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Student Loan Consolidation Problems

Posted On: 2005-09-27
Length: 30:37

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Good Morning, it is Tuesday, September 27, 2005. This is the Financial Aid Pod cast. Welcome back, I guess just welcome back to me because everyone else has been back. I took the long weekend off to attend a conference, it was actually a Martial Arts Conference at www.newenglandwarriorcamp.com is the website, New England Warrior Camp out in Sudberry Massachusetts.

Absolutely beautiful weekend out in the woods to the whole bunch of very exciting training, learned lots of new stuff and had a chance to participate in a fire walk, which is where you walk over a bed of burning coals, burning embers from a fire, which is very exciting. The experience for me is really incredible. It's the psychological aspect of walking over something that's essentially still on fire that is the point of the exercise, because physics is actually on your side. Physics says that burning embers and wood in general is an extremely poor conductor of heat. If it was walking on the same temperature of iron or glass you would be incinerated in a flash. But wood, very poor conductor of heat; particularly if you're nervous as you would be. You kind of get a small vapor barrier from the sweat on the bottoms of your feet as well. The psychological aspect is the most important part and certainly was the highlight of the weekend. If you are interested in martial arts and you enjoy them, go ahead and check out newenglanwarriorcamp.com. It's open to the public, open to everyone. It happens once a year, usually in the fall.

All right we've got a lot to talk about today. Not too much mail, mainly because I haven't had time to catch up on my e-mail yet. I try and get the pod cast out the door before the day really gets rolling. Got some news and got a scholarship update and the feature, so let's go ahead and get started with the news.

A letter of complaint in the Johns Hopkins Student Newspaper, point out that Johns Hopkins did not point out the interest rate change and consolidation deadlines to students until well after the July 1 deadline. Many students were upset to find out that they could not consolidate last year's low rates, and instead ended up consolidating this year's somewhat higher rates. This year's rates are of course, about almost 2% higher. Similar article in the Tufts Daily, Tufts University newspaper points out students in debt, averaging between $18,000 and $20,000 at graduation with as much as $125,000 at the upper end. The article goes on to point out that the consolidation options are not really well explained to people, not pointed out. Students don't really have the information when they graduate about what to do when it comes time to consolidate loans; otherwise, many students have graduated this past May would have to consolidate immediately to take advantage of the interest rates before the major change. If you're looking for more consolidation information, make sure you sign up to our financial aid newsletter. It's an e-mail newsletter that comes out once a month, which is usually a special announcement in there as well mid-way through the month. The newsletter can be found at www.financialaidnews.com and it will have features and stuff about all the different ways you can save money. If you're looking for information specifically to student loan consolidation, go ahead and check out www.studentloanconsolidator.com and these links will be in the show notes as well. Which are at www.financialaidnews.com/blog or on the homepage of www.financialaidpodcast.com.

In the Sentonian, the student newspaper of Seton Hill, one article there was pointing out, Seton Hall University football recruits will continue to receive football scholarship funds regardless of whether they actually play on the team or not. I guess there's a contractual obligation between the player and the team, where the team is obligated to pay out scholarship funds whether the student makes the team or not, or whether the student plays on the team or not. This is causing quite a bit of outrage, with other athletes who receive scholarships which are revoked if the student doesn't play on the team; or for regular students who don't get access to the same funds. A) Because they don't play football, and B) they're upset. Understandably so because these students are getting financial aid and they're not meeting their obligation of playing football; interesting rumblings from Seton Hill University.

All right, let's do a scholarship update. Actually, you know what; before we do that, let's do some Pod Safe music. It has been really incredible out there in terms of all the wonderful Pod Safe music that is on the internet. It's from the Pod Safe Network, podsafenetwork.com. Let's start out today, let's do Natalie Brown with Let the Candle Burn.

(song)

Good way to get your day started some catchy music from Natalie Brown. Information for her stuff will also be on the show notes, I will put a link to her website and I'll add her music if it's in our tunes, to our tunes play list. I'm probably going to have at some point, as soon as I have a few free moments, put together a list of some albums. The actual CD's in our tunes that you can buy, because we have some great, great artists on the PodSafe music network that we featured on the financialaidpodcast.com. Really deserve not only recognition but also your support. You won't be disappointed by the quality of the albums and just by how really good they are as musicians.

All right now, let's get to that scholarship update. The ISC, the International Information Systems Security Certification Consortium, the non-profit international leader in educating and certifying information and security professionals is announcing is accepting applications for the ISC 2, Security Scholarship program for 2006. One year scholarships of up to $12,500 a piece will be awarded to four qualifying full time post graduate students pursuing an advanced degree in Information Security at any accredited university worldwide. So it's unrestricted worldwide availability. The scholarships may be consecutively be renewed if all criteria have been met or for multiple research project. The deadline is November 30, 2005. To apply interested students must submit a scholarship application form, under graduate and graduate transcripts, three character references and a proposed budget for using the scholarship award. Students must also include a certified statement from the faculty, advisor or institution confirming that the applicant is a post graduate student in good standing with the relevant department.

The applicant is pursuing a defined research project that has been approved by the college or university and the applicant's faculty, advisor and or institution will support him or her for any expenses the scholarship does not cover. Scholarship funds will be awarded based on the relevance of the recipient research to the ISC to compendium of industry best practices. Special consideration will be given to students who are associates of ISC 2 holders, or holders of the CISSP, Certified Information Systems Security Practitioner Certification and accreditation professional's credentials. All payments will be made directly to the Recipients College or University. To apply, go to www.ISC2.org/scholarship. And of course this will be in the show notes as well. You can find information about it there. All right that's the scholarship update for today, ISC2, Security Scholarship. Let's hit another piece of the PodSafe music, this one is from Rebecca Lobe with Over Again.

(song)

New Pod Safe music from Rebecca Lobe, available via the Pod Safe music network and of course artist information will be in the show notes as well. All right, let's talk about today's feature thing. I'm not going to do mail call today like I said I'm just not caught up on my mail. Let's talk about credit cards and especially about when to use your credit card and when not to use your credit card. If you have a student credit card if you're in school, or even if you're not in school. Ways to save more money every month by not blowing up your financial burdens with a lot of consumer debt.

Here are some tips. Tip number 1. Buy tangible only. Limit your credit card use as much as you can to items which are tangible. Good rule of thumb is that if you can't return it in 29 days; don't buy it with a credit card. Here's why, one of the fastest ways to reach unmanageable debt levels is to buy consumables on credit. It's really easy to buy food, drinks, and silly stuff with a credit card. Very few people keep rigorous track of the little things like lollipop, candy bar whatever. You know the two buck cup of coffee that you buy everyday or even twice a day, adds up to like $1800 at the end of the year. Pay cash for your consumables and reserve your credit card for hard purchases for tangible things; stereos, computers, whatever. You'll build up debt more slowly and manage it more effectively. If you can't pay cash, don't buy it. It's that simple.

Tip number 2. Keep a budget. When you go to school you expect hard numbers to reflect your performance; 93 in Biology, B-, B+ in math, all these things are rather tangible measures. Imagine your confusion if your professor simply issued grades like, ehh okay, or like, I guess you did fine. You wouldn't like that, it would be unacceptable. Yet most people manage their money in a haphazard way. You ask them how much money do they have, they'll say well, last time I looked at the balance at the ATM, I think it was like $300. I think it was $100. No, keep a budget. Know how much money you do or don't have. Then never spend more than you can afford. Consider in investing in some financial software like Quicken, Microsoft Money. There's free options like New Cash, or New Ledger, these are all really great tools for managing your money. Even if you don't go to that length, just keep a spread sheet. You want to know what's going in and what's going out. I don't particularly like the rest of the financial advice in the book. Rich Dad, Poor Dad, by Robert Kiyosaki, had one kind of view of finance, I though was really well thought out; an excellent way thinking about money.

Assets, liabilities, income, and expense, basically think about it this way, instead of going with traditional definition assets, things that bring money in; liabilities things that send money out. Income and expense are the corresponding things. You always want to have more money coming in than is going out. As much as possible and doing that by any legal means possible is a good thing; starting up your own business online, starting up your own business offline. There's no reason you can't do that. Working at a regular job, working as an intern, a paid intern somewhere; try and always make sure you have more money coming in than going out and that way you'll stay ahead of the finances. It sounds so simplistic, it's like when you teach a kindergarten kid but it's so hard to actually put into practice and that's really the key. Can you put it into practice? And if you can, you will be financially set for life. Follow that basic rule, more money going in than out. Simple as that.

No. 3, be very careful with cash advances when it comes to credit cards. Cash advances maybe a short term solution in an emergency, but unless you have the resources to make up for the cash advance within 30 days of requesting it, that solution is going to get real expensive real fast. Check with your bank or credit union about things like over draft coverage, interest rates for those are usually less steep than cash advances on the credit card.

Tip No. 4. Join a Credit Union. Credit Unions are probably America's number one best kept secrets, interest rates and savings accounts consistently higher than major banks. Services for members are far better than you're ever going to get at a commercial bank. I used to be a member of a major Boston area bank, before it got bought up by another bank from out of town and their customer's service, about the only thing they could have done that might have been worse as far as customer service was to actively stab me in the hand with the pen, you know the little chained down pen at the teller window. Other than that their service is hideous. A lot of credit unions have things like free financial advisors for members. You go in there; you sit down with your finances and say, "Hey you know I want to meet these financial goals." "Hey, I need some financial goals to aim for what a good goal is to have." The advisors will sit down and go through all sorts of stuff. Check with your University Student Services Offices about whether the University has a credit union and whether students are eligible to become members. Many university credit unions offer convenient locations on campus, at ATM's, if you are a part of what's called the sub-network, where there's no fees the ATM's, so you can go to any other sub ATM and not pay the fee. And of course internet banking or home banking, what ever you want to call it.

I used to work for a Credit Union in their data processing center and that's what really got me turned on to all these credit unions and what credit unions offer. They are really the best way to do banking, if you are looking for a brick and mortar bank. There's just no comparison between them and commercial banks, there really isn't. The services are good, the facilities are nice. I've been in some commercial banks where they spend the minimum amount possible to get by with conforming to basically a sanitary place to work and that's about it. Credit Unions go a little bit further in terms of giving their members a pleasant experience. Now, that's not true of all credit unions, I know there's one up in Salem Massachusetts, which was basically those roll out tables in the back of a bar at a Knights of Columbus Hall, but it met the need for what their customer's were looking for. Credit Unions check them out. See what's available. You can check out a directory of Credit Unions at the www.NCUA.gov is the website. Let me just check that out here, The National Credit Union Administration. Yes, www.NCUA.gov and you can find a credit union near you and figure out what the membership requirements are.

No. 5. Pay your balance in full each month when it comes to credit cards. All credit cards have interest rates of finance charges when you carry a balance. Pay your balance in full each during your grace period and you won't pay a dime in interest. Very important, if you are going to sign up for a credit card, make sure it has a grace period by the way. This is kind of like 5b. There are some student's credit cards where the interest rate clock is rolling as soon as you swipe the card and that's a very bad thing. Make sure that your credit card has a grace period and you know try and get a grace period as long as possible, 30 days is ideal. Credit card companies have been whittling away at the grace period; 28 days, 27 days this year, 26 days this year...and they're down now to like around 19 days. A credit card is a short term loan, so pay that loan off as quickly as possible. If you charge something on your card, pay it. Pay you balance in full each month and if you can, if you're able too, if you're financially well suited too, pay it off as soon as you get home. You know, you went out and swiped $200 worth of purchases at Wal-Mart or whatever, and you get home, log on to your home banking and say, "okay, make payment now." And it's done, you don't have to think about it at the end of the month, you don't have to worry about it at the end of the month, and you won't have a huge amount of interest accruing because it's already done, you're paid for.

Last one, once or twice a year, check your credit report. Your credit report can be polluted with just so much bad information and the only person who is responsible for your credit report is you. The credit bureaus are not, the lenders are not, they have their own interests they're interests are making money and they don't really care what your credit looks like, they'll make changes as required by law but they really have no responsibility when it comes to accuracy of your credit reports. So you are responsible for it. You can get a free credit report annually as required by law now. Visit annualcreditreport.com. One warning, the companies that are running this, you know the credit bureaus are going to try and sell you every last extra add on service that they can. You don't need it. If you want to, go right ahead, but you don't need it. Check it out, its www.annualcreditreport.com, it's open to anyone in the United States. You get one free credit report per year, unless of course you get turned down by a loan, in which case you are eligible for a credit report for up to 60 days after your decline.

So, six tips for saving you more money. You can find more information about this and any of the other types of things when it comes to consumer credit on our website, www.studentplatinum.com. There will be link of course in the show notes there as well. All right, let's see if we can squeeze in one more Pod Safe music.

(song)

Skirting by the very edges when it comes to playing those Pod casts, it's kind of a long one today but, a good one hopefully. That was Hollen Steel with Falling. You can find their information on the Pod Safe music network and of course in our show notes as well. All right that is going to do it for today's show. Ran a little longer than I expected too but that's okay these things happen. Check out the show notes, www.financialaidnew.com/blog, or at www.financialaidpodcast.com the show notes link is about in the middle of the page or so. Tomorrow probably more of the same, news, financial aid stuff, scholarships hopefully, mail call maybe, and of course PodSafe music, wouldn't be the same without all the really great tunes out there. As always stay tuned, stay subscribed, if you're not subscribed, get subscribed its super easy directions on financialaidpodcast.com and it takes all three to five minutes, if you already have iTunes, it takes that plus how ever long it takes that loaded and get installed.

All right we'll see you tomorrow, take care.

Discuss It!

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