FAP445: Nerd alert, paying for the student loan program in Washington, Norwegian scholarship, Geoff Smith

Student Financial Aid News
+ Late payments for most consumer loans rose in the third quarter of 2006, according to the American Bankers Association.
+ Late payments in eight types of closed-end installment loans, known as the composite ratio, increased to 2.12% of accounts on a seasonally adjusted basis in the third quarter from 1.96% in the second quarter of 2006. Delinquencies for this ratio hit 2.17% in the third quarter of 2005.
+ The ABA’s quarterly survey of more than 300 U.S. banks tracks the percentage of consumer loans that are 30 days or more past due.
+ From the moment it became clear that Democrats would control the 110th Congress, it was assumed that banks and other entities in the guaranteed student loan industry could have a tough time with the new majority. It didn’t take long for that prediction to come true.
+ Although Democratic leaders still aren’t saying so officially, financial aid lobbyists said Tuesday that lawmakers have decided how to pay for their plan (estimated at about $6 billion) to cut the interest rate on many student loans in half over five years — and that the legislation they will introduce this week to do so (H.R. 5) would do so by cutting several subsidies that the federal government now pays to banks, guarantee agencies and other participants in the federal guaranteed loan program.
+ Among the changes, the Democratic plan would:
+ Reduce the amount that the government reimburses lenders for loans made on or after July 1 that go into default, from 97 cents to 95 cents for every dollar that is not paid back.
+ Ending the “exceptional performers” program, which increases the insurance payments to loan servicers that consistently comply with Education Department regulations.
+ Increase to 1 percent, from 0.5 percent, the one-time fee that lenders must pay the government to consolidate a borrower’s loans. (This fee, like some of the other proposals, is described as a fee for lenders, but such costs are sometimes passed on to borrowers.)
+ Reduce to 20 percent from 23 percent, as of July 1, the amount that guarantee agencies retain from the money they recover from borrowers who default. The rate would drop to 16 percent by 2011.
+ Cut by 10 “basis points” (or 0.1 percentage points) the return that lenders receive on federal loans.
+ Beginning in February, the University of Sioux Falls will offer a one-credit dating course called “Finding Dates Worth Keeping.”
+ Laurie Chaplin, a relationships counselor and licensed therapist who’s been married 28 years, will be the instructor.
+ Finally, a new survey for Financial Aid Podcast listeners – please complete it to help make the show better!

Scholarship Update
+ Hovland Scholarship is a $500 award which is available to students of Norwegian descent. Applicants must have at least a 2.0 GPA and demonstrate financial need.
+ Deadline: July
+ Application & Information: Available in the Financial Aid Office.
+ Details at our free college scholarship web site

Nerd Alert
+ Apple iPhone
+ Apple TV
+ What do these devices mean for you?
+ You probably won’t and shouldn’t pay for them with student loans
+ Better web access on the go with the iPhone
+ Podcasts available through both

Podsafe Music
+ Geoff Smith, Not on the Radio
+ Music via the Podsafe Music Network

Reminders
+ Private student loans
+ Stafford loans | Other federal student loans
+ Student loan consolidation at StudentLoanConsolidator.com
+ FAFSA form online filing at FAFSAonline.com
+ Financial Aid Podcast Show Notes at FinancialAidNews.com.
+ The Financial Aid Podcast is a publication of the Student Loan Network.

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