Posted On: 2005-11-21Length: 30:53
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Good Monday November 21, 2005, episode 120 of the Financial Aid Podcast. My name is Chris Penn and I'm please to have you along today. By the way this is the fourth time I've recorded this, it took me so many tries, I'm only half way through my first cup of coffee so I suppose that's my defense. We have a lot to talk about today. As always we've got tons of stuff, we've got some scholarship stuff today. A full tuition scholarship at Baria College, how to write a powerful scholarship Essay for those of you who are applying for scholarships, need to write essays for them and of course some news and some interesting little economics facts from the weekend. And of course the very best in Podsafe music, including the two new tracks; one from Planet of Women called "Surrender to Cheap Trick," which appeared on Saturday and Sarah Styles, so let's get it kicked off with the news. This coffee is not doing anything for me this morning. It was on sale at Stop-n-Shop, there was a Dunkin Donuts there, their whole bean roast, and I finally figured out why Dunkin Donuts coffee tastes so bland. The beans themselves are really, really light colored which means that at most it's a light acidity roast at most. Also the beans are probably not very good beans to begin with. Bang goes seven bucks anyway.
In the news today, we've got a lot to talk about the first thing on the news, home equity and education. Something has been happening, we did a survey for those of you who won iTunes free music cards from us; we did a survey asking people where the funds for education come from. Whether it's from savings, from equity, from student loans, scholarships and in the survey among other results, but in the survey, 55% of students responded indicated at least $1 of their education funding comes from home equity or mortgage re-financing. A full 27% said that 50% or more of their funding for education come from equity borrowing for education. This is alarming, and the reason this is alarming is that, it's no secret, mortgage rates and home equity rates are going up pretty significantly. In the past month or so, we have seen the 30 years fixed mortgage rate go from basically in the low to mid fives, all the way, now it's over 5.8%. Let me update this chart here, in the last six month's, as of May 31st, the rates were around almost 5.1% and those are up to now nearly 5.9% in some cases. What does that mean for people who are pulling equity out for education? It means that education expenses have got a lot more expensive; going up 8/10th of a percentage point. It can take what was traditionally a $2,000 in monthly payment and turn it into a $3,000 monthly payment because the balance of the mortgage is so much higher than a student loan ever would be. We're talking 3,4, $500,000, at least in the Massachusetts area, at least in the Metro Boston area here. I know it's radically different in other parts of the country, but since Massachusetts has also a fairly high concentration of colleges.
This is really, really quite important so, -- I was look at all the equity rates and things like that, and the indexes by which they are set, LIBOR, Prime Rates, even a one year ... Treasuries; and the bottom line is if you are in an adjustable rate mortgage of any kind and that mortgage is endangered of maturing within the next three to five years, so if you've got a 3:1, 5:1, or 7:1 ARM or adjustable rate mortgage, do yourself a huge favor if you can and re-finance it into something with a fixed rate. You're going to get some sticker shock, absolutely because a fixed rate mortgage payment is going to be higher than an adjustable rate mortgage payment, but every indication that I've seen really showed us that the rates are not going to be coming down anytime soon. The market has a ton of excess inventory and interest rates are ticking upwards at a fairly rapid clip. So if you are in an adjustable rate mortgage, regardless of whether you're paying for education with it or not, really shop around and try and get an fixed rate mortgage to lock in your rates. Speaking of locking in rates, for those you who have graduated in June of this year, you now have nine days and sixteen hours left to consolidate your student loans and locking your federal student loan rates before you lose your grace period. At which point your interest rate will go up 6/10th of a percent which translates into about $1800 over the life of the loan. It is definitely a good idea if you are still in your grace period for however many more days, get your consolidation done. You can go to www.studentloanconsolidator.com and do it there or just give us a call at the office here at 877-328-1565 and someone will be more than happy to help you.
A correction to Friday's comments about the Mass Grant Consolidation, Ilene O'leary, the Director of Student Finances at Stone Hill College, posted some really important updates the proposal that the Chancellor of Education put forth, basically is going to eliminate the Gilbert Grant and the tuition waiver. The Gilbert Grant is the only state grant specifically for needy Massachusetts residents at private colleges and universities; where as the tuition waivers are for public colleges and universities students in order to bring the Mass Grant to $3,600 a year. The article in the Boston Globe was incorrect, there aren't any income cut off for these grants, but rather they are tied EFC, the Expectancy Family Contribution. As your EFC gets larger, the grants get smaller so this really goes and targets a population that in Financial Aid is called the "working poor." And not just in financial aid in society in general. The "working poor" people who are-they're not poor enough to qualify for a ton of "free aid" from the government, and they're not wealthy enough to really be making a lot of advancements on their own. They are in that grey zone. That neutral zone where they're living paycheck to paycheck and trying to get by but there is not enough assistance for them. The proposal by the Chancellor basically takes money away from the "working poor" to give it to the most needy students instead of trying to find a way to bring more money into education in the state of Massachusetts for everyone. Everyone except for the opposite people who are them, groups who are absurdly wealthy and which point they don't really need the assistance. By the "absurdly wealthy," I mean people who make a million dollars or more a year. They can buy a college-one other interesting point that Ilene pointed out was that Massachusetts have reduced funding for financial aid pretty significantly for the last few years. We are in the 50 states, the fourth from the bottom of all states in support of higher education which is really bizarre because, we have so many colleges here and we have so many businesses that rely on college graduates so, if you are a Massachusetts resident and you would like to offer some commentary, please contact the State's Department of Education. I believe you can go to www.state.MA.US and look for the Department of Education and offer your commentaries about why eliminating these grants is not necessarily a good idea and a better thing to find more funding for education overall in this state. So that is today's news. It's Monday, it is so Monday so let's give things away, grab a cup of coffee, turn your speakers up and let's wake up the neighborhood.
Planet of Women with "Waking up the Neighborhood." It wouldn't be Monday without from the Podsafe Music Network at wwwpodsafemusicnetwork.com. All right let's talk about scholarships today; scholarship update today. We've talked about this before but it's such a good scholarship, it's such a good scholarship I wanted to bring it back and talk about it again. The Baria College Tuition Scholarship. This is an unusual scholarship because it applies to every single person who applies and is accepted to Baria College. It is a full tuition scholarship meaning that basically if you qualify and your application for admission is accepted to Baria College you go for free. The value of it is between $50,000 and $80,000 and Baria College, they have to be obviously very highly selective and who they admit into the college because endowment only permits a certain number of students to be admitted. Because they are giving a free ride to every single person who applies there but really what a terrific scholarship that is. To apply for it, it's really simple. The admission to the school is the application for the scholarship so you don't need to do anything else but you do need to have a certain income level. Below a certain income level in order to qualify and they have information about this and all the other requirements on their website. The admissions to the school are also very highly academically competitive, so obviously again they're giving a free ride so they want to make sure they are getting the best of the best to make the most of their endowment dollars in terms of education, in terms of finding the people who are going to make the most advancements and well, you know, because it's college, presumably the more successful the alumni are the more they'll receive the alumni donations in the years to come. Today's scholarship update is the Baria College Tuition Scholarship, like I said, full tuition, you pay nothing to attend at all and you can find information about the scholarship as well as how to apply and stuff through our student scholarship search website at www.studentsearchscholarship.com and the link will be in the show notes to help you find out more about the scholarship and how to apply. Baria College, full tuition scholarship for every single student who goes there, today's scholarship update. Let's crank it up a little bit more with a new one from Planet of Women called "Surrender to Cheap Trick."
"Surrender to Cheap Trick" from the Podsafe Music Network new from Planet of Women. I really, love that group, they create so much rock it tunes. If you want get your Monday going, there is no better way than waking up with Planet of Women. Let's talk about today's feature, "How to Write a Scholarship Essay" Particularly how to write a winning powerful scholarship essay. Scholarship essays are awful lot like-they're a combination between a job interviews and resume. They're written equivalently really of an interview. What judges are looking for when they are looking at scholarship essays are they are looking for things that stand out. In a good way, obviously if you send your scholarship written on crayon on a bar napkin that would probably stand out but not stand out in quite the way that you want, it will just be filed in the trash. Scholarship essay skills if you develop them translate later into resume skills, job hunting skills later on down the road, so it's important to hone the skills. One important thing with scholarships-really Google is your friend and I've been saying a lot about Google and I don't work for them, I really don't. But researching the topic that you are going to be writing about is so essential. If you have stuff to talk about if you have things that you can bring to the table when it comes to writing scholarship you'll do so much better than anyone else who is just going to write off the cuff. It's good to have a writing style that comes across as being very personal but that doesn't mean you don't do any preparation, because you do a lot of preparation. Rather than try and go through a whole list of generic tips about scholarships, which you know scholarship essay writing is a lot like any other form of writing. Make sure you-use the spell checker, use the grammar checker, use proofreaders, which are people who read your essays, a machine can not read an essay and come up with recommendations. No matter how good it is, at least right now, in the years to come as machines become more intelligent obviously that will be more of a consideration, but right now get your scholarship essays read by other people. Friends, family members, and especially people who you don't know particularly well. Good examples would be teachers; teachers at your school who you don't take classes with. These people who really have no idea who you are they're blank slates but also probably willing to assist you. If your high school has an English Department find teachers that you haven't had classes with, or you haven't had classes with in a number of years and have them review your scholarship essay. Have them look at from an very objective, critical perspective but also from their knowledge of you doesn't color their impressions of you. Working professionals, if you're parents work in an office place or something like that, maybe have one of their colleagues read it and write down some feed back for you. These are all ways to improve and make sure that you're using-getting as many as objective "ayes" on your essays as possible. Rather than go through anymore of those, because you can find a ton of them on the web, and I'll actually put a link to one of our sister sites, www.internationalstudents.com has a great section on there on how to write scholarships.
Let's tackle a question. Let's tackle one and go through it. Bare in mind a scholarship essay usually they recommend about 500 words. A 500 word essay is not particularly long, a 500 word essay is approximately, about a page of text, single spaced page worth of text. You've got to really slam it home in a short amount of space. The sample question we're going to tackle is, "What are the most important issues in your field of study today?" My particular field of study is Financial Aid. It's what I do, it's what I do everyday. It's okay to dramatize this, it's okay to tell things, but it's also good to back things up. If I were writing a scholarship essay about Financial Aid, first thing research the heck out of it. What is going on in Financial Aid today? Well, for one thing you've got personal debt levels are sky rocketing. The average college students graduating with $7,000 worth of debt; to put this into perspective, that's like basically every college student who owes money on a car that they don't drive yet-there's a key for scholarship writing. Have imagery. Have things that are concrete in whatever you're talking about. It's nice to say that you have X,Y,Z GPA and you won so many awards and things but you know what? So have a lot of other people. What are things that you can write about that stand out about you? What are the things you can dramatize? Dramatization is okay as long as it's truthful. For example, let me give you an example of a very conventional way of looking at something. Here's a story about a kid whose, whiney and annoying, he has no idea what happened to his parents, and he goes off on some lark and leaving his responsibilities behind and meets up with a bunch of really questionable characters and in the end with a little bit of arrogance and stuff like that, he makes some important things happen in life but he hasn't really matured yet. He hasn't really figured out what life is about and why he's there. That's really ordinary. Wouldn't you agree? That's like a very conventional tale. The kid I'm talking about of course is Luke Skywalker from Star Wars. He's the farm kid who goes on to become a Jedi Master. But the way George Lucas tells the story with dramatization and with these very vivid images, it is so much different than just how you would describe it if you were thinking ordinary. So think in terms of imagery, think in terms of ways you can dramatize things that have happened in your life, for example again in Financial Aid, we talked about when we did the audio promo. If you drop a quarter every second at every single college campus in the country, that is the amount of money that in Financial Aid that people are not getting. That's a ton of money; you have to be there dropping quarters every single day. That's vivid; it's something that you can wrap your hand around. Saying $31 billion is kind of a meaningless number but hey drop a quarter, drop a quarter on every campus for every second for a year that's the money that is not being made available to Financial Aid. Those are some scholarship tips. I think we could probably do a whole series of these so I may do that, because there's even more that we could talk about. The key points today, research, get your facts in line. Dramatization and making sure you take care the basics, good proofreaders and so on and so forth. Let's finish off today's show with Sarah Styles new from Podsafe Music Network with "So Beautiful."
New music from Sarah Styles, "So Beautiful" from the Podsafe Music Network. Well folks that's going to do it for this Monday's show. This week is going to be kind of an odd week, I'm going to be in the office Monday and Tuesday but Wednesday through Friday I will be out for the Thanksgiving Holiday. So I'm not sure what I'm going to do with those shows yet, there will be shows at least one of them will be a music show, of that I m almost positive about. Maybe I'll do some extra stuff with this whole scholarship essay thing; maybe we'll do a couple of specials like a holiday special. But there will be shows, so stay tuned if you're not subscribed get subscribed and you can do so at www.financialaidpodcast.com there's directions right there. It's really simple basically you install the latest copy of iTunes and then you subscribe via [29:38] subscribe to Podcast and there's directions on the website. It's very, very, easy. There are 10 days left until our Ipod Nano Give-Away, so if you have not already submitted your free application in the contest, or if you have not already got any loan through the student loan network, now is certainly the time to do so. You can win Ipod Nano with Lanier Headphones or a student loan payment, a one time payment of up to $300. We'll do the drawing on Thursday December 1, 2005. Make sure you are tuned in and subscribed to see if you've won. There is no other way to find out if you've won, because we're not going to the winner's on the website. Reminder, tomorrows the last day if you won one of the iTunes music store gift cards, tomorrow is the last day to claim it, after that we'll probably fold them into Ipod give away as well. Show notes are at www.financialaidpodcast.com if you have feedback about anything in today's show email@example.com is address to send your messages too. I'll be more than happy to read them audio feedback is also welcome there. Ahh, the coffee is starting to kick in. All right folks until tomorrow, stay tuned, stay subscribed we'll see you then, take care.