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Daily Aid 41: MASFAA Financial Aid Conference Day 2

Fri, 21 Nov 2008 12:11:39 +0000

Still on the road today, attending the last day of the MASFAA financial aid conference. Some insights from yesterday…

The state of Massachusetts so far has not cut budgets for financial aid for FY09, which is good news for Massachusetts students. That said, with the current economic pressures, that status is not guaranteed in the coming year. At the same time, Massachusetts colleges, especially public and community colleges, are reporting record enrollments. One community college leader reported that they were bursting at the seams, saying that enrollments were challenging their resources.

At a regional update, many financial aid administrators reported they are starting to receive more appeals for financial aid than normal in the last two weeks. Students are asking for more aid because of economic pressures on their families.

There were a ton of debt numbers with regard to college students in the financial literacy session. A few select ones:

- Over 60% of first year college students max out their first credit card within a year.
- Indebted adults between 18-24 pay on average 30 cents of every dollar earned on debt.
- Over 1/3 of college students graduate with $10K or more in credit card debt. Not student loans - credit card debt.
- Over 25% of college students regularly pay late fees on credit cards.

During a conversation about scholarships, one of my colleagues pointed out that 2008 scholarships and endowments were already funded at the end of 2007, which means that 2008 scholarships are largely unaffected by the economy. Not so for 2009 - so expect scholarship hunting to be a lot more competitive, with many more students chasing potentially fewer dollars. Be prepared for this by hunting now - add December 31 to your scholarship search queries to see if you can round up some last end-of-year scholarships now.

Finally, this coming year is going to be one in which you’ll need a good relationship with your financial aid officer. Between new latitude for professional judgements and new economic pressures, that relationship could mean quite a bit.

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Reminders
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+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook
+ Online degrees programs and directories at Edvisors.com
+ Free college scholarships contests!
+ Open an FDIC-insured savings account today!
+ Stafford federal student loans at StaffordLoan.com
+ Parent PLUS loans at ParentPLUSLoan.com
+ Graduate student loans at GradLoans.com
+ Private student loans available at any time - visit PrivateStudentLoans.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ The Financial Aid Podcast is a publication of the Student Loan Network.

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Daily Aid 40: The MASFAA Financial Aid Conference, Day 1

Thu, 20 Nov 2008 12:30:54 +0000

Daily Aid 40: The MASFAA Financial Aid Conference, Day 1

It’s been a fascinating and somewhat troubling time here at MASFAA, the Massachusetts Association of Student Financial Aid Administrators. Fascinating because I’ve picked up a ton of useful information about changes in financial aid, gotten great feedback on the Scholarship Search Secrets eBook and the FAFSA Guide eBook that we publish, changes in financial aid procedures, and other great tips from colleagues about how to handle certain situations.

A few changes I thought especially noteworthy:

- The FAFSA changes for this year that are significant, such as dislocated worker and homeless youth, have no official documentation for verification, which means that financial aid administrators and government officials are having to create forms for documentation.

- Professional judgement overrides for financial aid administrators have been made more flexible, including an unusual override that lets a student borrow up to the full amount of an unsubsidized Stafford loan without the FAFSA.

- Convicted sex offenders no longer qualify for the Pell Grant. However, there’s no process in place to document or verify who is or is not.

- There are a lot of ambiguities around the labor language for dislocated workers. For example, who is underemployed vs. unemployed. The Bureau of Labor Statistics has some measures, but do BLS/Department of Labor definitions apply to the Department of Education?

- For colleges that use institutional methodology for determining financial aid need, there will now be discrepancies between that method and federal methodology, which is what the Department of Education uses. Some of the items that the federal methodology eliminated, such as foreign income, are still used by institutional methodology, which means that some students will have different need levels depending on what college they apply to.

Because of the many regulatory and procedural changes in the upcoming year, the most important piece of advice I can give is that it’s vital, absolutely essential, that you have a good relationship with your school’s financial aid office. Do your level best to be on great terms, first-name basis, with your financial aid counselors and staff, because with all of the ambiguities and interpretations for the new changes, that relationship may determine how much help you get.

There are some other, smaller bits of information which will find their way into the FAFSA guide and other publications, blogs, and newsletters in the days and weeks to come, but these were some of the highlights from the event so far. Today is day 2, and lots more to study and learn.

As for troubling, in many private conversations with my colleagues, there’s been a great deal of concern about the economy and where things are headed. The general consensus is that financial aid in the year ahead will be asked to do more than ever with fewer resources than ever, and that’s a tall order in any environment, much less in the current economy. We’ll see what’s ahead, and as always, you’ll get the news first from the Student Loan Network and the Financial Aid Podcast.

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MASFAA 2008 Financial Aid Conference

Wed, 19 Nov 2008 14:51:12 +0000

I’m at the Massachusetts Association of Student Financial Aid Administrators this week, and materials from my presentations and others will be put here as they’re available. If you attended one of my sessions, thank you so much for being a part of the sessions, and please give me feedback about how the session materials can be more useful to you, as well as how the Student Loan Network can better help you!

Scholarship Search Secrets slides

Scholarship Search Secrets

View SlideShare presentation or Upload your own.

Scholarship Search Secrets Video

FAP886: Mark Nazario, Cleveland State University Interview

Wed, 19 Nov 2008 13:00:04 +0000

FAP886: Mark Nazario, Cleveland State University Interview

Listen now:

Expert Interview

I had a chance recently to speak with the director of undergraduate admissions at Cleveland State University, Mark Nazario, about getting into college, what’s important, what’s not, and what students should be doing to improve their chances of getting into the school of their choice. A terrific 18 minute interview!

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The Perfect Senior Project

Wed, 19 Nov 2008 04:27:07 +0000

Over dinner with Professor Mark Frydenberg of Bentley University, the topic came up about how new media could be used as part of a senior project. Here’s an idea I’d love to throw out to other college seniors and students to see what you think. We know new media is powerful. You have unparalleled access to some of the smartest people in the world, some of the most well connected. At the same time, as a college senior, you’re looking to do something to make your mark on the world right away, because distinction will set you apart from the millions of other degree holders graduating this year. Distinction will help you land a job, perhaps even get you an offer before you start looking.

So what could you do as a senior in marketing, business, or information systems? Try making a real-life case study of new media put to use. Pick a local charity that needs the help, and focus an all-out campaign on raising money for that charity using all of the new media tools and connections that you’ve got. Figure out how to find potential donors on Twitter and LinkedIn, gather allies and collaborate using Facebook and Google Docs, and use the opportunity for a senior project to make the world a better place. The charity will benefit, your community will benefit, and you’ll have something for your LinkedIn profile that you can be super proud of.

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Daily Aid 39: Twitter scholarship, no bailout for student loans yet

Tue, 18 Nov 2008 13:14:56 +0000

Daily Aid 39: Twitter scholarship, no bailout for student loans yet

Student Financial Aid News

From Bloomberg:

The Bush administration told congressional aides it won’t ask lawmakers to release $350 billion remaining as part of the $700 billion U.S. financial- rescue package, people familiar with the matter said.

The administration of President George W. Bush ends in less than 10 weeks, and a delay in submitting a request to lawmakers would leave it to President-elect Barack Obama to tap remaining funds in the bailout fund.

Commentary

For those hoping or waiting for bailout funds for the student loan industry, especially for private student loans, the wait will be longer, at least until the Obama transitional government is seated on January 20, 2009. What does this mean for you? Unless the existing allocated funds from the bailout find their way to student lending, what we see is what we get for the moment. That means that federal student loans like the Stafford loan and parent PLUS loan remain plentiful, and private student loans remain restricted to only those with outstanding credit.

Some companies will turn over budgets and credit lines as the calendar rolls over, which is worth noting, but for the time being, assume that the credit crisis will continue to restrict availability of lending across the board.

Scholarship Update

This is really cool. We’ve profiled the Truman Foundation Scholarship before, but now they’re keeping applicants up to date about the process via Twitter.

Here’s the scholarship itself, valued at $30,000.

Here’s their Twitter account. What a clever way to keep candidates informed that’s lightweight and simple!

From the site:

Our updates could include everything from “Sending a mass email on appeals process.” to “Notifying the Nashville Finalists by email.” We will post if we have difficulty with our server or email. We will also post answers to frequently asked questions and make announcements about additions to the website. For those Faculty Reps who worry about missing updates, it is a good way to reduce anxiety during the application cycle. Everyone will know exactly where we are in the process at all time.

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Daily Aid 38: FastWeb student loan survey, financial aid crisis

Mon, 17 Nov 2008 13:18:16 +0000

Daily Aid 38: FastWeb student loan survey, financial aid crisis

Student Financial Aid News

You might not know this, but I’m also the editor of FAFSAonline.com, our free FAFSA guide web site. We’re getting ready to update the site for the 2009-2010 FAFSA and need your help. If you’ve used FAFSAonline.com, please leave feedback and suggestions on this blog post today so that we know what to do to make the site even better.

From Inside Higher Ed:

A national survey by FastWeb, a free scholarship identification service, found high percentages of students and families being rejected for just about every type of student loan. FastWeb acknowledged the dangers of selection bias in its survey and those who are satisfied with the availability of aid may be unlikely to use its services. But the large numbers of students who do suggest some significant numbers of families are experiencing loan rejections.

Commentary

Interesting that in the survey results, parents are being denied a federal PLUS loan at a rate of 55%. PLUS loans have much looser restrictions for credit history than private student loans, which means that at least for the audience sampled by FastWeb, consumer credit histories and ratings have deteriorated far more than is generally known.

Here’s an important fact that is often overlooked. If a parent is denied a PLUS loan for any reason, the student immediately becomes eligible for additional Stafford loans, as if they were an independent student. If your parents are certain they’ll be declined for a PLUS loan based on poor credit, this may be a way to get additional federal student loan money.

From The Albany Times Union:

Kathy Gailor, the Director of Financial Aid at the University of Bridgeport, commented on a hypothetical situation where federal aid was restricted in addition to the drying up of private loans:

“If there is a severe cutback in federal aid, students should immediately investigate the numerous private scholarship opportunities that exist. Many of these scholarships go un-rewarded every year despite the fact that a simple two page essay may be all that’s required to apply. In addition, students should start looking for summer jobs now rather than, as in the past, waiting until Spring to begin the search.”

Charlene J. Haykel, Managing Principal of the The Haykel Group, suggests high school parents should “borrow from the cash value of their life insurance policies; take an early distribution Roth IRA (if parents have one) but only after financial aid has been awarded so it won¹t reduce the amount of aid received by the student.” Mrs. Haykel also suggested students look at nontraditional sources of lending such as My Rich Uncle, or the peer to peer lending sites such as FYNANZ “that uses non-conventional underwriting criteria and will loan to people with poor credit scores if other information is provided.”

Commentary

Ms. Gailor is mostly correct - the only comment I’d add is that not many scholarships go unrewarded. Many do have just a handful of applicants, but it’s a bit of an urban legend that there are millions of dollars just sitting around unused every year.

Ms. Haykel gives some advice that I think needs clarification. If a parent or student takes an early distribution from an IRA or life insurance policy, it’s true that it won’t hit your financial aid eligibility for the current year if you do so after you file the FAFSA. That said, the distribution will hit you and impact your financial aid next year, along with any tax penalty that you take.

The double whammy of a potential tax penalty in the following year combined with a reduction in aid because you cashed out or borrowed against retirement makes this choice less than optimal. It’s a short term, last resort solution that has consequences the following year, making future financial aid more difficult. If that’s a tradeoff you’re okay with, then that strategy may work. Just be aware that there are consequences down the road for this strategy.

Scholarship of the Day

Brickfish College Must Haves scholarship. College is in full swing and you’re back to rushing to class and late night cram sessions. How do you maintain? We want to hear about your favorite college must-haves that make student life bearable. Not in college yet? We still want to know what items you deem college must-haves. From shower flip flops to munchies, iPods to mountain bikes, laptops to notebooks, tell us about your essential items and you could win a $1,000 scholarship or cash!

Details at our free college scholarship search site.

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How to raise money for the Student Platinum savings challenge

Fri, 14 Nov 2008 19:25:42 +0000

I’ve been watching the Student Platinum $500 Savings Challenge bloggers for a few days now, and something interesting has struck me.

Everyone is talking about how they’ll save money, about how they’ve committed to putting money aside. Except for a few folks doing the soda can recycling thing, no one is talking about how to bring more money in the door. Saving is easier when you have more money to work with - which seems like a blatantly obvious, trite thing to say, except that it’s not on anyone’s radar.

Don’t get me wrong. I encourage frugality. I encourage cutting back on discretionary expenses. However, at some point, you can’t cut any more. You can’t staunch expenses any further without a serious, really unpleasant reduction in your quality of life - which in turn makes you less likely to stick with a savings program.

So let’s talk in this blog post today about how to get more money coming in the door.

Obviously, as many have mentioned, working a job is a way to bring in some income, and the more you work, the more money you bring in. Downside - the more you work, the less time you have for academic study, which is the point of college.

Incremental income can indeed come from recycling, especially if you’re smart about it and gather recycling at the right times & places, like after frat parties when there’s literally cases of empties just sitting on the sidewalk. A guy in my town cruises up and down the streets on garbage day and simply loads boxes of recycling into his station wagon before the town claims them.

The recycling idea is a starter for a much bigger idea, the idea of arbitrage, unequal pricing for equal things. Take a look at the free section of your local Craigslist. How many of those items could you obtain? If you live in a major city, chances are there’s a ton of free stuff that someone is just too lazy to get rid of, so they list it for free, even if it’s still usable or an easy fix if you know the right people.

Then take the free stuff, assuming it’s in good condition, and resell it. List it on Craigslist in the appropriate for sale section at cut-rate prices, or on eBay if it’s sufficiently valuable enough. List it on your campus bulletin boards and other places buyers congregate. Got a TON of stuff? Find a local flea market and rent a table once you’ve gotten a resale business going - the local flea market here charges $60 per week for a large booth, so if you can swing that with previous sale profits, you can gain access to a lot of buyers and foot traffic.

Think that’s fast money? Try services like PhoneRaiser to recycle old phones and stuff.

Not up for the challenge of a physical goods auction house? Look online. See what affiliate programs like Shareasale (disclosure: paid link, hereafter [PL]) you can sign up for, and then see what merchants whose stuff you like you can resell. I’m serious when I say that the Financial Aid Podcast sold over $700 in random stuff like Halloween costumes and personalized checks. For a major corporation, that’s barely a soda budget, but for a college student, that’s rent in some parts of the country - not to mention an easy win for the $500 savings challenge. You can sign up for programs like Shock Coffee [PL], and resell on your personal web site highly caffeinated beverages [PL] as well as many, many other products.

Saving doesn’t just mean reducing what you spend - it also means earning more. Try some of these approaches and see if you can bring some more cash in the door to help you achieve your savings goals.

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FAP885: Financial aid crisis, student loans, free stuff

Fri, 14 Nov 2008 13:31:51 +0000

FAP885: Financial aid crisis, student loans, free stuff

Listen now:

Weekly Financial Aid Roundup

Federal student loan programs get a shot in the arm.

A massive overview of the new GI bill.

The Coming Financial Aid Crisis, Part 2.

Scholarship of the Week

The Assumption College Merit Scholarship Program was established to reflect the College’s commitment to upholding a campus culture that champions academic excellence and student leadership. Scholarships of up to $20,000 are awarded to students whose high school records demonstrate strong academic achievement, leadership, and potential for success at Assumption College. All students who apply and are admitted to Assumption College are considered for these awards. Presidential Scholars will receive scholarships of $20,000. These scholarships are guaranteed for four years, provided the recipient maintains the required level of academic achievement at Assumption.

Details at our free college scholarship search site.

Jobcast

With the most recent jobs report showing significant weakness, there’s never been a better time to focus on improving your personal career network. Start by using LinkedIn to build out your profile and gather recommendations, then hit up social networks. Check out this video tutorial on powering your LinkedIn profile.

Mail Bag

Kelle writes in:

I’ve been thinking about getting my Masters degree, but I’d need to get some financial aid to do it. What’s the chances of me actually getting funding these days?

For graduate Stafford loans, your chances are excellent. There’s also the graduate PLUS loan to cover the remainder of the cost of education. Those are also widely available and can cover up to the cost of education.

For graduate private student loans, those are much harder to come by. Thankfully, the graduate PLUS loan can do exactly the same thing.

Be sure to do some exhaustive scholarship searches for your master’s degree as well. Whereas a lot of undergraduate scholarships focus on need, graduate scholarships and fellowships tend to focus on field of study.

Free Stuff Friday

Free Christina Aguilera perfume.

Free 8×10 from Walgreens.

Tether your iPhone for free.

Penn State living wage calculator.

Free sound effects.

Top recession-resistant jobs.

Old Country Free Buffet Meal - Buy 1 Get 1 deal.

Same deal with Arbys.

There’s lots of free stuff to be found online if you’re sharp at Googling.

Free Song of the Week

Cello Journey, Bach Prelude from Suite No.1

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