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Google Cash Scholarships Secrets

Posted On: 2005-12-02Length: 31:21

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Good Friday it is Friday December 2, 2005. This is episode 129 of the Financial Aid Podcast and my name is Chris Penn. It is Friday folks, it is so Friday and I am excited to be bringing you a Friday show, I love doing Friday shows there is so much fun we can have a lot of fun with some of the music. I have found THE Podsafe Artist; I've been looking for for quite some time. I had no idea that Sweden could kick that much butt. You'll see what I'm talking about in the first piece of Podsafe music a little bit later on in the show, Beatrice Erickson; we'll talk about her in a little bit.

We've got some news about Google Cash, Indiana University; some retractions from yesterday's show a public service announcement to the December newsletter, scholarship update and Eye on the Economy. As you can tell we have a lot to cover, let's get started with the news. Have I had my coffee? You bet I have, all right let's get started with the newsletter which is coming out there is a last minute change in the newsletter, if you have not got it by the way, you can see it at www.financialaidnews.com please do. The public service announcement in the newsletter says, "Reminder, 2005 is winding down. You have however until Midnight Year's Eve to make a charitable contribution to the worthy cause of your choice. Charities especially at this time of year need your help and you can take the tax deduction on your 2005 income taxes in January. You have until midnight New Year's Eve so please donate what you can." Remember it doesn't have to be a big amount of money a lot of people I think get scared off from charity by thinking that you have to donate a certain amount of money and maybe on the online websites you have to make a minimum contribution but if you have a day shelter or day program or a homeless shelter or food for the poor kind of thing, you can donate as little as a can of coffee. Everything counts, every little bit counts. Please do make the effort to donate before December 31, 2005 and you can try www.charitynavigator.org that is a good resource for checking out charities and seeing how they spend your donations but obviously if you are donating a can of coffee to a homeless shelter presumably they are going to use to make coffee for the homeless, there is really no kind of assessment on that kind of thing. In general most shelters are very good about those kinds of things. Definitely try to make the contribution and help out your community at the Student Loan Network we make a fairly sizeable contribution of food and stuff the Father Bill's Shelter here in Quincy, so hopefully everyone can join us in helping the people who need the help the most. Retractions and corrections on yesterday's home equity notes, I actually made a mistake in the calculations, the MSN Money article talked about 5% of home equity borrowing being for education, so it's not 5% of education's $129 billion , it's 5% of home equity borrowed and we are going to talk about that in Eye on the Economy in just a little bit.

From the San Jose Mercury News, the journal of record for Silicon Valley. Stanford University has earned $336 million off of Google's stock. The University has a whole ton of Google stock that they get 1.8 million shares worth in exchange for giving Google the right to use its internet search technology. The reason for this is that the Sergei Brin and Larry Page the two guys who founded Google, developed the core of Google's technology while they were graduate students at Stanford. Stanford licenses that technology to Google for the use, obviously innovations since then are exclusively Google's but core of the search technology like page rank and stuff like that is still a part of Stanford University. They sold 184,000 shares about 10% of its stake for $336 million which means that they have about 1.6 million shares left. That is a tremendous amount of money 1.6 million shares of Google stock, there stock is selling about $400 a share right now, so Stanford effectively still has $600 and some odd million left in Google stock that they can sell. Hopefully they will be turning that towards financial aid, although if Google continues to make its meteoric rise, Stanford may soon be able to pay for the entire country to go to college for free.

Speaking of going to college for free, Indiana University, students will benefit there from gifts for scholarships. Anonymous donors have given up to a total of $155 million in the last year to Indiana University and the university is going to create more than 1,100 new scholarships in perpetuity for IU students. The gifts include a $70 million gift from a donor who has asked to remain anonymous and a $15 million gift from Indianapolis businessman, a philanthropist Jesse Cox and his late wife Beulah. The anonymous gift is the largest one ever made by an individual to a University; they are going to create a ton of scholarships for Indiana University students, so if you are looking for scholarships keep your eyes on Indiana University in coming future. Hopefully they will make very good use of that money and that's going to tie it up for the news this morning. Podsafe music, Beatrice Erickson I was looking for holiday music for the show today on the Podsafe Music Network, and I stumbled across Beatrice Erickson and I tuned in like "Oh WOW!" She sounds great, I didn't know the Swedish could sound this good. It's a neat blend of rock and a little bit of a country twinge to it, so-I don't even know where to start, let's just start at the top we'll start with "Reach Out," by Beatrice Erickson from the Podsafe Music Network. I think you are going to really like this, I know I did.

(music)

"Reach Out," by Beatrice Erickson from the Podsafe Music Network. I think we are going to be hearing a lot more from her in the near future, we will on this show but I mean on other podcasts too. Scholarship update time, let's talk about an addition to the Scholarship Search Secret Guide another secret method for finding scholarships. It's not really that much of a secret but it is a little bit of common sense thinking. By the way if you don't know what I am talking about the Scholarship Search Secret Guide is an E-book that the Student Loan Network put out late this summer. It's a 10 page PDF about the basic for getting set up to do scholarship searches using free search engines and search tools on the internet. Things like Google, MSN, and Yahoo et cetera. It is free but you need to be a Financial Aid Podcast subscriber to get it. If you don't have a copy of it and you want a copy of it just go to www.financialaidpodcast.com and you'll find instructions there for how to subscribe to the feed using iTunes or the podcatcher of your choice and then the PDF will be included in the feed and just download it and give it a good read. It's in an Adobe Acrobat PDF so you will need the Acrobat Reader or Macintosh either one will do just fine.

The update today is simply this, when you are doing scholarship hunting, if you set up a very broad, generic scholarship term, search term like scholarship application in all quotes or scholarship application with those square brackets around them, more often than not you are going to also get news and information about people who have won scholarships, people who have earned scholarships, rather than just delete those right away; if they pertain to your scholarships search, if they pertain to your situation, give them a read because it's the same award that's been awarded now or recently will be awarded again in the future and will be a good idea for you to catalog those, take them down, make notes about them and how the person who got the award won it and apply for that award to your self in the next year the next time the award is made available. Likewise a lot of the scholarship winners, people who have earned the scholarships at least give one or two details about how they got the scholarship. It's useful to know, it's important to know because they are the ones who are getting the results. If you are not getting the results in your own scholarship search you should definitely check out what other people are doing as much as possible.

Searching for sample scholarship essay is that's going to pull up a lot of crafty garbage on the internet. Your best bet is to reach out to some of these folks, usually the articles have contact information or at the very least what school the person is going to. Shoot them an e-mail on those things saying, "Hey I heard that you won this scholarship, congratulations, do you have any tips that you could share because I am looking for scholarships for myself." Reaching out to people like that always is a good idea. Finally this is going to be a search term update. If you have every used Google's advanced search capabilities, you really should because they can just do so much for you. One of the things is the Wild Card argument, which is the asterisk. Let's say I wanted to apply for a scholarship but I didn't know necessarily what scholarship I wanted to apply for only I knew that it was an important term. What Google allows you to do, I swear I don't work for Google, I know there has been a lot of Google on today's show but I don't work for them, I work for the Student Loan Network at www.studentloannetwork.com. Is set up a Wild Card in your search, if you were to type say, start with the left square bracket apply for a {space} * {space} scholarship and then the right square bracket; that will give you a match on any article or page on the web that has that sentence phrase with the Wild Card embedded in there. For example it will pick up apply for a martial arts scholarship, apply for a Boston University scholarship, apply for Harvard scholarship, apply for a Duct Tape scholarship, all these different searches, things will get picked up by that Wild Card Phrase. So learning to use your Wild Cards within the context of the Scholarship Search Secret Guide that you've already downloaded and read, will be yet an additional tool that you can use when it comes to finding scholarships that best fit your needs, those three things figuring out what people won, getting in touch with them and the Wild Cards are today's scholarship updates for today. Let's move on to the next piece of Podsafe music, "Put a Little Love in Your Heart," again by Beatrice Erickson. This one crank it up.

(music)

"Put a Little Love in Your Heart," from Beatrice Erickson. I can already tell that I am going to listen to her all day long, just going to be one of those days to set the Ipod on repeat and run with it. Terrific music from thePodsafe Music Network. All right Eye on the Economy. We have a lot to talk about on this one. Yesterday I talked about what I thought was 5% of all education funds were paid for by home equity borrowing it turns out that I misread the article on MSN Money, what it really said was 5% of all home equity borrowing is dedicated towards education, towards parents paying for college. That is a lot more money. How much more money? Well it's about the total amount borrowed in the United States in terms of home equity is about $1.235 trillion. It's about $735 in standard home equity loans and lines of credit plus an additional $516 billion in what is called sub-prime non-conforming loans. The two are split up because the non-conforming loans aren't included as part of the mortgage lending because they are so risky and they and they don't meet the standards that most lenders like to see when it comes to issuing loans so those are counted separately at least from the perspective in how much is borrowed. The reality is that it's all lumped together. $1.235 trillion in home equity borrowing in the United States, and this is for 2004 by the way, we don't have any figures for 2005. The 5% of that is for funding education at least according to the Consumers Bankers Association of America. That is $61 billion, now this is $61 billion at risk in uncapped equity market for education and that's important because unlike Federal Student loans, which have loan interest caps, equity borrowing has no cap what so ever.

The home equity is subject to the forces of the market and the forces of the market can be very harsh. Let me give you an example, let me give you a couple of examples. The home equity loan is generally tied to one of a few different rates depends on the equity loan that you have if you have one, and if you do have one you might want to think about refinancing to something that's a fixed rate. The two rates are-that are most common are the one year CMT, Constant Maturity Treasury, or the Prime Rate, the Wall Street Journal Prime Rate. The one year CMT can fluctuate pretty wild, it's the price of a one year treasury note, there actually isn't such a thing but it's an average between the three year and 108 three day treasury note and the Prime Rate of course is the rate of consumer lending set by 23 of the country's biggest banks when they all agree to change their rates together. Why that isn't racketeering I don't know but they haven't. Unlike Federal Student loans this type of borrowing is not capped, the highest the Prime Rate is ever been in August of 1981 it hit a whopping gigantic 21%. Now keep in mind home equity borrowing is generally your index rate plus anywhere from 2% to 2.5%, so if you think about it, if you are using equity to pay for education there is the possibility, I'm not going to say it's going to happen because as much as I would like I don't have those Sith Lord powers of foreseeing the future. If I did I would be down at Foxwoods playing on the Roulette table. If there is the possibility that you could be paying up to 23% nearly 24% interest on a home equity loan to pay for education which would vastly out paces Federal student loans. The maximum that any kind of Federal Student loan can reach is the PLUS loan and that cap is at 9%.

This is very clearly, if you are borrowing equity for education you have to be very aware of that risk and if you have a variable rate loan, do your best to get it locked into a fixed rate loan of some kind, quickly because the indications are that generally rates are going up. The Prime Rate for example is directly tied to the Federal Reserves Federal Funds Rate which is-whenever you hear the Federal Reserves interest rates are going up, that's the Federal Funds Rate, that's the rate that banks can borrow from the Federal Reserve. When that rate goes up the banks pass that onto you the consumer and your rates go up on just about everything. Now that also means that things like savings and investment rates usually go up as well but not necessarily always. The Eye on Economy is talking about-you've got this tremendous, huge pool of money that is uncapped and relatively risky compared to Federal Student loans and if you have variable rates please by all means find a way to get into a fixed rate program. There is going to be some sticker shock because your monthly payment, a fixed rate loan is generally going to be a little higher than on a variable rate loan if you have one of those home equity loans where there is a teaser rate or an inducement rate which gets the first two years you get a much lower rate, so you are used to making a smaller monthly payment and then when that matures and goes to a full variable rate, your monthly payment is going to go up.

Then if you refinance your home equity loan into a fixed rate you are going to see a smaller increase in your monthly payment now but insulated for future rate hikes, and remember unlike student loan consolidation which you can do at www.studentloanconsolidator.com or call 1-877-328-1565, you can refinance your mortgage or equity at any time. You have to pay closing costs and stuff like that and go through the whole closing process but there are no regulations as to how many times you can refinance your mortgage. You can refinance it every other month if you wanted too and I know some people who have when rates kept dropping like flies, they just refinanced all the time. Do your best if you can to try and lock in that rate and with interest rates or any kind of debt borrowing going up, up, up, which it has been for quite some time now; like I said in previous segments keep your hands off the plastic, put the credit cards away, lock them up, cut them in half, make them into soup I don't care what you do with them as long as you don't use them to spend money because that is just so very much not the way to go. If you are carrying balances on your credit card call your bank and try your best if you can lock-closing down the account and pay it off, pay off as quickly as you can because interest rates are only going up right now on consumer debt. Your monthly payments are only going to be larger and larger and larger. Pay as much as you can right now, if you have variable rates on equity, refinance to fix rates, if you have variable rates on anything, student loans included, get fixed rates because the rates are not going down. You already heard the plug for www.studentloanconsolidator.com so there you go. That is going to be today's Eye on the Economy. Let's finish off this Friday with one last piece from Beatrice Erickson, we are going to do "As long as the World is Turning."

(music)

"As Long as the World is Turning," by Beatrice Erickson from the Podsafe Music Network and you can find more information about her at www.beatriceerickson.com or in our show notes at www.financialaidpodcast.com I will be featuring a link prominently into her website in today's show notes, because WOW! She is so good. One last thing before I finish up today's show, if you had a $30,000 home equity loan at 6% for a 15 year loan term, your monthly payments are going to be $253. If the Prime Rate or whatever it is, if it goes up to that 24.5% your looking at a monthly payment of $629 so the possibility exists that it could happen in order to forestall that definitely do something about consolidating. Consolidate your student loans, consolidate your credit cards, consolidate everything, try and find fixed rates while you can because it's only going to be a very interesting 2006. Hopefully I'm thinking I will try and get Jay Fleischman on the podcast again, because he had a lot of good insights the last time and maybe we can talk to him more about the consumers debt issues that are coming up now for 2006. Maybe like a New Year's resolution show or something. That's going to do it for today's show the show notes are at www.financialaidpodcast.com. Feedback, comments, questions, suggestions, dirty jokes whatever financialaidpodcast@gmail.com is the place to send it. I happily except all sorts of stuff, as you heard yesterday I accept audio feedback and will play it on the show as long as it's appropriate so please by sure to send that in as well, I welcome it, I enjoy it. I like hearing from you, I like talking with you about all these different things and financial aid, whether it's just what's going on in the market place or whether it's specific to your situation. This show is all about getting information out to you and getting information from you and sharing it with everyone, making college more affordable hopefully more affordable or at the very least keeping it from hideously expensive on you. We did the Ipod Nano contest yesterday and unsurprisingly the person who won claimed it , we mailed that out that is all taken care of. Maybe we'll do something for the New Year find some interesting way to do that, something similar maybe like a "Hey do didn't get this for Christmas," contest or something. We'll see, we'll see how it all shakes out. All right folks if you are not subscribed get subscribed it's very easy, directions are at www.financialaidpodcast.com I hope you have a great weekend, I might do a music show, I don't know it depends on whether Beatrice uploads any of her music or not. Until next time, take care.

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