Lily's List Blog

Happy New Year!

Some big changes are in the works for  LILY’S LIST in 2012…we’ll keep you posted!

You can make the holidays happy when you support a student with a gift that makes a difference.  Please consider Lily’s List when giving this holiday season.  Happy Holidays!

OK, when you’re done nailing your graduation diploma up on your wall…open up the new Fundraising Tool Box on our home page. You’ll find tools and templates that can help Lily’s List work for you. If you need inspiration, check out these successful members’ profile pages.
http://lilyslist.com/members/durgabrandon/
http://lilyslist.com/members/kimiaandterence/
http://lilyslist.com/members/cmarx/

 

 

http://www.cbsnews.com/stories/2011/04/18/earlyshow/living/money/main20054853.shtml

Jarvis suggests that students start paying off their loans while they are still in college.

My Grandpa was a man who was born on the farm in the house that his father had built with his own two hands as a homesteader. Grandpa never lived anywhere else in his entire life. The furthest he ever strayed from his front door was to drive to Chicago a couple of times. He didn’t go beyond the 8th grade. From the day he was born, he farmed the same small piece of soil day in and day out. Grandpa’s destiny was handed down to him from his father… with little option but to follow. Perhaps that is why he saved every penny he could to put his three boys (one son being my dad) into Burlington Jr. College…a great sacrifice for a simple man in the hope that his sons would have educations that would open up doors and give them the opportunity to make their own decisions going through life. My grandfather is a man who put aside his own dreams so that my dad could find his.

Here’s to the people in our lives that make a difference and to the sacrifices they make; the grandparents, teachers, family, business owners, and friends. These are the people that help us walk forward with a lighter step when student loan debt can be a heavy burden to carry.

- Beverly

New York Times/The Opinion Pages
August 26, 2011
Since the start of the recession, record numbers of Americans have enrolled in college in search of new skills that would improve their employment prospects. Unfortunately, far too many students enrolled in expensive for-profit schools end up dogged by ruinous debts, with little in the way of skills or credentials to show for their efforts.

The schools sometimes push these students into high-cost private loans that they can never hope to repay, even when they are eligible for affordable federal loans. Because the private loans have fewer consumer accommodations like hardship deferments, the borrowers often have little choice but to default.

Worse yet, these loans and the bad credit history follow the debtors for the rest of their lives. Even filing for bankruptcy doesn’t clean the slate.

Legislation is pending in both houses of Congress that would make private school loans dischargeable through bankruptcy, as most of them were before Congress changed the law in 2005. It had long been the case that federally backed student loans were protected during bankruptcy proceedings. That is reasonable, since those loans were backed by taxpayer dollars and flexibly structured so that borrowers could receive deferment in tough times and resume payments when their finances improved.

The country has a compelling interest in making it as difficult as possible for student borrowers to elude payment for federal loans. There was no reason for extending that protection to private lenders of student loans.

For starters, that gives these lenders, who often turn a huge profit, an undeserved advantage over credit card issuers, gambling casinos and other issuers of unsecured credit whose debts are still subject to discharge in bankruptcy. The change also encouraged reckless underwriting by lenders, who no longer felt compelled to determine the borrower’s ability to pay. And it led to financial catastrophe for students who were duped into signing up for pricey private loans.

Bills sponsored by Senator Dick Durbin, Democrat of Illinois, and Representative Steve Cohen, Democrat of Tennessee, would eliminate the unfair protections for private student lenders and give struggling borrowers a chance at a fresh start.

Lily’s List was recently featured in an online article in the AARP Bulletin:

How friends and family can help whittle down a student loan

by: Blair S. Walker | from: AARP Bulletin | February 16, 2011

Many college students face their most arduous test after graduation, when it’s time to address student loan debt of tens, and sometimes hundreds, of thousands of dollars.   Fortunately, there are things that savvy friends and family members can do to help newly minted grads in an era where student loan debt has surpassed credit card debt for the first time, according to financial aid expert Mark Kantrowitz.

The smartest strategy is to focus on loans with the highest interest rates, not the largest outstanding balance, says Kantrowitz, publisher of financial aid websites Fastweb.com and Finaid.org.

Anyone helping a student whittle down an educational loan should “wait until after the student graduates, because you don’t want to reduce eligibility for need-based financial aid,” says Kantrowitz, who’s heard of medical students owing as much as half a million dollars.

In August, a national study conducted by the student loan giant Sallie Mae and polling firm Gallup indicated that 14 percent of college costs are supported by student borrowing. The largest percentage of the expenses, 37 percent, comes from parent income and savings, with parent borrowing accounting for an additional 10 percent.

But friends and relatives, the study found, foot a full 7 percent of the bill (the rest comes from scholarships and the students’ own income and savings).

People pitching in to retire student loan debt need to be mindful of an IRS gift threshold, Maryland CPA Gary Stacharowski cautions: “As long as they stay within the $13,000 per individual per year gift rule, taxes aren’t a problem.” If the gift is higher than that, the recipient may be liable for income taxes.

Volunteer-minded individuals can take advantage of programs such as the Edward M. Kennedy Serve America Act, which gives $1,000 educational awards to people 55 or older who perform at least 350 volunteer hours annually, Kantrowitz says. The award can be transferred to a child, foster child or grandchild.

Many people, however, may want a simpler method. To that end, some creative solutions have emerged in recent years.

Lily’s List

Illinois mom Jennifer Taylor was shocked to discover that her daughter Lily, a sophomore at the University of Iowa, could face as much as $20,000 in student loan debt after graduation.

“When I showed her the numbers she could be responsible for, she was horrified” too, says Taylor, 54. Necessity again proved to be the mother of invention, and Lily’s List was born.

It’s a website designed to make it easy for loan-reducing donations to flow. An indebted student or graduate registers at Lilyslist.com, paying a $15 annual fee. Helpful friends and family members can then make donations at the site, which channels the money directly to the student’s loan account. Donors are charged a $2.75 transaction fee for each use.

Lily’s List sends students e-mail notices when gifts are made on their behalf, says Taylor, who’s working with three other mothers to hone and perfect the site. One of the advantages of the program, she says, is that the donor’s gift goes toward reducing a student’s debt, not to fund a purchase of an iPhone, latte or anything else.

“It’s a very heavy thing for these young people to be facing at a young age,” says one of Taylor’s associates, Beverly Gibson, 54, whose two children will be college-bound in a few years. Lily’s List interests Boston University business management major Severine Cukierman, 19, who estimates she’ll be facing $20,000 in student loan debt after graduation. “I definitely want to look at anything that will help reduce my load,” Cukierman says.

Upromise

Upromise.com wrings debt pay-down from everyday purchases such as groceries, gasoline and clothing. Owned by Sallie Mae, the site has more than 750 participating merchants that designate anywhere from 1 percent to 25 percent of the price of things you buy from them toward a student’s educational loans.

“Family and friends can participate on behalf of any beneficiary they choose,” Upromise spokeswoman Debby Hohler says. “Every time they book a flight, rent a car, go out to dinner, book a hotel, they can be getting money back that can be used to help pay for college.”

Upromise has 12 million members and has funneled roughly $600 million toward student debt since 2001, Hohler says.

Blair S. Walker is a Miami-based writer.

To combat the never-ending packing and spending sprees, personal finance magazine Kiplinger.com compiled a list of money-wasters college students are better off going without.