Posted On: 2005-10-21Length: 28:28
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Thanks for joining us. You're listening to the Financial Aid Podcast with Chris Penn. It's Friday. Friday, October 21, 2005 this is The Financial Aid Podcast episode 97. I am Chris Penn. I am your host. Welcome aboard. I'm very pleased to have everyone who just has joined from The Financial Aid Podcast mailing list. Stop on by and give a listen to the show. We got a lot of great stuff to cover today. Got really cool new things that are out there. Really cool things that are happening in the world of iTunes and iPod stuff regarding education.
Let's get right to the news. Let's jump right in. I'm going to Stanford University and so are you. Stanford University has released a whole bunch of material online at iTunes.Stanford.edu. What they're doing is, this is really, really cool, they are releasing giant chunks of audio from course lectures, home coming, events, special guest speakers on campus. Everyone and everybody they can get their recording gear out to is being put out there. Students will be able to download course lectures, so will alumni...really anyone, including video content coming soon. So, you can attend, affectively attend some of the lectures by professors at Stanford University. I was playing around with this and this is really, really cool. They've got a whole bunch of really interesting stuff out here. They've got Steve Job's commencement address at Stanford. You've got a whole bunch of other speakers I'm sure are very, very distinguished I just don't recognize any of the names off the top of my head. But it's called Stanford on iTunes. You can visit it at iTunes.Stanford.edu. I'll put a link on the show notes as well. You're getting a chance at experiencing one of America's better universities, virtually. And the really nice part is that it's free. It's as free as the wind blows. There are 21 faculty lectures right now in here.
We've got Sex, Lies, and the Theatre, Shakespeare for Dummies, Your Spiritual Morals Inquiry in the Classroom, Confronting Katrina: Race, Class, and Discrimination. Just tons and tons of stuff and some really, really high quality audio. So I'm very, very pleased to see that. I think this is going to be a great experiment, not only for Stanford but for people who use portable audio technology, particular iTunes and iPods. This is going to be something. Stanford joins, by the way, a couple of other universities including Duke University, Brown University, and the University of Michigan Anne Arbor's Dental School. All these schools are starting to put content in iTunes and I believe they are all offering it for free at the moment so take advantage of it while you can. It's really, really nice.
The Heights, the independent student newspaper of Boston College reports, they're talking about The Higher Education Act Reauthorization and Fiscal Year 2005 Omnibus Appropriations Bill. Essentially what's happened in this Bill is, the government currently spends about one half of 1% of its budget on grants to help low and middle income families pay for college. That dialed back in the Omnibus Appropriates Bill. It's a estimated that if this Bill is passed in full, students will need to absorb another $2,008 on average in student loan costs. If you are a student and you had say, $15,700 in loans that would go up to $18,708 in principal simply because the subsidization of some student loans would be reduced. The article itself is not all that clear. But it does mention a call in campaign for students who want to let their voice be heard. You can always call into your congress person. Call into House.gov or Senate.gov and let them know that you think higher education financing is one of the top national priorities as we at the Student Loan Network feel it should be as well, making college affordable for more people.
Giving more people access to college is important. In the Daily Bruin, the student newspaper of the University of California reports that college fees are outpacing financial aid and inflation. However, one thing that UC does that is different from many other colleges is that student fees and any other fees basically plowed back into financial aids. It's really very interesting; University fees have been increasing rapidly from a UC average of $5530 per quarter to the current level of $7062 per quarter at UCLA. That is a tremendous amount of fees. But apparently what they are doing is plowing those fees back into financial aid for the most needy students. It's effectively additional form of financial aid for low income students at the expense of middle and high income students. So that's happening at UC. Definitely got check out some of these iTunes Stanford experiments. Particularly as college continues to get more and more expensive, alternative forms of higher education are going to become more prevalent. So check it out and see what you think of it because it very well may be the future.
Alright, let's cook up here of a little bit of Podsafe Music just to get a Friday started.
The Silent Treatment which is the title of the song by P.W. Fenton and the Second Ward. New from the Podsafe Music Network.
Alright let's talk a quick scholarship here because I wanted to get into a large amount of the mailbag. The scholarship for today is a local one. It's called the Wellesley Scholarship Foundation. The Wellesley Scholarship Foundation has announced that it's now accepting applications for two merit-based scholarships, The Donald T. Bapson and the Margaret Daniels Scholarships are awarded to recipients who are Wellesley residents and Wellesley graduates in high school in 2006. Applicants should demonstration distinction, scholarship, and good character. These awards will be made in the amount of $1500 dollars each year the student is an under graduation. All students who meet the requirements are required to apply by February 1st and you can do this at WellesleyScholarshipFoundation.org. This is for Wellesley, Wellesley, Massachusetts. It's one of those local scholarships that's just out there. If you are searching for scholarships, don't forget to include little scholarship awards, little local awards like this in your search because it's important. This scholarship is $1500 annually, but if you line up 10 of them, now you're talking about tuition at a pretty good private college or just about any public college. So, make sure you include local scholarship in your scholarship search.
Ok. Let's get to another piece of Podsafe Music first and then we will get to the giant overflowing mailbag.
Amplifico, Combing My Soul for More. Alright, let's open the overflowing mailbag here.
We have two corrections first of all. Number one, a reader of the Financial Aid Newsletter points out the most recent newsletter that the, Dave pointed out that I said that the 2006 Tax Returns, and in fact it should be the 2005 Tax Returns are the ones that you would file next year for your taxes for this year.
Randall Rothstein, a CPA, wrote into say that, "Charitable contributions will not adjust your adjusted gross income. Charitable contributions are deducted on schedule A, itemized deductions and have no affect on adjusted or gross income whatsoever. Schedule A deductions are a reduction of taxable income on page two of the 1040. As a result charitable contributions do not increase your chance at receiving financial aid. Donations to charities have no benefit for college planning. Thank you, Randall for that correction. Unfortunately that means it's not something that would help you with financial aid but it's still a good thing today and it still is providing a deduction of some kind. This doesn't mean it's not a tax benefit it just means it's not going to help you with your financial aid.
Got a whole bunch of emails from international students asking where to get international student loans and international scholarships and the answers are pretty straight forward. For scholarships go to internationalscholarships.com and for international student loans for study abroad go to studyabroadloans.com. Both of those websites will help you find international financial aid.
The last piece was an inquiry from Jerry Curado who asked, "Who does one turn to when one's life has been ruined by a 20 year old student loan that is now more than 3 times the size of the original amount borrowed even though one has been paying on the loan for years?". Without knowing the circumstances of this or why...a Federal student loan, like any loan, accrues interest and in the end capitalizes back into the loan balance if it is not being paid. So, what you do to do that? Well, presumably if you haven't used up your deferment or forbearance you can do that and use that for 36 months to get your finances in order. If you need to get a job or a second job, or increase your savings, you can use a deferment or forbearance. So, once you've used those up, your next best bet, assuming that the loan is not in default or badly behind on payments is to consolidate your student loans. Consolidating them gives you're a fixed interest rate, a fixed payment plan and gives you a fixed budget because you don't have to worry about the variability of interest rates. Now if this is a 20 year student loan, which is unusual, it may have already been consolidated, because most federal student loans have a 10-year repayment term. If it's a private student loans, that's a different matter. Private student loan consolidation is available as well and will stretch out the payment term as well.
Most private student loan consolidations, including ours, have variable rates because they don't have the federal guarantee, which means the banks that underwrite these loans basically require that they obviously continue making money off the interest so it remains variable. That's not to say it's not a good idea because it is if you're looking to stretch out the repayment term and cut your monthly payments. If you are in default or you are in bankruptcy or in a whole lot of trouble on these loans, we have what's called a default student loan consolidation program which we can get those student loans rehabilitated and then consolidated. And the best resource for that is our website, studentloanconsolidator.com. There's a whole section on defaulted loans in there where you can figure out what your situation is and submit a loan application and have one of our defaulted loan counselors talk to you and go over what can be done for your situation. But it's a very good question.
Loan consolidation is a, we make a big deal of it at The Student Loan Network, because I think it's one of the better programs available to students to help make your post school education affordable. Student loans and financial aid make college itself accessible but, loan consolidation helps get you on your feet after college ends. I've heard some people say, it's not that good of a deal because you're paying for a longer amount of time so ultimately you end up paying more interest, which is true if you only make the minimum payment. Let's say you graduate and you want to consolidate your student loans because you don't want to pay $300 a months on a $30,000 student loan, you'd rather pay $190 which is roughly what you'd pay if you consolidated during your grace period. That extra savings, that extra $140 a month is a big deal when you're first getting started. It could make the difference between making rent and not making rent on your apartment if that's the case or making a car payment or not. After two or three years, you've been in your career, you've gotten going, you're bringing in a better income than when you first graduated and now you can afford more things. And one of which is you can start making extra payments or start making your extra payment larger and towards the principal and start cutting back on the loan time. Five, six, seven years down the road and you're half way up the ladder at your company or your ambitions were to start your own little small business on your own and now it's not such a small business, ideally, now you can start affording to pay a lot more depending on how successful you are, you might be able to afford to pay the whole thing off right then and there. Student loan consolidation does not have early repayment penalties, at least not federal student loans. If you won the lottery tomorrow, right the check and say, I'm done with student loans, and you won't be penalized for making the extra payments.
So, to answer Jerry's questions, investigate loan consolidation, if you're in default, investigate default loan consolidation. Give us a call here at The Student Loan Network at 877-328-1565 and we may be able to shed some more light on your situation. What else is in our mailbag. That seems to be it; just a few people inquiring about scholarships and things so, let's do one more piece of Podsafe Music.