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Adjusted Gross Income Analysis

Posted On: 2005-12-15Length: 32:24

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Good Thursday December 15, 2005 episode #138 of the Financial Aid Podcast. My name is Chris Penn welcoming you to yet another Financial Aid Podcast and all the fun we're going to have today. First things first, I'm trying to having new sound today, working with the AprilSoft C3 Multi-Band compressor. A few quick tests this morning showed that it sounded a little bit better than the previous podcasts I've done. Let me know what you think of it. If it sounds better, if it sounds worse, if it sounds like garbage at financialaidpodcast@gmail.com is the place to send your feedback. Going to talk a little about some Congressional legislation and hits the Pell Grant. A bad article in the E-college times, at least I think it's a bad article, How to Reduce Your Gross Adjusted Income, a new secret key-phrase for your scholarship search on the web, some mail bag and a quick tech tip and some Podsafe Music. We have a lot to do today so let's get started with the news.

Topping the news, the House of Representatives has passed a Compromised Spending Bill, we talked last month about the spending bill to basically keep education funding flat as part of the overall budget and deficit reduction act. The bill passed yesterday by the house, is a modified version of this, the compromise with the additional funding for some rural housing, but effectively the education portion of the bill has not changed which means that, among other things, the Pell Grant allocation, which in the previous legislation had no change to it, again has no change. So, the House of Representatives telling students everywhere, we don't think you need it anymore. You have enough money as it is. So, the Senate is expected to vote on their version of the Compromised Spending Bill today and then if both bills are passed, by the one in the House passed by only two votes so there's very clearly a thin margin here, if you're interested in lobbying you can contact your representatives, but if both versions are passed then they have to go to a joint committee for hammering out a combined piece of legislation and then vote on that as well. E-College Article Times has an interesting little thing about how to avoid student loans and it's ok. It's an article about, well it's not really ok because it doesn't say a whole lot. How to avoid paying off your student loans at least right away. Their first advice is to die. One sure fire way to avoid any student loans is death. You're dead, you don't have to pay anything back. Incidentally, that's not necessarily true. If you have federal student loans, that's true, if you have a consolidated federal student loans with a spouse, your portion of the student loan is dismissed but the whole loan itself, your spouse's student loan is retained. And private student loans, because they are effectively consumer loans, those may be passed on to your next of kin. So definitely read the fine print on any loan application, federal or private, before you sign it.

Other articles, join the Peace Corps, America Corps, the military, teaching and go back to school and pile on more debt. And, literally go back to school and pile on more debt, and that is their suggestion on how to avoid paying your loans. They forgot a couple of things. Now you know student loan consolidation, because even though it doesn't necessarily help you avoid paying your debts but it does reduce the amount you have to pay over a period of time and your monthly payment each month is reduced because you're stretching out the loan term. I was joking with one of my colleagues here at the office, student loan consolidation is kind of like diet student loan. It's all the education but half the monthly payment. That's not a bad way to think about it actually. The other thing, the article doesn't mention deferment or forbearance. Those are two avenues that are available to just about everyone who hasn't used them already.

There are things like childcare provider deferment, in-school deferment, education-related deferment. You can defer your student loans for up to 36 months. Get those forms from your financial aid office if you're still in school. If you're not in school you can get those forms from your lender or go to www.studentloanconsolidator.com and under section five, resources you should see a Forms folder that you can download, printout and send to your existing lender or to a new lender. Forbearance of course, there's a couple of different types of forbearance. I believe those are also available for 36 months or three years. Things like economic hardship, job lost, there's a variety of conditions that you can forbear. Combined you could put off paying your loan for up to six years. Now having said that, deferment and forbearance do not stop interest from building up. So once the deferment or forbearance ends, the interest that accumulated on the loan of course needs to be paid as well. So it's very important to know that if you use those tools, what they will do to your loans. The clock is still ticking on the loans. That's important. The other thing is that when it comes to the clock ticking, if you've used a deference or forbearance on a loan and you have not consolidated it yet, when you consolidate you're student loans, it resets the deferment clock, and it resets the forbearance clock. So if you used a deferment or forbearance again with a new loan because that's effectively that is what a student loan consolidation is. It's a new type of loan. You other loans are effectively closed out and paid off. So that's some useful information. Consolidating your student loan with the Student Loan Network is easy. www.studentloanconsolidator.com is the website to go to or dial us up 877-32-1565 and talk to any one of the wonderful representatives here in our call center. They are more than happy to hear from you. If you are rude to them they will make fun of you after they hang up. We've had a few of those people. Some people just call in for someone just to vent to because some of those stories that I hear coming off the phone lines just amaze me. Maybe some time I'll get one of the reps on and we can chat with them on-air about some of their customer stories.

FAFSA tips. Adjusted Gross Income is the number to be aware of when you are filling out your FAFSA. Also, by the way, it is the number you should be concerned about when you are doing your taxes, because it is effectively the amount you will be taxed on and assessed on when it comes to determining your financial need and the financial need of your family. So, how do you reduce your adjusted gross income? Here's how, the adjusted gross income, it effectively tells you how much money your make. So, the way to change that is to change, not change how much money you make, but change the appearance of how much money you make. You have to appear to make less money then you do and there are a couple ways to do that. Some things, like alimony and student loan payments on student loans, the interest on those by the way, those will reduce your adjusted gross income. Those come before any types of adjusted. The single best way to reduce your adjusted gross income, without reducing pay are pre-tax payroll deductions. Those can be 401(k)s, IRAs, employment plans, whatever. Those contributions to your retirement are taken out before taxes and are basically deducted from your adjusted gross income. So if you contribute the maximum you can to your 401(k), if you contribute the maximum you can to your IRA, you will be reducing your adjusted gross income which will help improve your eligibility to receive federal financial aid and it will also reduce your tax profile, but it will also put some money aside in your retirement.

In the last couple years, many economists have been pointing this out, America has had a negative savings rate. We have not been saving money at all and that's a very, very bad thing. There is a whole generation of people who are not putting aside money for later. Believe me when I say, when I'm talking on shoe about the government and stuff like that for however many months now, the government is not going to be there for you when you retire. They may be in some negligible effect, but come on, let's be real, the government is not going to be there for you when you retire. You need to have some alternative preparations in place so that when you do retire it's comfortable and dignified and that means saving for retirement. There's no polite way to put this, no diplomatic way to put this, the government will give you the short end of the stick when you retire because, you know what? You are not a tax payer anymore and if the, like we talked about yesterday, the government's checkbook comes from the tax payers. The government's ATM card proceeds come from tax payers. Once you're not a tax payer anymore, once you've gone on retirement, you're not a current customer of the government anymore and they're concern for you declines proportionately. Likewise, if you're not a registered voter, guess what, you don't count in the government. So make sure you're a registered voter and your exercise your right to vote frequently.

Alright, let's start of with some Podsafe Music today. Charlie Crowe, The Crowe Jam.

(music)

The Crow Jam by Charlie Crowe from the Podsafe Music Network at www.music.podshow.com a terrific, terrific piece of music. I have to say I really like Charlie Crowe's guitar work. He's definitely got some musical chops, obviously having been part of Brooks n' Dunn has had an enormous amount of experience to get that done.

Scholarship update time today. Instead of a specific scholarship, we're going to talk about a supplement to the Scholarship Search Secrets E-Book. By the way, I've refreshed that in the feed and I realized that I had not refreshed that since November. So if you are a new subscriber to the show, you will see it appear in your downloads; two PDFs, one is the What is a Podcast thing and the other is the 10-page E-Book, The Scholarship Search Secrets Update, and really you'll find all kinds of different ways to look for scholarships using free search engines so that you don't have to spend any money. You can, by the way, and I've said this before, paying money for a scholarship search is not necessarily a bad thing if the service you're using is reputable. We happen to run one that I thinks is reputable, at least I hope it is because we run it, it's the supreme scholarship search at www.gotscholarhips.com. Basically, what you're paying for when you pay for the service is access to the database, which is a fairly large database, 2.3, 2.4 million different awards which takes a lot of time to compile. For those of you who have been listening to our show, I have been compiling our free version scholarship search database called www.freescholarshipsearch.com and I got like 70 something awards in that, not 8 hours a day, but every day and it still only has a few awards in it. Granted the awards that are in it are worth a lot of money, but still it's relatively small. So, when you're paying for our service, you're paying for a database that we've been working on 8 hours a day for several years now.

Today's key phrase is Loan Forgiveness with a specificity towards geography or field of interest. What that means is this, if you type in loan forgiveness, you'll find several reasonable loan forgiveness programs and loan forgiveness pages on the web for learning how to locate ways to get you're loans dismissed after you graduate. Let's us an example, let's say that you are an accountant, so let's look-up accounting loan forgiveness. Now you start to see loan repayment programs specifically who are in accounting. You type in CPA for example, now you are starting to see results. Loan forgiveness programs for the Consumer Bankers Association, avoid bad debt write-off. What about Boston; Boston loan forgiveness, now we're starting to see things like the Boston School of Public Health pointing out loan forgiveness programs at Boston College. Loan forgiveness is, very rapidly, becoming an important topic because a lot of students are graduating with more and more debt every year. The way that you deal with that, well obviously you could make payments on it, but if you could get it forgiven, if you could get it cancelled, if you could get it paid off by someone else, these are even better ways, this is clearly one of the best ways to do so and by searching by something related to your field or to your geography, or to any of the terms you use for a scholarship search, substitute the terms 'loan forgiveness' for scholarship or tuition and see what comes up. Hey, it's only a little bit of time out of your day and you might be able to take care of your student loans. There are a lot of student loan forgiveness programs out there. There are a lot of loan forgiveness and tuition remission and loan cancellation programs for just about any kind of field. You just have to be willing to spend the time on Google and you may find the money. So consider these to be after school scholarship. And that's today's scholarship update.

Alright, let's move onto another piece of Podsafe Music. Capsella from I:scintilla. I was really enjoying them over the summer thought I would bring them back for the winter.

(music)

Capsella from Iscintilla from the Podsafe Music Network. Alright let's round out today's show with some mailbag. Sharon writes in asking, "I had heard the US government is allowing students to reconsolidate student loans. Is that the case and if so, what do I do?" Alright, Sharon, here's the thing, it's not that the government has decided to let students re-consolidate, it's just a matter of procedure. If you have student loans that you've recently consolidated with the Department of Education, as I've said in previous shows, the Department of Education is not a bank and has not real desire to be a bank and so they are more than happy to release those loans, consolidated or unconsolidated, to any third party lender.

The Department of Education also has a mandate basically requires any require lender to release their loans to them. This is a way of getting around the single lender rule. The single lender rule in the loan consolidation world basically says that if all of your loans are held by one lender like Sally May or the Student Loan Network, or Bank of America, or whoever, that the lender has first right of refusal. That basically means that the lender can consolidate your loans and no one else can touch them unless the lender says we are not interested in consolidating this loan, which very rarely happens because, student loans of any kind are a form of income for any and every lender so there's really no benefit of letting someone else take your business and take your customer away.

The way to get around that single lender rule is to consolidate with the Department of Education first and then if you want to use a different 3rd party lender you reconsolidate with that lender. There's a good reason why you'd want to do this. Let's say you had some student loans with Jack'sstudentloancompany.com, you consolidate your loans with them and you realize that Jack doesn't really offer that much in the way of borrower benefits, discounts, interest rate reductions, coupons, he doesn't offer anything, and you've happen to stumble across the Student Loan Network, and find out that we offer 1% off your interest rates after 36 on-time payments and a 1/4 point off your rate for using the automatic checking account withdraw, and you think that sounds good. However, you don't have loans with anyone other than Jack's Student Loan company. So, what do you do? You consolidate with the Department of Education first and then you consolidate with the Student Loan Network. By doing that you'll effectively get our borrower benefits for what used to be Jack's Loans and you circumvent the single loan rule. Now certainly you can do this with any loan company. You can do that with the Student Loan Network loans if you were so inclined, although I certainly wish you would give us a call and let us know why to see if there is some way to accommodate you. Anyway, so that is how the reconsolidation works.

Now there is legislation pending in the Higher Education Reauthorization, the draft versions that are floating around out there, that would prohibit the Department of Education from doing that. However, the whole Higher Education Reauthorization Act, doesn't' seem to be going anywhere right now in Congress because of all the political in-fighting. There is a very venomous debate going on in Congress and as a result, no real work is getting done, at least not in a substantive way. And that's not a bad thing because the more time politicians spend screaming at each other the less they can do to the citizens they are supposed to be protecting. So, that is the answer to Sharon's question. Hopefully this proves helpful. As always if you want to consolidate your student loans with us at the Student Loan Network, just give us a call at 877-328-1565 or go to www.studentloanconsolidator.com.

And that's going to take care of the mail bag for today. Do I have time for one more piece of Podsafe Music? Not really, because I wanted to talk a little about this whole Adam Curry Sound thing. If you're not a podcaster this next section won't be all that interesting so, feel free to move onto the next podcast, because this is effectively the end of the show in terms of Financial Aid.

If you are a podcaster this might be of interest. The Adam Curry Sound, I was reading up on it. I had heard on Podcast 411 on one of the Tech Tips, I had heard to benchmark your podcast volume and levels is a bad choice, because Adam has technology that makes him sound louder than her actually is. It took some time to do some research but basically what that boils down to is multi band compression, and normally compressors, especially hardware compressors, are extremely expensive pieces of equipment that fit in a rack and, Adam happens to be a professional broadcaster, he's a Podcaster of course, don't get me wrong, he is the Pod Father, his background, training and experience over the last 20 years have been in broadcast, so he knows how to use the equipment. He knows what sounds good and what doesn't. That being said, there are technologies, especially for Garage Band on the Macintosh, that allow you to get a similar type of sound or compression that Adam has without having to spend the same thousands, and thousands of dollars. You won't get the exact sound because, obviously when you pay that much money for equipment, you get the quality of the sound. But, it still sounds pretty good. It still sounds better than average. Here's how you do it. If you fire up Garage Band and go to your Master Track and/or your Vocal Track, you'll see a whole bunch of plug-ins. The one I have been using, last night and for today's show, is the AprilSoft Multi-band C3 Compression. I'll put a link to that in the show notes as well. I've been playing around and basically there are a whole bunch of different settings and basically I've tried to go for the Adam Curry sound. In the equalizer plug-in go for vocal presence, and then in the C3 compressor go for the warmer sound. The two combined seem to create a very bright, well, Adam Curry Sound, like I said, not as good as his. But I'm not willing to shell out the money for the equipment. But it's closer than just the default in Garage Band. Maybe I'll do a Tech Tip in Podcast 411 detailing how to push which buttons. But when you double click on a track in Garage Band, you can pull up, put all these different audio plug-ins and the Mac is really great about that. The AprilSoft plug-in is available in the Audio Unit format for the Mac and also the VSP plug-ins to other audio systems. If you are podcasting and want to try it out, hey, go for it. The AprilSoft C3 Compressor is free and your Garage Band comes with the Macintosh otherwise it is $499 for Windows and it comes with a free Mac Mini.

Alright that's going to do it for today's show. If you're not subscribe get subscribed, get subscribed. It's very easy. Directions are on www.financialaidpodcast.com. Or send me an email at financialaidpodcast@gmail.com. You can bet I'm going to take a listen to the show first to make sure it doesn't sound like garbage, in iTunes before I upload it. Even if it sounds a little rough around the edges I'll still publish it unless is sounds like I'm blowing out the speakers then. Show notes at www.financialaidpodcast.com, make sure you actually read the show notes and the blog because I will occasionally post things in the show notes or the blog that were not originally in the show. It's entertaining sometimes. Let's see, I think that's going to do it for today. Until tomorrow, for the Friday episode, I will see you then.

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the windows central said:

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