast.com which is pretty straight forward and help us get the word out about the fun that is student financial aid. Also if you enjoyed any of the Podsafe music please look up the artists in the iTunes music store and commit to buying one their songs, its .99 cents per song and if you just buy one that will be more than enough to show some love for these artists who are giving away their stuff in the hopes of being recognized.Please do that, otherwise, until next time, so stay tuned, stay subscribed and we'll see you soon.