FAP496: Free Stuff Friday on personal finance, Cuomo sues EFP, BRTC followup, Andy McKee

Student Financial Aid News
+ How did BRTC go? Not #1, but in top 10 in a few places around the world.
+ After all is said and done, probably 10,000 purchases or so
+ Scholarship yield $4,500 – about a year of community college or in state tuition for a public 4 year college
+ May be up to a month before we get full purchase data details
+ There is money on the table – make sure you’re signed up with Scholarship Points!
+ From Inside Higher Ed: New York Attorney General Andrew M. Cuomo revved up his campaign Thursday against what he just last week termed the “unholy alliance” between colleges and lenders. Not only did he announce an intent to file suit against the California-based Education Finance Partners (EFP) over the private loan company’s alleged “deceptive practices,” but he also named the names of 12 colleges allegedly accepting EFP’s “kickbacks”: Baylor, Boston, Clemson, Drexel, Duquesne, Fordham, Long Island, Pepperdine, St. John’s and Texas Christian Universities, plus Washington University in St. Louis and the University of Mississippi.
+ In a nutshell, Cuomo charges that the private lender paid institutions in exchange for preferential treatment and a spot on their lists of “preferred lenders.” (Preferred lender lists, provided to students and compiled by a university, are a powerful tool in shaping which companies students choose for a loan: Cuomo estimates that 90 percent of students choose lenders from these lists.)
+ Furthermore, the “revenue-sharing agreements,” also referred to by Cuomo as “kickbacks,” were often based on a tiered system, Cuomo said – meaning the more loans referred to the company by the college, the higher the percentage return on the value of the loan for the institution. Neither the colleges nor EFP adequately disclosed the financial terms of their agreements to students, Cuomo said.
+ Dallas Martin, president of NASFAA, refuted the use of the term kickback, as nothing was done under the table and no one personally profited
+ That system does provide, even if inadvertently, an economic incentive
+ IHE: The Pennsylvania Higher Education Assistance Agency on Thursday adopted strict rules on reimbursing employees and family members for travel-related costs, following much public criticism of past spending that has come to light, The Pittsburgh Tribune-Review reported. Among past spending that would now be barred: funds for facials, fly-fishing, $25 cigars and pedicures.
+ The University of Pennsylvania on Thursday announced that it was raising from $50,000 to $60,000 the family income level at which it would replace loans with grants for needy students. When Penn set the $50,000 level last year, it prompted Harvard University — then offering a similar program for families with incomes of up to $40,000 — to raise its income level to $60,000.
+ From Bloomberg: The subprime credit crunch is beginning to ensnare even borrowers with better credit. Lenders are increasingly refusing to lend to homebuyers who can’t make a down payment of more than 5 percent, especially if they won’t document their income. Until recently such borrowers qualified for so-called Alt A mortgages, which rank between prime and subprime in terms of risk. Last year the category accounted for about 20 percent of the $3 trillion of U.S. mortgages, about the same as subprime loans, according to Credit Suisse Group. “It’s going to be very difficult, if not impossible, to do a no-money-down loan at any credit score,” said Alex Gemici, president of Parsippany, New Jersey-based mortgage bank Montgomery Mortgage Capital Corp. Companies that buy the loans “are all saying if they haven’t eliminated them yet, they’ll eliminate them shortly.”

Scholarship Update
+ Cardinal Joseph E. Ritter Memorial Endowed Scholarship, $12,500 per year
+ Performing arts, visual arts, or education major or minor
+ Financial need
+ Demonstrated commitment to values exhibited by Cardinal Ritter
+ Approval by departmental chairperson
+ Deadline for application: February 1
+ Details at our free college scholarship search site

Free Stuff Friday
+ ING Direct savings and checking
+ Free desktop backgrounds that were supposed to be in Windows Vista
+ Xee image previewer for the Mac
+ Buddi personal budget manager
+ Highrise CRM from 37signals – great for job hunting!
+ Proximity bluetooth for the Mac
+ Free H&R Block Tax Cut Software!

Podsafe Music

Download “Dreamcatcher” (mp3)
from “Dreamcatcher”
by Andy McKee
Candy Rat Records

• Buy at iTunes Music Store

More On This Album

Promo
+ Mitch Joel, Foreward Thinking
+ Check out Mitch’s presentation at PodCamp Toronto if you’re thinking of career change
Reminders
+ Private student loans
+ Stafford loans | Other federal student loans
+ Student loan consolidation at StudentLoanConsolidator.com
+ FAFSA tutorials and free help
+ Financial Aid Podcast Show Notes at FinancialAidNews.com.
+ The Financial Aid Podcast is a publication of the Student Loan Network.

Direct MP3 file download: MP3 file