Filed under: College, Debt

One of the latest potential victims of the credit crunch to emerge has been the student loan market. Democratic Congressman Rep. Paul Kanjorski of Pennsylvania., chairman of the Home Financial Services subcommittee on capital markets, and 20 other members of his party sent a letter Friday to Treasury Secretary Henry Paulson and Education Secretary Margaret Spelling asking them to take steps to shore up the student loan market.

They wrote that “We urge you to work without delay … to address this problem before it significantly decreases access to higher education opportunities for students and their families.”

They may have a point, although Department of Education officials say that they haven’t yet seen a problem emerge. But before we start to talk about unspecified government solutions to students not being able to borrow enormous sums of money to pay for college, I think we need to look at more common-sense solutions. As the Dolans discussed in a recent video, community college for the first 2 years is a wonderful way to save a ton of money on college. More incentives that encourage kids to pursue this option — perhaps in exchange for superior terms on student loans after they transfer to a state university — could serve 2 purposes: eliminating the need for the government to pump money into student loans, and decreasing the size of the anchor that so many children graduate college with.

Too many kids feel like attending a private college for 4 years is a birthright and I worry that these well-meaning Congressman may be feeding into that illusion. We shouldn’t be speaking about ways to make it easier for people to borrow money for college; we should be talking about ways to make borrowing large sums of money for education unnecessary.

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Filed under: College, Debt

One of the latest potential victims of the credit crunch to emerge has been the student loan market. Democratic Congressman Rep. Paul Kanjorski of Pennsylvania., chairman of the Home Financial Services subcommittee on capital markets, and 20 other members of his party sent a letter Friday to Treasury Secretary Henry Paulson and Education Secretary Margaret Spelling asking them to take steps to shore up the student loan market.

They wrote that “We urge you to work without delay … to address this problem before it significantly decreases access to higher education opportunities for students and their families.”

They might have a point, even though Department of Education officials say that they haven’t yet seen a problem emerge. But before we begin to speak about unspecified government solutions to students not being able to borrow enormous sums of money to pay for college, I think we need to look at more common-sense solutions. As the Dolans discussed in a recent video, community college for the first 2 years is a wonderful way to save a ton of money on college. More incentives that encourage children to pursue this option — perhaps in exchange for superior terms on student loans after they transfer to a say university — could serve 2 purposes: eliminating the need for the government to pump money into student loans, and decreasing the size of the anchor that so many kids graduate college with.

Too many kids feel like attending a private college for 4 years is a birthright and I worry that these well-meaning Congressman might be feeding into that illusion. We shouldn’t be talking about ways to make it easier for people to borrow money for college; we should be speaking about ways to make borrowing massive sums of money for education unnecessary.

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Filed under: Borrowing, College, Debt, Retire, Recession

I’m likely a few years off from grandparenthood, but I can’t stop fretting over the downturn’s lasting impact on college financing. One primary financing vehicle (piggybank, if you will) — home equity loans and lines of credit — ain’t what they were mere months ago, as falling home values and rising rates braid a tight, Gordian knot.

There’s more to it than money. For me, it’s about legacy, too: the mark we leave behind on those we love, those we know and even on the larger world out there. You start to ponder legacy more when you leave work, and consider what’s next.

Grandparents are increasingly helping out with college financing. If tighter credit or other factors makes that harder to do, there may well be a perceived “legacy effect” — a feeling that if I’m less able to help, I’ve somehow failed those I’m leaving behind.

One way to fight this feeling is getting in front of it, and doing whatever you can despite forces out of your control. I like the idea of instilling good saving behavior in young kids — whether that’s our kids, or our grandkids. There are lifelong benefits that go far beyond education financing.

Financial guru Bambi Holzer wrote a great piece about this for grandparents.com. At around age five, she states, kids begin to understand how money works, making it a good time to begin teaching them about saving. They’ll start to catch on when, for example, they see how one week’s allowance may not cover the cost of a coveted toy.

While it can be tough, not opening your wallet each time your grandchild states “I want that!” instructs a similar lesson. Let them discover, as you likely did growing up, that saving for what they want is not only fiscally responsible, but psychologically gratifying.

Holzer says that kids who are aware of the high cost of college and who assume some responsibility for paying for it (if even the smallest portion), will assign more value to their education and get more out of it. Makes great sense to me.

Michael Burnham is CEO of My Next Phase, a consulting firm offering non-financial retirement planning products and services (www.mynextphase.com).

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Filed under: Internet, Web services, Yahoo!, Social Software, web 2.0

While Yahoo! fields merger/hostile takeover offers, the company’s development team continues to push out new services. Today Yahoo! launched a retooled version of its video site. And Valleywag is reporting that the company will be launching a brand spanking new service on February 26th: A news and entertainment page featuring popular stories from around the internet.

Yahoo! Buzz as it will reportedly be known will be something of a cross between Digg and Google Trends. Top stories will be chosen through a combination of user votes and popular search results.

But Digg has one thing that Yahoo! Buzz won’t. At least not immediately. And that’s a list of links from an unlimited number of web pages. Yahoo! Buzz will only feature links to about 100 web publishers at first. Eventually the company will reportedly open Buzz up to the Yahoo! Publisher Network, which means that anyone who sells Yahoo! ads on their site could be featured on Yahoo! Buzz.

While that might sound like a good reason for people to sign up for the publisher network, as incentive to get more social networking traffic, it also means that Yahoo! Buzz is by definition going to be more limited than Digg, StumbleUpon, or other social news and bookmarking sites. But this is all rumor and speculation at this point. It’s possible Yahoo! Buzz won’t be as limited as Valleywag advocates. Or maybe it’s not even real.

If you go to buzz.yahoo.com this day you’ll find a page with top search results trends. But if Valleywag is correct, that site will be the future home of Yahoo! Buzz.

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