Thursday, September 27, 2007

Finding Scholarship Dollars

For those that have been successful finding scholarships (“free money”) to assist in funding their education, the overriding theme mentioned is persistence. When searching for scholarships, use all of the resources at your disposal: the Internet, family and friends, the library, your school/potential school, as well as basing your search on different “levels.” Your search should be done at the national, state and local level, as well as by school.

There are LOTS of FREE national scholarship search tools – no need to pay the $50+ that many agencies charge. FastWeb ( is one of the most popular (it is the largest, most frequently updated database) scholarship searches – other free search sites/tools are listed at:

Your State Department of Higher Education is a great place to start (State of Missouri = as is your State Loan Guarantee Agency (MOHELA in Missouri - There are likely others [depending on your State's educational resources], but these are two offices I’d suggest starting with to find money regardless of where you reside …

Numerous scholarship opportunities are available within the community in which you reside. Kiwanis, Elks, Church Groups, and Rotary Clubs are common examples.

The notion of conducting ‘levels of searches’ also holds true at Universities/Colleges. There will normally be school-wide options (i.e., In addition to applying at the University level, seek out money offered by your college and department of interest. For example, if you were interested in Personal Financial Planning (great idea!), talk to the PFP department about scholarship possibilities, I’d also look at scholarship opportunities within the College of Human Environmental Sciences [in that example]. I’d approach things similarly with any department/college I was applying to. Something else to consider is if you’re interested in a specific field of study. Many “special programs” (loan forgiveness, scholarships, etc.) are available for particular fields of study such as teaching, nursing, social work, etc.

- Start early!
- Pay close attention to deadlines
- Read [and follow] the directions closely

Look outside the box. Everyone knows about scholarships awarded on academic performance or financial need, but don't overlook scholarships offered by professional or trade organizations. Healthcare, engineering, education, computer science, and social work are all examples. The military offers scholarships if you’re willing to serve …

There are also plenty of “oddball” scholarships – awards for left-handed students; graduates of specific high schools. Heck, you and your prom date can enter the scholarship fray if you’re willing to wear outfits or accessories made out of duct tape to the prom! Don’t believe me? Check it out -

When searching for scholarships, be cautious, NUMEROUS scams abound.

(1) Guaranteed scholarship or your money back …
(2) This information isn’t available anywhere else …
(3) “You’re a finalist” but never entered the competition …
(4) I’ll need a card/bank information to hold the scholarship for you …
(5) A scholarship search service will do the work for you [hefty fee] …

Thursday, September 20, 2007

Payday Lending

Tuesday of this week, the Council of the District of Columbia voted to bring Washington DC payday lenders back under the 24% annual interest rate cap. 24% is a far cry from the 350% to 550% that consumers had been charged since an exemption granted to DC payday lenders in 1998 allowed them to ignore the usury cap. Reading the comments of the council members was rather telling: “It’s like an alien species let loose in our midst.” “They steal money; they steal futures with their practices.”

Payday lending is the practice of using a post-dated check or electronic account information as collateral for a short-term loan. The industry sells themselves as a “short term financial solution” … the research, however, suggests that the payday lending business model is designed to keep borrowers in debt, not to provide one-time assistance during a time of financial need.

Consider the following:

* 91% of payday loans are made to borrowers who use 5+ payday loans/year.
* 99% of payday loans go to repeat borrowers.
* The average payday borrower pays $800 to borrow $325.
* Average APR charged nationally – 680%.

These numbers support those found in Washington DC where the 60,000 residents using payday loans last year had over 700,000 transactions (an average of nearly 12 per borrower per year). That sounds more like a long-term problem than a short-term solution …

Congress recently passed legislation capping annual rates of 36% for loans to military families. While this is set to take effect on October 1st, there are many consumer advocates that are worried that predatory products will still be sold because of the narrow definitions that are established in the law. It is estimated that over ¼ of military households have been caught up in payday lending (NY Times). In many college towns, students are a primary target – be careful!
(Source – Center for Responsible Lending).


* Alternatives to Payday Loans
* Consumer Federation of America Resources
* Get Help
* Inside the Payday Lending Industry (video)
* What is the cost of a Payday Loan (calculator)
* What are your States Regulations

Thursday, September 13, 2007

Purchasing a Textbook?

If you haven’t had to shop for a college textbook for yourself or your college student recently, consider yourself lucky! The costs can be enormous [that’s not even delving into the issue of what you get back at the end of the semester during sell-back]. Do I have a choice??

Aside from attempting to check textbooks out from the library, I’ve met students that don’t buy books because they view the cost as greater than the benefit. I don’t know that I’d go that far in advocating saving money. I do know, however, that more and more online outlets are selling college textbooks (both new and used), often for significantly less. While I don’t make personal recommendations/ endorsements, I think it is definitely worth the look to understand what alternatives are available to you.

Buy it Used.
Campus Book Swap
Valore Books

Swap it.
I’ve also read of students that have used resources like Facebook, Craigslist, and MySpace to swap books with other students, sell books the bookstore won’t buy back, and find used book groups to chat with students to get personal insights. Websites like CollegeSwapShop focus specifically on linking students up that would like to swap books. Buying college textbooks will always be an expensive proposition, but perhaps there are options available to you that could lighten the pinch on your wallet a little.

Thursday, September 6, 2007

"Credit Piggybacking"

“Credit piggybacking” is a term that describes an authorized user ‘piggybacking’ off the strong credit of another (normally a parent or spouse). Lately, credit repair companies/scams have started selling this ‘privilege’ to individuals with poor or marginal credit, having them piggyback off an individual with good credit (the company would pay someone with good credit a fee per account to ‘rent’ their credit). When the individual is added as an authorized user, their credit history with that account is automatically updated – presto, an overnight improvement to one’s credit score. Obviously this practice has a lot of negative implications for lenders who largely base their loan criteria upon this score. Regulators haven’t stepped in because they say that technically it isn’t illegal. Credit card companies are reticent to change their policies to limit authorized users – too profitable for them. So Fair Isaac, the behemoth of the credit scoring industry (company that developed the FICO credit score), has decided to change their scoring formula to ignore references to authorized-user accounts. So even if companies continue to report the information to the credit bureaus, it won’t impact the bottom line (your credit score).

What You Need to Know:
- TIMELINE. No one [that’s talking] knows exactly how or when this change will occur. This month, the ‘new’ scoring formula will be introduced at one of the bureaus, followed by the other two during the next year. Even then, the benefit of the authorized user won’t likely diminish overnight, as not every lender will immediately switch to the latest FICO version.

- WON'T IMPACT JOINT ACCOUNTS. The change will only impact authorized users – joint account holders will continue to both be reported.

- REACH. While this doesn’t impact the majority of people, 41 million consumers are currently listed as authorized users on accounts - pretty dramatic. Obviously the greatest impact will be the 2 million who only have information as an authorized user in their credit file – typically young people (often college students), and spouses that don’t have credit in their own names.

- BOTTOM LINE. Although it may take time for lenders to adopt the new scoring model, authorized-user accounts are no longer a reliable way to boost someone’s credit score.

Related Resources:
· Credit Issues
· Credit Scoring
· Order your Free Credit Report