Posted On: 2005-10-20
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Thanks for joining us. You're listening to the Financial Aid Podcast with Chris Penn. Good morning, it is Thursday, October 20, 2005. This is Episode 96 of The Financial Aid Podcast. If you're just joining us, welcome. If you're tuning in again, welcome back. It's a pleasure having you as always. We have a lot to talk about today as always. Some financial aid news, a mail call and of course a little bit of information about hurricane Wilma. So let's get right to the news.
Topping the news today of course is hurricane Wilma. The, gosh, what was it, the 23rd named storm of the 2005 hurricane season is currently over the Yucatan peninsula and is expecting to make a land fall in Florida later on in the week. So if you are in those areas of the country, the Florida Keys, Southern Florida, now would probably be a good time to start packing suitcases and things and relocating. In the off chance that this thing decides it's going to head northwards and cause a lot of trouble. You definitely don't want to be in the way. According to the colleges down that way, Eckerd College has called off classes after 2:50 pm on Thursday, that's today, and all day Friday. The University of Tampa is closed as of 12:30 pm, Thursday. The University of Miami has postponed all weekend athletic events. Let's see, the University of Southern Florida has postponed athletic events, and the University of Central Florida is moving up its game from Saturday to Friday. So, let's see, again if you're a student at those colleges you probably also want to think about putting together some stuff, a back-pack or a suitcase or whatever, and maybe thinking about ditching classes and leaving, quickly. Hurricane's tend to be fairly bad thing.
In other higher education news a USA today investigation on the records and finances of a big-time college athletics found that expenses reached $3.6 billion last years. The investigation found numerous errors in reports that colleges filed for their expenses, raising the possibility that the actual spending may be higher. This is interesting because it really is, in some cases, where is your tuition going? Where is all the money they are charging you going? And part of it is going to expenses. Athletic spending is about, according to this article, 5% of all university spending. But, in terms of percentage of growth, athletic spending is growing at three times the rate of any other portion of university spending. It's sort of what they call an athletic arms race where schools are basically trying to outspend each other to raise the profile of the school.
University of Arizona President, Peter Liken is the chair of the NCAA's new Fiscal Responsibility Committee said, "We're concerned that this is an economically healthy enterprise that is not sustainable. If we see a crisis 5 to 10 years down the road, we have a fiduciary duty to avert it." Which is admirable but he doesn't really give any talking points about how the university would slow down the vast amounts of spending they're doing on athletics.
One last thing, the SGV Tribune for San Gabriel, California reports that there are some...at least at some schools or with some smaller student loan lenders, some student loan lenders may be illegally shifting a low interest loans to higher interest rate brackets, as a result making student loans for those students more expensive. Private lenders give money up front to schools who then make available to students in graduate and professional programs. These would be private student loans not federal student loans. The schools then lent several of the loans back to the lenders at a premium. The new loans carry interest rates that are higher the student originally signed up for, but because the enormous amounts of small prints that come along with any promissory note, most students don't notice until after they've graduation. A little lesson from the Tribune of course is be very, very careful what it is your signing. Especially when you're getting a private student loan through the school. Even the schools financial aid office may not have read the small print so, it is your obligation to do so. Otherwise you can end up saddled with a very, very high interested rate for your student loan.
I remember when the consolidation was in its peak this past June, we did get a fair number of calls from students who were asking about private student loan consolidation because they had signed a last minute loan with the school to get them through some expenses and found out later those loans had interest rates, 20-22% interest rates or higher. And simply wasn't, it was disclosed in the paper so the lender met their legal obligation to do so, but it certainly was not made obvious. The lower interest rates were more prominently featured. It's kind of the way you see with credit cards. It's 0% finance charge for six months and then in the fine print it says 28% percent after your introductory period ends. So, be careful. The same things that can happen to you in credit card lending can also happen to you in student loans, especially private student loans. Be sure you read your paperwork, if you have questions about private student loans or you want a loan where the loans are being disclosed properly and up front, give us a call at our Act Education Loan desk at 866-229-8900. We'd be more than happy to answer any question you have about private student loans.
Alright, let's move on to some Podsafe Music.
New Podsafe Music from PW Fenton and the Second Ward. That was Above the Clouds. A great, great piece of jazz Podsafe Music. Ok, let's move onto the mailbag. Got a question here from Kimberly Waxter who says, "I was attending Delgado College in New Orleans but due to the hurricane I can't finish school. I started the next semester this past August and received a student loan and a grant and I wanted to finish school. What do I need to do to finish school at this point?"
Ok, the Department of Education's actually put out a fair amount of information about what to do with the areas that have been affected by hurricanes Katrina and Rita and presumably Wilma. Students and parents can call 1-800-4-FedAid for general questions. That would probably be the best place to start when it comes to what's going to happen with loans and things. In terms of the Federal Financial Aid that you've received for schools that are closed or non-operational, whatever, the Department of Education has effectively given an automatic 90-day forbearance for students who were affected in the areas where the hurricanes are or graduates who owe money to the schools who live in those areas. So if you are a resident of New Orleans and had student loans, you have an automatic 90-day forbearance beginning the 8th of September so you basically have until the 8th of December where you don't have to make payments on your student loans and that may be extended by the Department Of Education.
Students who are in school are obviously not required to make loan payments, but if they leave school, under normal conditions would enter repayment. However, if your school is non-operational due to a hurricane, you will not need to begin making loans payments. Your loans that are in-school status will remain in-school status during the period of disaster related non-attendance. If for example you are attending Delgado College and Delgado College simply has not resumed classes or resumed operating, you will not be impacted by, your loans will not go out of in-school status. The administrative forbearance provided for federal student loans borrowers as a result of the hurricanes will not adversely impact your credit rating. It basically, it puts the loans on pause. It's not like an economic forbearance where you applied for something because you were in economic trouble like you lost your job. This is different. This is the Department of Education making the forbearance automatic. Once the period of forbearance ends, student loan borrowers may be eligible for a deferment during which payments will be reduced or postponed. If you have loans through the Department of Education directly you can contact the Department of Education at 1-800-4-FedAid.
If you have loans through a 3rd party like the Student Loan Network or any other of the major, national, non-governmental lenders, you can contact the lender directly for additional information. Let's see, grace periods. We talked yesterday about grace periods when consolidating your student loans and why it's a good idea to consolidate them. If you are a student loan borrower who lives in one of the hurricane disaster areas, you'll receive forbearance 90 days from, I'm sorry, it's September 1st not September 8th, when this grace period expires you get a loan payment forbearance in which no loan payment is required and you don't have to apply for that. After that, you can apply for a regular consolidation. The clock is paused during that forbearance period. So, the other thing here is if you were awarded a federal student loan to attend a school that's non-operational due to a hurricane, the Department of Education is proposing legislation that will relieve students of any obligation of having to repay federal aid they received during the current term at colleges where they've ceased operation. So if you would like to see more of that, in other words, if you want to be relieved of the obligation, you have to let your representatives know, you have to let the Department of Education know you would like to push for that legislation that basically says that any loans that were lent to hurricane affected school or hurricane affected student would just be cancelled outright. You'll not be held liable for those loans because obviously you didn't make use of them.
If you are a student at a hurricane affected school you can not directly transfer your federal student aid. Your new school, however, can award you financial aid based on the original FAFSA you submitted. So, to receive aid from a new school, the first thing you have to do is contact the school's financial aid office and let them know you are interested in attending. You don't have to file a new FAFSA but you do need to have the new school added to your FAFSA. The best way to do that, again call the Department of Education's toll-free number 1-800-4-FedAid. After the school has received your FAFSA and information, it will provide you with information about financial aid eligibility there. This is true for areas affected by hurricane Katrina and areas affected by hurricane Rita and presumably that will be affected by hurricane Wilma.
That's about it. One other thing, if you need your financial aid records for providing them to another school or something, again call the Department of Education. A very, very long answer to Kimberly's question about attending Delgado College. Like I said, just call the Department of Education that's your best bet for ensuring your financial situation is straightened out.
Alright, let's move onto another piece of Podsafe Music.
That was Overwhelmed by Mogle, new by the Podsafe Music Network.
Alright, let's move onto today's scholarship update. Today's scholarship update is going to be the University of Kansas, the entire University of Kansas, disadvantaged students are being invited to visit Kansas University, have fees paid and some costs deferred. There are two special visit days and days, October 27th and November 7th. Open to seniors who are members of Trio, which helps disadvantaged students complete a post-secondary school education. Registration is on a first-come-firs-serve basis. What these Trio Programs are like Upward Bound, Talent Search, education talent search. Kansas University says if you apply and are accepted to come on these two special visit days, as a senior you'll be assisted with filling out their application forms, their scholarship applications, and you can qualify for a waiver for the school to pay for your application fees so you don't have to pay a fee to apply at the University of Kansas. Those who qualify will also receive or will defer a $300 enrollment deposit, the $35 application fee, and the $300 housing prepayment fee. These fees will be deferred until your acceptance is confirmed. The admission scholarships will also pay for transportation costs for students who can not otherwise attend. So, you would basically get a literally a free ride to come check out Kansas University. To apply for admission to receive payment of the application fee and other cost deferments, students must submit a hard-copy application for admissions scholarships, a high school or college transcript, and ACT or SAT scores, the fee grant application for those applying for the scholarships, a scholarship essay and an activity summary. To qualify for the fee waiver you need to have received an ACT or SAT fee waiver, participated in the Federal Free or Reduced Lunch Program or participated in one of more of the Federal Trio Programs or Project Discovery. For more information you can call the admissions office at the University of Kansas at 785-864-3911 or visit them on the web at www.admissions.ku.edu. I'll put links to this in the show notes of course at www.financialaidpodcast.com. So that you can check it out. And basically the University of Kansas is looking for talented but economically disadvantaged students to come study there. So if you meet this criteria, give them a call. See what they're all about. See you can make those two special days and possibly qualify for a scholarship. So, the University of Kansas in its entirety is today's scholarship update.
Alright, let's finish out the show today with one more piece of Podsafe Music.
Alright folks that going to do it for today's show. It is just a little bit nearing 30 minutes here so we're going to wrap it up. As always, I should probably tell you, that last piece of music was Diane Ward, She Waits, part of the Podsafe Music Network. You can find any of the music in today's show as well as any of the topics we talked about on our website at financialaidpodcast.com. Look for the show notes link. If your not subscribed to the podcast get subscribed. It's really easy, again directions are on the website financialaidpodcast.com. If you really like the show, let two of your friends at least, know about it and prefereably help them get signed up for it. It's very easy just download iTunes and follow the directions on our website. If you have feedback, comments, questions, confusion, audio feedback email me at email@example.com. I'd be happy to answer your questions on the air. Alright, otherwise we will see you tomorrow for another happy Friday edition of the Financial Aid Podcast. Stay tuned. Stay subscribed. Take care.