10 juin 2014 ~ 0 Commentaire

Student Loan Servicing: The Borrower’s Experience

Student Loan Servicing: The Borrower’s Experience federal_budget

In other words, the four largest student loan programs represent an $88 billion taxpayer-financed subsidy. [15] CBO explains the utility of using a fair-value accounting model to fully understand the cost of federal lending, noting that The government is exposed to market risk when the economy is weak because borrowers default on their debt obligations more frequently and recoveries from borrowers are lower. [16] Fair-value estimates take this market risk into account, and as a result, are a more accurate reflection of the cost of federal student loans. Congress should not expand federal student loans without requiring that fair-value accounting be used to calculate the cost of those loans. Any loan program should use a non-subsidizing interest rate, e.g., the rate at which the program breaks even; absent fair-value accounting, it is impossible to tell the extent to which the student loan programs are providing a subsidy to borrowers. Specifically, the Department of Education should be required to use fair-value accounting estimates calculated by CBO and adjust loan rates accordingly going forward, on an annual basis. This would help determine whether the loan programs are costing money for taxpayers, and where to set interest rates to ensure the programs break even. Decouple Federal Financing from Accreditation If federal policymakers want to drive down college costs and increase access to higher education for those historically underserved by the traditional four-year system, the single most important reform to consider is decoupling federal financing from accreditation. College costs are at an all-time high at a time when access to knowledge is cheaper than at any other point in human history. Online learning and competency-based options that favor knowledge and skill acquisition over seat time have laid the groundwork to significantly lower college costs and increase access for students. In order to harness the potential of new learning modes, policymakers must free higher education from the ossified accreditation system. Accreditation as it currently exists creates barriers to entry for innovative new start-ups to enter the higher education market, and it is a poor gauge of course quality and the skills students gain (or fail to gain) while attending college. What began as a voluntary system of accreditation in the 19th century became a de facto requirement in 1952 when federal financing and aid, which constitutes so much of colleges budgets, became tied to accreditation.
Puedes ver la version sin traducir en http://www.heritage.org/research/testimony/2014/06/student-loan-servicing-the-borrowers-experience

Warren: Student loans are a ‘one-two punch’ for women – UPI.com

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The company has lost a huge amount of marketshare and its billion dollar poly plant remains shut, as it is not economically viable. Improvement in technology has made this plant obsolete and the company has not been generating profits. The companys share were delisted from NYSE and the company sold equity stakes to Chinese state funds for a pittance, as it was desperate to raise cash to run operations. NoteSuntech(STP) has already become bankrupt, with most of its assets sold to Shunfeng. Bankruptcy in China remains a hazy process as state owned funds keep running even zombie companies to protect jobs. LDK Solar (NYSEARCA:TAN)was the largest solar wafer producer and had diversified into all parts of the supply chain. But increasing competition from the like of GCL Poly eroded its competitive position and its huge pile of debt made operations almost impossible.$64 millionof the loan will be used to resurrect the dead poly plant that LDK had built over the last 3-4 years. The plant never ran to even half of its capacity as price of poly went below $20/kg. LDK had no money to improve the equipment. I think it is a bad move on the part of the banks to pour more money into a company that has already defaulted on $3 billion of debt. The company should be sold off to other more capable companies, which can make use of the capital equipment.
Puedes ver la version sin traducir en http://www.wallstreetsectorselector.com/investment-articles/analyst-desk/2014/06/cdb-loan-ldk-solar-320-million/

Is Your Student Loan Servicer Ruining Your Credit? – Forbes

Funding-Fee-Change

These companies are also the ones that can help with different student loan repayment plans, as well as deferment and forbearance needs. Finally, they are also the ones that will try to collect on loans that havent been paid, including reporting borrowers to the credit bureaus and seeking wage garnishments. These companies are essentially the paperwork keepers for your student loan. How Student Loan Companies CanAccidentallyHurt Borrowers Credit Scores Its the last area that these companies can really impact student loan borrowers these are the companies that report borrowers to the credit bureaus and seek repayment on student loan debt. They can also cause tax nightmares for borrowers because of this. The problem lies in the fact that these companies transfer student loans back and forth amongst themselves all the time. Its not common for a borrower to have their loan transferred two or three times before they graduate. In my case, my student loan originally started with Sallie Mae, and then ended up with FedLoan. When my loan was transferred from Sallie Mae to FedLoan, I had to change all of my automatic payments that I had setup through Sallie Mae those didnt transfer. I also had to re-sign up for online statements so that I could continue to qualify for an interest rate reduction (a hassle, but worth the savings).
Puedes ver la version sin traducir en http://www.forbes.com/sites/robertfarrington/2014/06/03/is-your-student-loan-servicer-ruining-your-credit/

RLPC-Rosneft loan going ahead despite UK banks’ exit – bankers
| Reuters

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« It is a drag on our economy, » Warren said. « It’s harder for young people to buy homes, to start businesses, and to begin their economic lives. » Warren, flanked by fellow Democrats Barbara Mikulski of Maryland, who sponsored the equal pay legislation blocked by Republicans last month , Dianne Feinstein of California, Patty Murray of Washington, Debbie Stabenow of Michigan, Tammy Baldwin of Wisconsin, and Maisie Hirono of Hawaii, called the combination of soaring student loans and paycheck inequality a « one-two punch for women. » Although the number varies depending on how it is measured, most studies find women earn between 15 and 33 cents less than men when equally qualified to do the same work. The number for college-educated women, the senators said, is $0.82. « Young women are working hard to build an economic future for themselves, » she said. « Right now, they face an extra tax. » The Banking on Students Emergency Loan Refinancing Act would allow student borrowers to refinance their loans to 3.86 percent interest — the level matching the level set by Congress last year for new borrowers and would be paid for by enacting the so-called Buffett Rule that eliminates a tax loophole allowing millionaires to pay low tax rates. « Young women are hit by a double whammy by ever-increasingly high student debt, » Mikulski said. « They deserve a fair shot at higher education they can afford. » Research has showed that, despite the continued value of holding a college degree, the rising costs have weighed increasingly heavily on America’s young people. Rohit Chopra, the student loan ombudsman at the Consumer Financial Protection Bureau, testified before the Budget Committee Wednesday that multiple studies have found student debt has kept an entire generation from buying homes, starting businesses and saving for retirement. Richard Vedder, the director for the Center of College Affordability and Productivity, argued the problem was not mounting debt — at least not directly. Vedder, who was invited by the ranking member to testify, said the student loan programs have caused college tuitions to skyrocket beyond the pace of inflation as schools happily collect federal dollars to build expensive facilities and court donors.
Puedes ver la version sin traducir en http://www.upi.com/Top_News/US/2014/06/04/Female-senators-tie-college-loan-push-to-equal-pay/2071401890697/

CDB to Loan LDK Solar $320 Million

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Rosneft and London-based BP, via a specially created company, are trying to complete the financing which is backed by the Russian group’s future oil production. Rosneft, BP and Lloyds declined to comment while HSBC could not immediately be reached for comment. Lloyds is 25 percent-owned by the British government, which has repeatedly condemned Russia over its annexation of Crimea in March and accused it of involvement in a separatist rebellion in eastern Ukraine. Moscow denies the charges but Rosneft chief Igor Sechin has been hit by U.S. sanctions as part of a broader move to punish Russia for its seizure of Crimea from Ukraine. The loan was launched to banks in late November at $5 billion but progress has been slow and it was reduced to up to $2 billion in April. Bankers said the deal still has enough support from lenders to go ahead despite the loss of Lloyds, which walked away this week followed by HSBC. « All the other banks are still in the deal, I don’t think it will have any impact, we are surprised they were there in the first place, » a second banker said. In April Royal Bank of Scotland, which is 80 percent owned by the British government, also walked away from a $1 billion club loan for Russian petrochemicals company Sibur. Bankers are watching to see whether Deutsche Bank will continue to support the deal but said the lender was not under the same political pressure as British banks.
Puedes ver la version sin traducir en http://www.reuters.com/article/2014/06/05/idUSL6N0OM3HS20140605

Cov-lite Loan Controversy Fades To Whisper While Portfolio Managers Chase Yield – Forbes

English: The door to the walk-in vault in the ...

In 2006 and 2007, only 24.5 percent and 32.7% percent of cov-lite issuers were rated single-B or below, compared with 57% last year, said the DDJ report. Cov-lite loans also represented a much smaller percentage of the whole during the last cycle 7.4 percent of new issuance in 2006 and 25 percent in 2007, the report said. What few argue with is the fact that cov-lite contributes to the erosion of total returns since holders lose the ability to reprice a loan when its risk profile deteriorates. Those loans in turn trade poorly and create paper losses for mark-to-market portfolios. Despite potential pitfalls, avoiding cov-lite deals altogether doesnt make sense now, especially with no near-term default catalyst, sources said. The low default expectation is in part because so few covenants are out there to trip up borrowers, and also because hardly any corporate issuers have maturities over the next few years courtesy of the flood of refinancings over the last several years. For some, the takeaway is that if youre basing your decisions on covenants, rather than credit analysis, youre going to lose, one portfolio manager said. This post is brought to you by Debtwire, a Mergermarket company and the leading provider of real-time intelligence, analysis and data on distressed debt, leveraged finance and asset-backed markets. The team at Debtwire is comprised of financial journalists and credit analysts with considerable experience covering trading, law and investment banking. Our reach is global, with separate products covering North America, Europe, CEEMEA, Asia-Pacific, Latin America, ABS and Municipals. For more information regarding Debtwire visit www.debtwire.com .
Puedes ver la version sin traducir en http://www.forbes.com/sites/mergermarket/2014/06/03/cov-lite-loan-controversy-fades-to-whisper-while-portfolio-managers-chase-yield/

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