WalletPop

Is an undergraduate degree overrated?

Josh Smith — 2008-05-15T12:00:00+00:00

Just because those with higher education have lower death rates doesn't mean that bachelor's degrees are all they are cracked up to be either. In an column for the Chronicle of Higher Education Marty Nemko, a college consultant and author, shares his view that the bachelor's degree may be the most overrated product in America. Marty cites many factors and studies in reaching this conclusion but the key factor seems to be under-prepared students. Thankfully Nemko provides more than a headline by linking to supporting facts and most importantly offering suggestions to fix the problem!

Doesn't the under-preparation of students for college speak more about the job high schools are able to do than the job that colleges are doing? Not that I can blame the high schools who have to spend a significant chunk of time on standardized test taking rather than instilling knowledge in children. Sadly even a high percentage of students who are prepared coming out of high school won't make enough in the long run to justify the cost of a bachelor's degree. Another one of the facts Nemko cites is that the literacy rate amongst college graduates is currently declining. Take a second to absorb that; the number of illiterate college graduates is rising!These trends have lead to a cheapening of the bachelor's degree no matter what your field of study is. Think of this whole deal as a manufacturing process rather than education for a second and perhaps it will become a little clearer. If you produce DVD players for years and years and all of the sudden your flagship players start slipping in quality, breaking early, not reading discs and just being poor products. What does that do to your brand? That is exactly what happens when colleges churn out individuals who haven't actually gained the knowledge they need to graduate. I am all for colleges accepting students who are at a lower academic level or who have an impairment that affects literacy but only if these students are provided assistance and held to the same academic standards as everyone else. If students are just pushed through a four year school like a DVD player on the factory line without quality control the institution of higher education as a whole suffers.

What do you think? Are college degrees overrated? It seems that a masters degree is the new bachelor's degree, at least according to the wanted ads in my local paper. Is this because of the cheapening of the bachelor's degree or an increased need for people with advanced training?

Read | Permalink | Email this | Linking Blogs | Comments

Higher education results in lower death rates

Gary E. Sattler — 2008-05-14T14:15:00+00:00

Filed under: College, Retire, Health

Science Daily released an article today which cites clear scientific evidence showing that the better educated we are, the longer we tend to live. The study, which was conducted by the American Cancer Society and the Centers for Disease Control and Prevention, analyzed data from more than 3.5 million deaths occurring between 1993 and 2001. Science Daily reports that the study concluded; "People with less education have fewer financial resources, less access to health insurance or stable employment, and less health literacy." It would seem that not only do the rich get richer and the poor get poorer, but the poor get deader sooner also.

The greatest percentage increase in death rates was reported to be within the social class, white women. In that group, death rates increased by 3.2% annually for women with less than 12 years of education. The group of white women with more than 12 years of education also had a statistically significant increase in death rates of 0.7%. Men on the other hand, have seen increases in longevity. Well educated black men showed the greatest improvement, with a 36% decreased death rate. Well-educated white men also posted longevity gains, with a 25% decreased death rate.

My street level analysis is this: The education factor speaks for itself. Well educated people have the knowledge and resources to take better care of themselves. This is not to minimize the fact that they also tend to do fewer stupid things. Women, as they increase their power, leverage and exposure in this world, also increase their stresses and risks. Black men are beginning to make up for decades of high mortality rates, by working together to enhance their socio-economic well being overall. Men in general have begun to admit their vulnerability to the ravages of life and more of us are willing to admit when we need help.

As for us educated white guys living longer, well, that's probably just dumb luck.

Just say no to peer-to-peer student loans ... at least for now

Zac Bissonnette — 2008-05-13T11:30:00+00:00

Filed under: College, Kids and Money

According to BusinessWeek, "In recent months, peer-to-peer lending sites such as Prosper and Virgin Money USA have introduced student loans or started marketing existing offerings to families looking for college funds. Others, including startups GreenNote and Fynanz, are focused exclusively on making college loans."

It's not a surprising development. Peer-to-peer lending has been growing in popularity for years and the tightened credit market is making it tougher for some students to secure loans for college.

There may be a future in peer-to-peer student loans but I don't see it happening anytime soon. Here's why:

Subsidized student loans are always preferable. Before exploring any private loans, college students should complete the FAFSA form and take steps to see how much they can borrow at artificially low interest rates.

Large financial institutions have the ability to tailor loans to the needs of students. The loans can be stretched out over long periods, deferred under certain circumstances, and more. Sites like Prosper.com are really not the place for complex financial instruments.
The world of student loans is highly competitive, and various websites including eStudentLoan.com make it easy to compare rates and terms between various banks. It's unlikely that you'll be able to get a better rate from a peer-to-peer site -- unless of course you're borrowing from friends. But if you're borrowing from friends, why do you need a networking site to act as a middleman for a hefty fee?

While the student loan market has tightened, there is still money available for students looking to go to college. If you can't find a conventional bank willing to lend you the money you need, you have to wonder whether you're borrowing too much and need to consider less expensive options.

Read | Permalink | Email this | Linking Blogs | Comments

College student in need of a credit card? Look no further!

Zac Bissonnette — 2008-05-12T09:30:00+00:00

Filed under: College, Cards, Kids and Money

As the class of 2008 graduates from high school, a good chunk will be heading off to college. There they will be bombarded with free t-shirts and bottle-openers: if only they'll just take a quick moment to fill out this credit card application. The average college student will graduate with $3 thousand in credit card debt -- which might not sound so bad until you think about the fact that many graduate with none, meaning that the average student who uses a credit card in college graduates with considerably more than $3 thousand in credit card debt. And don't even get me started on student loans.

Since the vast majority of kids will get credit cards (It can be helpful for building a credit history), your role as a parent is to educate Junior about the process. Here are some tips for helping your first time credit card user get off to a good (or at least not destructive start):

Pick a card with no annual fee -- There's just no reason to pay a fee on your first credit card. Few college kids spend enough money for any rewards to justify the fee. Generally this will mean paying a higher interest rate -- tell your kid the interest rate doesn't matter because if he ever carries a balance you will disown him.
De-emphasize the whole rewards thing: remember, credit companies offer rewards because they increase their profits. Getting a $50 savings bond for every $2000 you spend might sound wonderfully financially savvy, but it isn't if the joy of saving induces you into overspending.
Urge them not to place anything other than necessities on the credit card: textbooks, gas, and other costs that aren't likely to increase due to the convenience of plastic. Clothing and especially restaurant meals should be paid for with debit cards or, better yet, cash.

Rather than wait for some snake oil salesman to sign your child up for a credit card when you're hundreds of miles away, take the opportunity to do it together, now. The CreditCards.com Student Credit Cards page has 9 cards for you to choose from, and you can click the links and fill out an application in just a few minutes.

Read | Permalink | Email this | Linking Blogs | Comments

How to save for college? Savingforcollege.com has the answers!

Zac Bissonnette — 2008-05-11T08:00:00+00:00

Filed under: College

I was watching the Suze Orman Show last night, and a viewer had emailed in with a question about saving for college. Suze immediately referred him to Savingforcollege.com, saying that it was the site for anyone need information on 529 plans, Coverdell plans, and everything else that makes saving for educational expenses a lot more confusing than it probably needs to be.

She's right: the site is awesome and easy to navigate. If you're in the fortunate position of being able to start saving for college before your child ships off, you owe it to Junior to spend some time looking at the site.

Here are some articles worth a look: Do grandparent contributions to 529 plans hurt financial aid eligibility? Can you use one 529 account for multiple children?

But perhaps more importantly: What is a 529 plan?

Read | Permalink | Email this | Linking Blogs | Comments

Is a college education really worth the price?

Bruce Watson — 2008-05-03T11:00:00+00:00

Filed under: College

Recently, a Darmouth College lecturer announced her plans to sue her students. Apparently, Dr. Priya Venkatesan was angry about the fact that her pupils were complaining to her boss and openly disagreeing with her. The final straw was when one of her classes applauded a student who argued with her. She subsequently sent them an e-mail that read, in part:

Dear former class members [...] I regret to inform you that I am pursuing a lawsuit in which I am accusing some of you [...] of violating Title VII of anti-federal discrimination laws [...] I am also writing a book detailing my experiences as your instructor, which will "name names" so to speak. I have all your evaluations and these will be reproduced in the book [...] Have a nice day.

In the weeks since her e-mail, Venkatesan's lawsuit hasn't been going very well. According to some sources, she was unable to find a lawyer to represent her, while other sources stated that she has retained a lawyer and is suing Dartmouth College. The basis for her lawsuit is Title VII of the Civil Rights Act, which guards against employment discrimination based on race, color, religion, sex, and national origin. Venkatesan apparently feels that, due to her race, Dartmouth failed to suitably protect her from her students.

The response of Venkatesan's students has been particularly interesting. One was quoted in The Dartmouth as saying "We didn't like her because she was not a good teacher, and she wasn't open to others' ideas [...] it had nothing to do with her race or anything like that." Another student noted that "You could tell she came into the class wanting to be a good professor, but I just don't think she knew what she was doing." Additionally, many of her pupils complained to Venkatesan's department head that she lowered the grades of students who disagreed with her.

It's very telling that Venkatesan's students seemed to have a problem with her ineffectiveness as a teacher and her unwillingness to entertain intellectual viewpoints that contravened her dogma. As a former university instructor, I found this story to be all too familiar. Like Venkatesan, one of my graduate professors was a combination literary theorist and medical history specialist. My teacher's focus was on breast feeding, and she vacillated back and forth between English and Women's Studies, brooked no dissent in her classes, and regularly railed against "Patriarchy," a hidden, monolithic force that was undermining all that was good and proper in the world. Sitting through her diatribes, I often wondered what the indoctrination to which she was submitting me could possibly have to do with literary interpretation. While I disagreed with her regularly, I also learned just where the line lay; it was clear that my final grade was based, in part, on my apparent acceptance of her sexist, misandrist perspective.

As a graduate student with an assistantship, I was taking the class for free, so I was able to laugh about a lot of the nonsense that I had to deal with. However, given that Dartmouth's tuition is currently over $45,000 a year, I can easily understand why Venkatesan's students found it so hard to smile. Like many college students, these kids probably thought that the purpose of college was to enhance their intellectual abilities, teach them a certain body of knowledge, and generally prepare them for the greater world. Instead, it sounds like they found themselves held hostage by a liberal-fringe dogmatist, and threatened with a failing grade if they refused to accept her perspective.

When I used to ask my students why they were in college, most of them responded that they were there to get "a good job" and "make lots of money." I would then suggest that they consider dropping out of school and look into becoming plumbers, undertakers, electricians, or car mechanics. These professions, I pointed out, were more lucrative than most of the jobs for which they were training. Unlike, say, sociologists, the world needs plumbers and electricians. To put it another way, while people might never require the services of a philosopher, they will always want to flip a switch and get light or push a lever to make their excreta disappear.

For most of my students, a college education was a given; it was "13th grade," an required next step that they had never questioned. On the other hand, given the ridiculously high cost of a college education, this might be a good time for many students to seriously question the actual utility of an advanced degree. While I greatly value the ability of a college education to advance a student's ability to think, I also acknowledge that many of my former students will never actually use that ability. To be honest, I also have to admit that a surprisingly large percentage of my former colleagues were more invested in indoctrination than intellectual discussion.

The sad fact is that a college education has become a prerequisite for all but the most menial office jobs, and the more prestigious the university, the more earning power it confers. This monopoly on job preparation means that colleges can pretty much charge whatever they want. Moreover, as Thomas Sowell notes, with the federal government underwriting the high cost of tuition, colleges have absolutely no reason to charge less. In fact, as a college instructor, I knew a large number of people for whom the cost of a college education far outstripped their earning potential. The most egregious was my friend who had paid $250,000 to prepare for a teaching career that started at a mere $30,000 per year, but I could offer numerous examples of people who spent years of study and thousands of dollars to get jobs that paid less than a lower-level management position at McDonald's.

As I noted before, one solution to the high cost of education is attending a community college for a couple of years. Perhaps the best solution, though, is to seriously think about your career and lifetime goals, and whether or not you really need to get an expensive, time-consuming degree to achieve them.

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He had to leave teaching, as it didn't pay enough for him to send his daughter to college!

Read | Permalink | Email this | Linking Blogs | Comments

A tip for getting into the school of your dreams: Lie like a $2 toupee!

Bruce Watson — 2008-04-29T12:00:00+00:00

Filed under: College, Ripoffs and Scams, Fraud

A few years ago, at my 10th high school reunion, I was surprised and delighted to discover that my former Sex and Marriage teacher, a man that I particularly disliked, had been scammed by a 27-year old George Mason student and sometime porn star. Apparently the young man, Anoushirvan D. Fakhran, aka "Jonathan Taylor Spielberg," posed as Stephen Spielberg's nephew, claiming that he was doing research for a forthcoming movie. My former teacher, now the principal of the school, allowed the young man to attend classes, showed him around, and gave him numerous privileges that ordinary (read: paying) students were denied. Ultimately, "Jonathan" was discovered and my alma mater was massively humiliated. I think my former teacher was farmed out to another school.

Recently, I was reminded of this as Yale University suffered a similar scam. Akash Maharaj, formerly of Trinidad and Tobago, got into Yale with the help of a forged letter of recommendation from one of Yale's professors. This letter, combined with a forged Columbia transcript, made him look very impressive, and Yale welcomed him to the school, giving him $31,750 in financial aid. He also received $7400 in federal scholarships, $6739 in loans, and $900 from a federal work-study program. During his time at the school, he received a literary prize, found a boyfriend, and generally seemed to fit right in. Unfortunately, things soured with his boyfriend, who ended up ratting him out to the University. Not long after, his forgeries were discovered and it all came crashing down.

A large number of people seem to be surprised that Akash was able to deceive Yale. Personally, having spent the last ten years working in academia, I'm impressed that he was caught. At my university, most of the administrators had worked their way up from the ranks of the professoriate, with very questionable results. After all, while a Ph.D in chemistry may be very useful in the lab, it doesn't really prepare one for the rigors of funding battles, tenure fights, or even something as simple as ordering office supplies. Moreover, I've met very few Ph.Ds who were overburdened with an excess of common sense. Frankly, I'm amazed that things like this don't happen more often.

I think the real lesson here is aimed at the next generation of college students. Rather than worry about grades and extracurriculars, smart students will start developing forgery skills, the ability to lie outrageously, and the art of exaggerating their curricula vitae. Hopefully, they will also learn the most important lesson of all: if their hard work and deception pay off, they get into the schools of their dreams, and they somehow manage to convince someone else to pay for it, the key is to then play it smart. Keep your boyfriend happy!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He has never lied on a job application. In fact, as he told the folks at Walletpop, he is a former cosmonaut, winner of the 1998 All-Namibian Speed-Skating Championship, and a part-time international assassin.

Read | Permalink | Email this | Linking Blogs | Comments

Concerned about the cost of college? Take summer classes locally!

Zac Bissonnette — 2008-04-28T10:00:00+00:00

Filed under: College, Kids and Money

As the spring semester winds down, college students are starting to figure out what they're going to do with their summers. Working, seeing friends, internships and perhaps a bit of travel are popular plans. But in light of the soaring cost of college, this might be an ideal time to look at a great way to save some money: Taking community college classes, transferring the credits, and maybe graduating college a semester or more early.

For an example of how this works, let's look at how a University of Massachusetts Amherst student might save money taking summer classes at Cape Cod Community College. UMass is a relatively inexpensive public university -- if you're attending a private college, the savings are probably much greater.

At UMASS, the total tuition and fees for one semester is $5,116 for an in-state student, not including room and board or any other expenses. A full-time student generally takes four or five three-credit classes per semester, working out to at least $1,000 per class.

You can take a three-credit class at Cape Cod Community College this summer for $394. If you take five, that could lop a full semester off your bill, saving you more than $3,000, not including room and board. And another thing: the sooner you graduate, the sooner you'll be working full-time at a more skilled job, so the actual addition to your net worth from this strategy could be well over $40,000.

A caveat: Because most community colleges won't offer the higher-level classes you need for your degree, this strategy works best for fulfilling general education requirements early in your college career. If you're a math major, community college might be a good place to take an English class over the summer.

Before you sign up, talk with your registrar's office to learn about the credit transfer process and find out which classes your college will give you credit for.

Permalink | Email this | Linking Blogs | Comments

Shocking! MBA students care about more than money

Zac Bissonnette — 2008-04-27T19:00:00+00:00

Filed under: College, Career

The image of MBAs that most people have is probably not a good one. But a new study from the Aspen Institute's Center for Business Education shows that business school students are motivated by, get this, altruism and a desire for an interesting, challenging work experience.

Students were asked to choose up to 3 of the factors that were most important to them as they looked for jobs. 64% mentioned challenging responsibilities, making compensation a distant second at 48%. Work life balance and the potential to make a contribution to society were the 3rd and 4th most important factors. Only 4% cared about job security!

Of course, what people will say on a survey and what they actually believe can be very different.

But here's my theory: many of the current MBA students are the children of the Baby Boomers, a generation marked by social consciousness and a desire to change the world. Perhaps some of this altruism has rubbed off on their business school children.

Read | Permalink | Email this | Linking Blogs | Comments

Student loan funds not such a sure thing anymore

Tracy Coenen — 2008-04-21T15:30:00+00:00

Filed under: College, Debt

There was a time when you prepared for college, "signed up" for student loans, and were virtually assured that the funds would be there for you. The idea of having to pay back big loans wasn't appealing, but you knew your education was worth it. The checks came, you went to the financial aid office to get them, and all was well.

But it's not quite so easy anymore. There's news that Sallie Mae, the nation's largest provider of student loans, may stop making new loans, at least temporarily. The company says the loans are no longer profitable, so it can't afford to do them anymore.

Last week, a news report brought to light a new issue: Student loan checks that bounce. The Boston Globe reported on a student who deposited a $16,000 student loan check, started using the funds, and then was notified that the check bounced. The check bounced because The Education Resources Institute Inc., a nonprofit agency that guarantees student loans, filed bankruptcy. The student will still get his funds after some paperwork is sorted out, but it has likely been a scary process for him.

More banks are likely to stop issuing new student loans as the business climate for the loans has changed and banks don't want to be involved with unprofitable loans. What does that mean for students? If they can't get the loans they once counted on, they may have to work more in addition to going to school, and they may even have to switch to part-time status in order to work more.

That's not the ideal situation for many students, but it's not going to be impossible for them to go to school. They may have to become more creative, cut back on some extras, and be willing to work more. But those who really value a college education will be able to still get one through good, old fashioned hard work.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

How to reach executive customer service at Sallie Mae

Josh Smith — 2008-04-17T14:30:00+00:00

Filed under: Borrowing, College, Simplification

Sallie Mae is a huge student loan company, and often times it can be difficult to get routed to the correct department to straighten out your loan issue.

Earlier this week I shared a simple plan for using your congressman to resolve student loan issues at any company, but today I'd like to share a way to get satisfaction if your issue is with Sallie Mae. The executive customer service department at Sallie Mae is known as the "Consumer Advocate Unit" and from my experience, is staffed with small group of knowledgeable and friendly people.

Both our congressman and our attorney general referred us to the consumer advocate unit, where we were given one point of contact. If this person was out of the office, whoever took our call would literally walk over to his desk and grab our file in order to help us out. On more than one occasion they called another lender on our behalf to arrange for the consolidation of loans away from Sallie Mae!

You can reach the consumer advocate unit at (888) 545-4199. Please use this number responsibly, and remember these people are empowered to help you. Treating the caller with respect and kindness, no matter your previous experiences with Sallie Mae, will greatly benefit you in the long run.

Read | Permalink | Email this | Linking Blogs | Comments

Congress holds hearing on student lending industry

Zac Bissonnette — 2008-04-15T11:30:00+00:00

Filed under: College, Kids and Money

Consider:

The credit crunch has a lot of people concerned that student loans will be difficult to come by. Companies including College Loan Corp., CIT Group Inc., NorthStar Education Finance Inc., HSBC Bank USA, M&T Bank and Zions Bancorp have recently stopped issuing federally guaranteed loans. In all, 50 lenders representing 12% of the market have stopped making these loans.
Sallie Mae has said it will no longer offer consolidation loans for federal loans.
State agencies in Iowa, Michigan, Montana and Pennsylvania have suspended their student loan programs.
It's an election year.

What does all this mean? Congressional hearings of course! At 10 AM EDT, a hearing on the state of the student lending industry convened, and lawmakers and several proposals aimed shoring up the market are floating through Congress.

I'm not so sure a little tightening in the industry is such a bad thing though. Student loans have become easy to get, allowing students to graduate from college with $50 thousand or more in debt, severely hurting their ability to get a good financial start in their adult lives.

Fewer student loans may encourage kids to pursue lower-cost options for education, and that will be good for them long-term.

Read | Permalink | Email this | Linking Blogs | Comments

Should you take out a student loan to pay off credit card debt?

Zac Bissonnette — 2008-04-15T09:00:00+00:00

Filed under: College, Cards, Debt, Kids and Money

An undergraduate friend recently shared his financial woes with me. He's about $8 thousand in credit card debt and has fallen behind on his payments. His parents have suggested that he take out a student loan and use it to pay off the debt over a longer period of time at a lower interest rate.

In theory, this makes sense. Paying a lower interest rate is always nice, and replacing delinquent revolving debt with a loan will help out his FICO score. To make this an even more lopsided decision, interest on student loans is often tax deductible.

Even so, I don't think consolidating the debt with a student loan is the right move, even if it's a good idea on paper.

The problem is that people who consolidate delinquent credit card debt and find themselves once again able to rack up big balances tend to do just that. Instead of being $8 thousand in debt, they up $16 thousand in debt. $8 thousand seems like a lot of money but if he spends the summer working 60 hours per week at $9 per hour, he'll earn $540 per week. If he scrimps and saves, he'll be able to make a big dent in the credit card debt. Of course he could consolidate it and do the same thing, but I somehow doubt that that would end up happening.

Taking out a student loans seems like a cop out to me, and a way to avoid dealing with the actual problem: owing a lot of money. Eventually my friend, who I hope is not reading this, will have to grow up and take responsibility for his financial life. A student loan in the situation is essentially a shovel to dig a deeper hole, unless there's a real change in behavior accompanying it. But if he was really committed to turning the situation around, he could work a ton of hours and spend less money.

As for the tax benefits, a student loan in this context does not appear to be tax deductible, as the IRS states that the loan can only be deducted if used for the "total costs of attending an eligible educational institution," which include "tuition and fees, room and board, books, supplies, and equipment, and other necessary expenses (such as transportation)."

I don't see anything in there about paying off credit card racked up buying clothing, cigarettes, and pizza. Of course you could probably deduct it and nothing would happen, but it's not kosher.

Unless he's ready to make serious changes in his life, taking out a student loan is a terrible idea. He should be looking to fix the problem, not thinking up creative ways to prolong it.

Permalink | Email this | Linking Blogs | Comments

Use your congressman to resolve student loan problems

Josh Smith — 2008-04-14T17:00:00+00:00

Filed under: Ask WalletPop, College, Debt

Isn't it time you started reaping the benefits of your local congressman's clout? Not yet ready to ask for a letter of recommendation for West Point? Have no fear because if you are the bearer of student loans and your loan company is shafting you, your congressman may be the key to a happy ending.

Getting some satisfaction with the help of your congressman or woman is so easy anybody can do it. Granted, like all problems and lending issues, it helps if you are in the right and have been paying your lender what the terms state. But this strategy may work even if you are close to being handed off to a collection agency.

As a little background: My wife had all of her student loans through Sallie Mae, affectionately referred to around our house as the devil. Several of these private loans which Ms. Mae was holding on to were pulling in 13.25% interest! We had included some of these loans in an initial federal consolidation which never worked out. Apparently the incoming fax line at Sallie Mae was hooked right up to a paper shredder because they never received our requests to consolidate. We tried again to consolidate my wife's private loans with Wells Fargo, who, just like our federal consolidator, never received a response from Sallie Mae. Fed up with the problems we were having, I did what any rational person would, I called my local news stations call for action. This is where I found out I could contact my congressman to get some satisfaction.

The first thing I did was reacquaint myself with my local congressman, Jim Jordan and I found out that he had a local office in my town. You can find your representative online at house.gov, the results should include information for his or her Washington office and links to the local offices they maintain. I chose to contact my local office in order to maximize the chance that the staffer would feel the need to help me out, being local and all.

I called up the local office and was transferred to the "top" local staffer who listened to my whole story including many lies we were told by Sallie Mae about the consolidation process. After expressing his astonishment he took down my info and shipped me out some forms to allow Jim Jordan to act on my behalf and a questionnaire about our loans and experience. My wife and I promptly returned the packet to our case worker, who let us know that we should hear back soon.

This is where it gets fun and exciting, soon after we began the process, Sallie Mae assigned us a representative who provided a direct line for the consolidation information to be routed through. We quickly began working with Wells Fargo to get our loans consolidated and anytime we ran into trouble our Sallie Mae caseworker would work directly with Wells Fargo to figure it out. In the end we got all of the private loans away from Sallie Mae and saved close to $300 in monthly payments and countless more over the life of our loan.

If you are having trouble with a difficult student loan lender then just follow the easy steps below:

Find your congressman/woman.
Call their local office.
Return the release paperwork and loan details
Wait...
~~Profit~~ Resolve your problem with executive customer service for your lender.

You may be surprised how much clout your local representative has with student loan lenders and the federal student aid ombudsman. Once you put these parties into play you'll likely find that the ball gets rolling much quicker with your current lender. This approach to resolution works best if you are in good standing with the involved lenders, stay tuned for more information on dealing with student loans.

Josh Smith is currently the holder of student loan debt which had been confused for a home mortgage by experienced bankers. He has been to hell and back with Sallie Mae and thus learned a significant deal about the student loan industry. If you have specific loan questions or requests for additional student loan topics please leave a comment below.

Read | Permalink | Email this | Linking Blogs | Comments

When credit cards are concerned, are college kids adults...or kids?

Tracy Coenen — 2008-04-07T18:30:00+00:00

Filed under: College, Cards, Debt

Are college students adults or not? Because the last time I checked, it seemed they were adults and capable of making their own decisions. In fact, they're capable of signing up for the military and capable of voting, so I'm thinking that the decision to sign up for a credit card might be within the realm of possibility for them.

But falling in line with our now-very-popular American way of blaming everyone else for our problems... credit card companies are taking heat for *gasp* offering credit cards to adults! How dare they!

A Milwaukee unit of the U.S. Public Interest Research Group is telling consumers that credit card companies are to blame for the debt of college students. And while I admit that the credit cards are the vehicle for racking up this debt, the blame must be placed squarely on the college students and their spending choices. How many college students do you know who got a new credit card and ran out and maxed it out almost immediately? But on the flip side, how many do you know who just held onto that credit card in case of emergency or for an occasional purchase? (Hint: There are lots more of the latter.)
The research group is blaming free t-shirts and free food for the boom in college students with credit cards. It seems that these students just can't stop themselves from signing up for a credit card when offered something as enticing as a t-shirt. Yikes.

I admit it: Credit card companies are out to make money, and they're willing to make a buck from anyone, at any time, for any reason. Many of the terms in credit card agreements are purposely confusing and punitive. But at some point, the consumer has to take responsibility for actually signing up for that piece of plastic and pulling it out of their wallet. Sorry, I'm just not buying the idea that college students can't handle credit cards and the credit card companies are to blame. It's time that these young adults start acting like the adults that they are, and that includes exercising some restraint over their spending.... even when a free t-shirt is on the line.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Read | Permalink | Email this | Linking Blogs | Comments

Save money by using student labor for your health and beauty (and car) needs

Josh Smith — 2008-04-07T14:30:00+00:00

Filed under: Bargains, College, Saving

My wife and I have an upcoming long weekend during which we are looking forward to relaxing and getting a massage. As always I was looking for ways to save money, which prompted me to check into our local massage therapy school.

As part of the schooling process to become a licensed massage therapist in Ohio and many other states students need to have a set number of hours giving massages to individuals. This requirement leads to a very nice price reduction if you are willing to have a student provided massage.

Our local school provides student massages for $25/hour compared to $50-70 at other local providers. In some regions, masseurs in training will offer free massages -- just to accumulate their needed hours! (In this case, your best course of action is to befriend a massage student! Then you can be their willing guinea pig.)
From my experience, the service is still top notch and an instructor may occasionally visit to assist and to ensure you are getting a quality massage. Finding a local massage therapy school is simple, using Google maps search for either massotherapy school or massage therapy school. If you can convince your kid to go to school to be a massage therapist you can reap even greater benefits including being on call for free massages at certain schools!

Massages aren't the only service you can tap cheap student labor for. Vocational schools are gold mines, if you happen to live near one. One of my favorite services to outsource to students is auto body repair and maintenance. Again the work is done under the supervision of an instructor, which means you don't have to worry too much.

Need more examples? Beauty schools often offer cheaper haircuts if you're willing to be worked on by a student. Schools of Dentistry often have free or cheap clinics that offer their students hands-on experience and you an affordable cleaning.

As with all of these options, demand outstrips student supply, and appointments are harder to come by. Call early and be patient as you head out to save some money.

Readers: What are your favorite student services?

Permalink | Email this | Linking Blogs | Comments

Picking a school based on the dating scene

Zac Bissonnette — 2008-04-05T18:00:00+00:00

Filed under: Sex Sells, College, Relationships

In a column (subscription required) for the Wall Street Journal, Donna Freitas, author of the upcoming book Sex and the Soul: Juggling Sexuality, Spirituality, Romance & Religion on America's College Campuses, advises parents of college-bound youth to "find out about the dating lives and party habits of students at your child's dream school, or whether hooking up has replaced dating altogether. As students told me time and time again, romantic relationships -- the good, the bad and the ugly -- can make or break the college experience. Before you mail that check, do your research."

I agree completely -- the dating/relationship scene at a college is vitally important to the college experience, but it's often overlooked. College guidance counselors might ask whether you want city/rural and discuss the options for majors at different schools, but I think that very few delve into the dating scene at prospective colleges.

To get some color on dating issues at colleges, check out The Insider's Guide to the Colleges, 2008: Students on Campus Tell You What You Really Want to Know. This book is great -- it features quotes from current college students describing what student life is actually like.

If you're looking at colleges for a student who is LGBT, you should absolutely order a copy of The Advocate College Guide For LGBT Students.

Read | Permalink | Email this | Linking Blogs | Comments

Good idea: Paying kids to save for college

Zac Bissonnette — 2008-03-30T18:00:00+00:00

Filed under: College

When I was applying for college/going through the financial aid process, i ran into a major injustice: the FAFSA formula essentially penalized me for saving dutifully as I spent my summers working, deducting my personal savings from the amount of financial aid I could receive.

I was livid: I had worked hard and scrimped on entertainment/clothing/car expenses, and it was all for nil. I would have been better off not working and spending my summers playing Playstation, and that's wrong.

So I was delighted when I saw an article in today's Springfield Republican about a program offered by the Springfield Partners for Community Action. Lower-income students who work there, save $1 thousand, and complete an eight hour course on money management are eligible to receive an additional $2 thousand in grant money for college.

This is a brilliant program, and it's amazing that nothing like this is done on a large scale. Rather than penalizing ambitious students who save, we should be rewarding them like Springfield Partners does.

One idea: every high school student should be able to save $4 thousand toward college. Those who fail to do that should receive reduced financial aid, as they have not made the commitment they are requesting of others. Students who work hard and save should not have to subsidize couch potatoes.

Permalink | Email this | Linking Blogs | Comments

Graduation Expenses: Diploma Frames?

Beth Wechsler — 2008-03-30T15:00:00+00:00

Filed under: College

With college graduation just around the corner, at least one school's Student Government Association is sending out "IMPORTANT ADVICE FROM PARENTS OF PREVIOUS STUDENTS."

This important advice is to order a diploma frame ahead of graduation.

Just when I thought I had everything under control - the motel reservation, the graduation trip to Arizona, and weekly reminders to my son to buy a sports jacket for job interviews... - it is brought to my attention that I have overlooked this important detail. Now I only have until May 9th to call the 800 number and check on availability. If I blow the deadline the frame might not be ready for graduation day.

It seems that our state school has an, "officially endorsed diploma frame," which will allow my son's diploma and his 8"x10" photo to slip right through the back of the frame, without tools or hassles. Best of all, at no time will I or my graduate need to "surrender the diploma or wait for it to be framed."

I'll actually ask my son - since a family friend asked just yesterday what he might like as a graduation gift. I'd be really surprised if he chooses the frame. On the other hand, I think this is a fundraiser for the student government and it would be a nice parting gift to the school. Why not just so?

Permalink | Email this | Linking Blogs | Comments

College credit card deals draw fire -- What's the solution?

Zac Bissonnette — 2008-03-18T11:30:00+00:00

Filed under: College, Cards, Debt, Kids and Money

Cozy relationships between big banks and universities are drawing the scrutiny of students, parents, and regulators, with New York Attorney General Andrew Cuomo investigating the matter. Hundreds of students at Portland State University protested the school's promotion of a bank account that was less attractive than those offered by competing institutions who weren't providing the school with cash.

I certainly agree with the students. The notion that schools are promoting financial products that aren't in the best interests of their students is despicable. But given the severe budget problems facing so many states, this is not something that's likely to change anytime soon.

The solution is education: As Beth Wechsler recently wrote on WalletPop, less than 20% of states currently have a personal finance education requirement. What this means is that, for many kids, the first bit of financial "advice" they receive is a shiny credit card offer -- bearing the logo of their new college.

If high schools focused on giving kids the firepower they need to fend off aggressive -- and often predatory -- financial services marketing, the effect of this marketing would be severely weakened. High school kids should be told about fees, compound interesting, FICO scores, investing, etc. They could also be shown videos featuring interviews with parents whose children committed suicide because of anxiety over credit card debt.

Read | Permalink | Email this | Linking Blogs | Comments