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Archive for January 15th, 2009

Economic Recovery? Expert Says Not Before 2010.

January 15th, 2009 by Matthew C. Keegan | 6 Comments | Filed in Money Management

Taking a look back at 2008, experts now realize that the country was in a recession the entire year, possibly kicking in as early as November 2007. Some experts believe that we’ll begin to see relief later this moneyyear, perhaps as soon as June. However, there is one person, Med Yones — President of the International Institute of Management (IIM) — who doesn’t expect that recovery will begin for another year.

News like this can be disheartening, but our country has gone through economic downturns in the past, some lasting several years. The problem today is that mostly all workers who are younger than 40 have no recollection of a recession this deep with baby boomers and retirees remembering the tough economic times of the 1970s to early 1980s.

For his part, Med Yones is saying that he first called the current recession back in January 2007, following President Bush’s state of the union address.  Yones published a paper — U.S. Economic Risks and Strategies for 2007-2017 Policy White Paper – IIM Working Papers — which outlined the problems facing the US economy two years ago that have led to today’s sharp downturn.

According to Med Yones, “We warned most of them about 2 years ago, yet no one was willing to listen until the markets took their first big hit in early 2007. Since that time, the policy paper was viewed more than 250,000 times by researchers, media analysts, and investors.

The 3 most common questions are:

(1) How did we get here?

(2) Why did our top experts miss it?

(3) When do you think the economy will recover?

The short answers are:

(1) Spending on credit without enough production to pay it back

(2) Groupthink mindset, and

(3) We’ll experience more volatility in 2009 on the way to the bottom of the correction cycle. A modest recovery will start in 2010/2011.

The more detailed answers can be found at: http://www.iim-edu.org/news/topexpertswhopredicteduseconomiccrisis.htm

Though Yones’ initial prediction may seem to have been ignored, he contends that several media sources did pick up on his earlier statement. He cites Reuters, Fox News, Financial Post Canada, Handelsblatt Germany, Le Point France, China Times, Malaysia Sun, and the New Zealand Herald among the media outlets who carried his story.

So what does this mean to the average consumer in layman’s terms? Answer: expect the worse. This year, we’re likely to hear some of the most amazing promises from elected officials, people who insist that they know when the economy will rebound.

However, given the current economic climate and the lack of clarity from politicians and economists, Yones’ newest prediction is certainly worth noting.

Adv. – If you’re shopping for an auto loan, you’ll want to compare offers and find the auto protection you need to ensure that your investment lasts for many years.

Source: International Institute of Management


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Filing the FAFSA Form for 2009: Part II

January 15th, 2009 by Krayton M Davis | No Comments | Filed in College Planning

Demonstration: How to File the FAFSA Form

Filing the FAFSA form is required for all students who anticipate to receive federal student aid. It is used by colleges to determine your financial aid eligibility for all federal student loans, grants and many non-federal college scholarships.

You can submit the FAFSA form anytime after January 01 for the year you plan to attend school. For 2009, your FAFSA form submission will cover aid requirements for the 2009-10 academic year (July 2009-June 2010). You should submit your FAFSA form as soon as possible. Colleges have submission deadlines including many state aid agencies.

We will review the paper worksheet for the FAFSA form. Use the paper form in this exercise as your worksheet. You can then use the worksheet once you are ready to file your FAFSA form electronically: download the paper FAFSA worksheet.

The application segregates the form using a color for parents: the section colored in purple is for the parent.

Let’s begin.

FAFSA FORM SECTION ONE: STUDENT INFORMATION

questions 1-13:

Questions 1-13 are self explanatory. It is asking for the student’s name, address, date of birth, social security number, telephone and email address.

TIP:
The FAFSA form notes that you can leave questions blank if they do not apply to you. That’s true. But we discourage it. Anything left blank can delay your processing especially if it’s a question that most other students can answer.

For example in question 11, it asks for the student’s driver license number. This question may not apply to some students. But to many other students, it does. So leaving this question blank could possibly delay your processing. If you don’t have a driver license number, enter your State ID number. If you don’t have a state ID number, you might want to get one.

Double check your answers. An incorrect entry, such as transposing your social security number, can kill your application. Make sure your entries are correct before electronically submitting the form.

Question 13 asks about your email address. The government (and the colleges that receive your FAFSA form) will use this email address to communicate with you. So make sure it is a correct, working address. Communication will be required to process your aid request quickly.

questions 14-15:

This group of questions asks about the student’s citizenship and residency status.

questions 16-15:

  • Question 16: applies to the student, not the parent, on the date of your FAFSA submission.
  • Question 17: if you are a single student, you can leave this question “blank”.
  • Question 18: this is the state where you legally reside. Do not put the state where you were born or where you will attend school, unless the school is in the state where you legally reside.
  • Question 20: if your parents haven’t moved since January 01, 2004, or if you are a legal resident of the state since that time, mark “yes”. If you moved into the state after January 01, 2004, enter the month and year you moved into the state or became a resident of the state where you currently reside.
  • Questions 22: male students age 18-25 must register with selective service in order to receive financial aid.
  • Question 23: answer this question truthfully. Note, the question asks whether you have been convicted for possession while you were receiving federal student aid. It is not asking about convictions prior to receiving financial aid.

questions 24-31:

  • Questions 24-25: this information is used by some colleges to award scholarships to applicants who may be the first in their family to get a college degree. Don’t leave it blank. Some colleges award scholarships to families with certain education backgrounds.
  • Questions 29-30: do not leave these questions blank. enter what degree and your enrollment status. If you don’t know at the moment, enter at least full time. Note that students enrolled less than half-time do not qualify for most federal student aid.
  • Question 31: federal work study is employment based work (both on- and off-campus) to help pay for tuition. Student loans include Perkins, Stafford and PLUS loans. Enter both work-study and student loans. This does not obligate you in any way.

SECTION 2: STUDENT DEPENDENCY STATUS

(questions 48-60)
These next few questions determine your dependency status. You must answer all questions.

  • If you answer "no" to all of the questions, your parents will need to complete the next section, SECTION 3.
  • If you answer "yes" to any of the questions, your parents do not need to file. The student can skip to SECTION 4. However, some health-care related colleges may require parental information even if you answer "yes" to any of these questions. Check your college for information.

SECTION 3: PARENTAL INFORMATION

Your parents will complete SECTION 3 if you answered "no" to all of the questions in SECTION 2.

(questions 48-60)
These questions ask about your parents’ marital status on the date you file your FAFSA form. If your parents are separated or divorced, you must determine who the primary parent for this form is.

Who is the Primary Parent: The primary parent is the parent you lived with more during the past 12 months. If you did not live with more than one over the other, the primary parent is the parent that provided more financial support during the past 12 months.

If the primary parent is remarried as of today, then the stepparent’s information must be provided as the other parent for financial aid.

If your parent is widowed or single, answer the questions about that parent. If your widowed parent is remarried as of today, your stepparent’s information must be entered as the other parent.

Grandparents, foster parents and legal guardians are not considered parents on this form unless they have legally adopted you.

Federal law provides that, under very limited special circumstances, you may submit the FAFSA with parental information. Review the information in SECTION 3 on what constitutes special circumstances.

(questions 83-84, 77-81, 85)

  • Question 83: check what tax return your parents will file or intent to file for 2008
  • Question 84: determine whether your parent’s were eligible to file File a 1040A or 1040Z. See the instructions on the worksheet.
  • Questions 77-81: check what benefits your parents received in 2007 or 2008 the include
    • supplemental security income
    • food stamps
    • free or reduced price school lunch
    • temporary assistance for needy families
    • special supplemental nutrition program for Women, Infants, and Children

      (see the comments on the worksheet for explanation of benefits received)

  • Question85: answer whether either of your parents is a dislocated worker as of the day you submit your FAFSA form.

This is a good stopping point. Your next step is to gather your parent’s tax and financial information (asset balance, cash, savings, and checking account information). Starting Monday, we will go over the financial information for both parent and student and offer tips on how best to answer that question.


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