Women's Institute For A Secure Retirement

As a college senior, Laura Myers is well-versed in taking care of business. A student at the George Washington University in Washington, D.C., she has juggled the roles of student, athlete and intern with the characteristic deftness of the modern day overachiever. Unfortunately for Myers, this year’s mid-semester crunch brought more than exams and early morning swim practices; in October she received notice from the Office of Financial Aid that the lender for her Stafford loan was no longer offering government-insured loans.

“It was a bad surprise that totally threw off all of my finances. I had to take out a loan to pay my rent for the month,” Myers said.

Myers is not the only student who was forced, mid-semester, to re-apply for a federally guaranteed student loan from a different lender. According to Jane Bryant Quinn of the Washington Post, approximately 70 private and nonprofit lenders have ceased to offer government-insured loans. Unable to acquire the funds to lucratively sustain these programs in the wake of the economic crisis, these lenders have begun to pull out of the educational-loan industry.

Typically, education loans are securitized following dispersion. The loans can then be invested by stockholders with the intent of accruing the interest, according to Finance professor Ehud Ronn of the University of Texas at Austin. Because of the current financial atmosphere, such investments have tapered off drastically. This causes the loans to dry up, so to speak. Fortunately, measures are being taken by the government to assuage current circumstances. In early November, the U.S. Department of Education announced that it will purchase $6.5 billion in “federally guaranteed student loans from the 2007-08 year to ensure loans remain available to students in the future.” This plan aims to buy upwards of $500 million in loans weekly until February 2009.

If you intend to borrow money through the private, FFEL market, be warned that you will be faced with increased restrictions and less than liberal lending practices. According to Quinn, those most susceptible to this new level of conservative lending are students with low credit scores (less than 650 out of 800), new borrowers and those who have parents with “adverse credit histories.”

If you are worried about your prospects for attaining a Stafford or PLUS loan through FFEL, contact your university’s aid office for assistance. They can offer you information on the lenders that are still in the market in addition to such alternatives as the Direct Loan Program, a program that allows parents and students to receive loans directly from the Department of Education instead of having to go through the banks.

In the wake of the current economic recession, employment prospects seem mediocre at best. Recent large-scale layoffs seem to be unfavorable indicators of employment for recent and future college graduates. While the current economic atmosphere can certainly be disheartening, there are jobs out there. If you’re in the market for a new position, you may want to consider alternative career routes that can offer lucrative and fulfilling roles.

In recent years, the term social entrepreneurship has been used to describe ventures that “generate some of their own revenues and use business techniques to address social goals.” Essentially, such projects are non-profits that apply smart business practices in order to achieve the highest level of social impact.

Drew Chafetz, a University of Colorado graduate, is an example of a young social entrepreneur. Chafetz created his own nonprofit organization called love.futbol at the age of 25. Love.futbol aims to bring soccer fields to impoverished communities where recreational space is scarce. To date, this organization has built three fields in Guatemala.

Projects such as the one established by Chafetz are not trifling affairs. According to the Washington Post, over 30 business schools have established social entrepreneurship programs. Pamela Hartigan, author of “The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World,” believes a certain business sense allows those like Chafetz to achieve more with respect to their social endeavors. “Young people today…believe that change is going to be brought about by business and market discipline,” says Hartigan.

Even those who are typically viewed as stakeholders in the profit-driven business world are singing the merits of social entrepreneurship. Bill Gates, co-founder of Microsoft, is a proponent of nonprofits that practice business strategies. According to Gates, “creative capitalism” can result in increased social impact. If you’re entering the workforce and have an interest in social issues, you may want to consider researching social entrepreneurship. Amidst the current atmosphere of shrinking job opportunities, the social enterprise realm continues to flourish.

The conclusion of Thanksgiving last week, as always, was marked by a barrage of holiday themed commercials, signifying via your television set that it officially ‘tis the season to be jolly. If you’re a college student eagerly awaiting the end of Fall classes and the opportunity to sloth it for a whole month, the term “the most wonderful time of the year” never rang truer. However, take care not to lose sight of all of your responsibilities. January 1 marks the beginning of the “college-aid season,” and with it comes the ubiquitous FAFSA (Free Application For Student Aid). If you are looking to receive any type of aid, it is important that you file as soon as possible.

No one wants to spend the first day of the New Year filling out 6 pages worth of financial information. In fact, Congress passed legislation in August that aims to drastically minimize the currently daunting FAFSA form by 4 pages. Unfortunately for current college students, you are going to have to stick it out for one more year as this two-page form will not be offered until 2010.

One of the best ways to make the task tolerable is to be prepared; before January 1, gather all of the documents you will need in order to fill out the FAFSA. These include:

1. Social Security Number,

2. Driver’s License (if you have one),

3. 2007 W-2 Forms,

4. You and Your Spouse’s (if applicable) 2007 Federal Income Tax Return (IRS 1040, 1040A, 1040 EX, Foreign Tax Return or Tax Return for Puerto Rico, Guam, American Samoa, the US Virgin Islands, the Federal States of Micronesia or Palau),

5. Parents’ 2007 Federal Tax Return (if dependent),

6. Current bank statements,

7. Current business and investment mortgage information, business and farm records, stock, bond and other investment records,

9) 2007 Untaxed income record (social security, Temporary Assistance for Needy Families [TANF]. Welfare, veterans benefits records), and

10) Alien registration or permanent resident card (if not a U.S. citizen)

Once you’ve gathered these materials, you can print out a “FAFSA on the Web Worksheet” from fafsa.ed.gov. Filling out this worksheet by hand preliminarily will allow you to simply transfer the information onto the online application when it becomes available. After you fill this worksheet out, you can sign the FAFSA electronically using a PIN (Personal Identification Number) or by mailing in the signature page of the document. Your aid eligibility will be made available immediately once you have submitted your application.

Depending on your Expected Family Contribution (calculated using the Federal Methodology), you may be eligible for Pell grants, student loans and college work-study programs under federal aid. Many schools and states also use the information from the FAFSA to calculate any aid they may award you. Thus, it is crucial that you fill out the form as early as possible. The deadline for filing is June 30th but make sure you check your state deadlines as some are earlier than the federal cut off date.

Getting a head start on the FAFSA process will allow you to avoid any procrastination-induced stress. Visit the FAFSA web site at www.fafsa.ed.gov to find out more information including whether or not you may be able to apply as an independent and other FAQ’s.