Posted On: 2005-09-20Length: 28:02
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Good morning. It is Tuesday, September 20th, 2005. Got a great show for you today. Got a show that might get you an extra 500 bucks, so you would want to stay tuned to this one. Got so much podsafe music that I don't know where to begin so let's get to the news first.
Top of the news today: Bankruptcy laws change on Oct 17. As you remember from the debt podcast interview we did a couple of months ago with James Flesh with the bankruptcy laws are changing. If you are investigating if this is an option, for rescue you from your financial situation, you will need to do it soon. As a reminder, student loans are exempt from any and all bankruptcy charges especially when it comes to federal student loans, the reason for that is that the government is effectively the lender on those and the government does not cancel its loans easily. US education secretary, Margaret Spelling has announced a formation of a national commission on the future of higher education. It is convened with the former presidents of colleges and a whole bunch of CEOs and executives from industry, especially from high tech companies such like AutoDesk and IBM. Concerns over the commission by colleges besides the fact that they weren't told that it existed, leads heavily towards corporate influences, which, if you think about, makes a lot of sense if America is endanger of losing its competitive edge, these corporations will be the first to ones to feel the pain when it comes to talent lost, because they need American innovation, they need American students and graduates with great skills to remain competitive in the market place. IBM and these other companies maybe multinational companies, but they are still based, and headquarted in the United States, a lot of research and development is done here so it is in their best interest. And it is in everyone's best interest to keep college competitive, when it comes to education. How we as a country will decide on how to educate our students in very, very early on, all the way through postdoctoral phase. An additional study by the National Association for College University Business Officers shows that colleges are starting to out source just about everything they can get their hands on. Colleges in the past have outsourced things like bookstores, food services and technology but are now starting to outsource, teaching, research and public service. This is a disturbing development in the sense that you have to start wondering what you are paying for then if a college is outsourcing everything, not just, food services have been outsourced forever and anyone who has been to college dining hall will tell you that it has always been outsourced probably to the lowest bidder. But the idea of outsourcing teaching and research is deeply disturbing because it is sort of the core of what colleges do and if they don't to that, then there is really no reason to have a college.
Alright, let's do some podsafe music. As many of you know, and have been playing around on myspace which is an interesting little website, myspace.com, looking for artists who are interested in making their music more podsafe and trying to get them to drop by the podsafe network. Well if you have and those few who have, we are going to try and give them a spin and let them know that there are people out there watching.
Alright, let's talk about how you might have missed out on $500 last year. This is important for anyone who files taxes and is working with federal student aid of any kind. There was a study done by the government accountability office, the investigative arm of Congress taking a look the tax credits and incentives for college students and families who have children in college, the report, a link to which I will put in the show notes, basically covers a whole bunch of different ground and comes with a few conclusions. Federal grant and loan programs tend to help students from low income families, which of course makes perfect sense because it is geared to do that. Applying for and receiving tax credits requires more work and effort on the part of families than getting other forms of financial aid does also fairly obvious conclusion, This from the Inside Higher Ed website, a very good website. I would recommend it. Insidehighered.com if you want to take a look at it. One of the things that is so obscure about financial aid and financial loan programs is that there are a lot of tax credits. There are the Hope credit, the lifetime learning tax credit these are the things that when you are doing your taxes, preparing your taxes each year, you need to take them into account and apply for them because they can reduce your tax profile very significantly. A few things from this report. More Americans claimed their tax credit and their tax reduction 2002 than received their federal grant or loan on one of the programs governed by the Higher Education act. In general, recipients of tax credits were from higher income families than from recipients from federal grants and loans, although a majority of tax filing claimed the Hope and Lifetime learning tax credits. The majority of those had incomes of under $40,000 a year. About 77% of the tax filers whose returns were examined were apparently eligible for one of the three federal tax breaks for college expenses, but 27% of those representing about 375,000 people did not claim one of the tax preferences. The average amount taxpayers would save was $159 but 10% of them would have cut their tax payments by at least $500. The agency's report said that the suboptimal use of tax credits can be blamed on the complexity of, well, taxes. Taxes are not a simple thing to do at least when you want to try and maximize your savings. It requires, filling out your taxes requires a lot of expertise of or a lot of experience doing it because there are a lot of different ways to play with the numbers so that you get the best outcome. As a result, it is hard to determine the effectiveness of tax credits when it comes to education and this is the report's conclusion for Congress, it is hard to determine the effectiveness of these tax credits because so few people are using the tax credits to the maximum extent. What this means for you as a student or a family, is that when it comes to tax time, and that will be coming up fairly soon, four or five months away which actually is not all that long. You need to take, spend a lot of time taking a look at your taxes and take a look at you taxes, taking a look at how different tax credits are applied the Hope credit, the Lifetime learning credit, you can also remember to deduct student loans, you can deduct the interest paid on student loans from your adjusted gross income which does have the net affect of reducing your tax profile so make sure that you are doing that and taking advantage of that, consolidate your student loans then you know