J)(o)&AKi on investments
magazine of the daily nebraskan monday, february 16, 1981
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Investments may be chance but inflation sure bet
Investments. Americans are desperately pour
ing their money into a variety of schemes in order
to hedge inflation.
A Gallup poll released last December found
that one out of every five Americans invests in
the stock market. Others turn to more traditional
investments including land, houses and gold but
inflation has cut into these too.
As student rush to gold buyers with old high
school class rings, they find the gold market
paying only a fraction of what they paid for the
ring because although investments can earn
money for you, they can also lose and each
investment has a catch.
The farmer who once could pay for his land by
retirement has trouble today if he relies only on
income from farming and he finds it almost
impossible to pass the same land on to his sons.
High land prices make houses an attractive
investment but hard to get started in.
The stock market, long held as the get-rich-quick
arena of America, seems to be controlled
more by chance and luck than with monetary
skill.
But in the end, investments - both traditional
and non-traditional - remain one of the best
weapons against inflation. It may be risky and a
matter of chance, but inflation is a sure thing.
Mary Kempkes
Students make bucks by investing college loans
By Pat Clark
Prospective college students are often
told that four years at the college of their
choice can prepare them for well-paying
careers and allow them to make lifelong
friendships. Seldom if ever are they told
that it can also be financially rewarding.
The trick is to acquire a Basic Educa
tional Opportunity Grant, National Direct
Student Loan, Guaranteed Student Loan
or other financial aid and invest it.
One student, who asked not to be ident
ified, expects to clear about $750 by
investing money she acquired through the
Guaranteed Student Loan Program.
"What I do with mine (loan) is put it in
a time certificate for 30 months at 12 or
13 percent interest," said the student.
The Guaranteed Student Loan Program
allows a student to borrow up to $2,500
annually directly from a bank, credit
union, or savings and loan at 9 percent in
terest. The student does not have to begin
repaying the loan until six months after
graduation.
Another student, who has applied for
but has not yet received a Guaranteed Stu
dent Loan, indicated that he would invest
the money if and when he got it.
"I plan to invest in a money market or
time certificate at the highest possible
interest," he said. The student said that it
was his first student loan.
"I've never needed one (a loan)," the
student said. "But some of my acquaint
ances have them and it seems too good of
an investment to pass up."
While investing financial aid may seem a
simple and effective money-making plan, it
has a major drawback in that it is as illegal
as it is profitable.
Don Aripoli, financial aid director at
UNL, said that he was unsure exactly what
the penalty for using financial aid money
for purposes other than education would
be. He noted that the Financial Aid Form,
which financial aid applicants must fill out
to determine their eligibility for the BEOG
and NDSL programs, includes a warning
that "false statements or misrepresenta
tions" on the form are punishable by fine
of up to $10,000 or imprisonment or both.
"Fraudulent information and abuse of
the program (misuse of aid money) might
be construed as the same," said Aripoli, in
dicating that they might carry similar
penalties.
Although use of financial aid money for
purposes other than education is illegal,
students who do so don't seem to feel they
are doing anything wrong.
"I don't feel guilty about it," said one
student, "because I will need it. Instead of
college, I will use it for the period after
college when I'm looking for a job."
Another student said he felt that the
risk of getting caught is slight.
"I don't think there's any way to find
out," the student said. "You have to be in
school but the check is written out to you.
"All they did was have all of the (GSL)
loan checks at the student union one day
and you go and get them."
Aripoli said that his office does not
regularly investigate how students use their
financial aid money.
"There would have to be a formal
complaint," Airpoli said. He said that on
instance of financial aid money abuse has
ever been brought to his attention.
Aripoli indicated that with the funding
cuts in the various financial aid programs
proposed by President Ronald Reagan's
administration, abuse of the financial aid
program could make less money available
for those who really need it.
"With all of the cost-consciousness, we
might be killing the goose that lays the
golden egg," he said.
