| Rules for student loans get tighter
Now the credit crisis is spilling over into college-student loans.
Sallie Mae, the nation's largest lender to college students, will no longer make private education loans to students who are higher credit risks, so-called subprime borrowers. Private student loans, which carry higher interest rates than federal loans, help bridge the gap between tuition costs and federal aid.
Sallie Mae's change will hurt for-profit education companies because they rely on students' access to private loans more than non-profit colleges and universities, student-loan experts said. On Tuesday, a number of education stocks, including Hoffman Estates-based Career Education Corp., experienced big sell-offs on fears that the schools could see a decline in enrollment.
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Valimo Touts Digital Signatures
Consumers use mobile signatures for digitally signing loan applications, online bank authentication, transaction confirmation, mBanking and cardless ATM usage. In addition to banks, 2 brokerages are using mobile signatures for confirming trades: Ak Yatirim, Finans Invest; 2 municipalities (Fatih, Sisli) and 3 e-government services (Customs, Ministry of Health, Ministry of Justice) use mobile signatures for user authentication and digital form signing. According to Dr. Deniz Tuncalp, Mobile Signature Unit Manager at Turkcell, the 'Mobilimza' mobile signature service has now clocked over 500.000 signature requests from Turkcell's subscriber base. Nationwide marketing campaigns feature full-page ads in magazines; and financial instutions advertise their mobile signature service in daily newspapers.
Bowdoin to replace all loans with grants
College graduation is often associated with freedom. But with tuition costs at an all-time high, Bowdoin graduates often find themselves shackled by student loan debt years after receiving their degrees. No more. The College announced last week that it will replace all its loans with permanent grants beginning in the fall in an attempt to ease the amount of money students owe when they graduate. "The student loan burden that we have imposed on studentsthat has grown over the last 10 yearsis at a level that makes it very difficult for students at the College while they're here," said President Barry Mills in an online video released with the announcement. "It makes it very difficult for them as they think about their career options for the future." Tuition and fees totaled $46,260 this yearalmost $20,000 more than they did a decade ago.
UAL debt move secures approval
United Airlines has won support from its lenders to amend its debt agreement, freeing the US carrier to pursue buybacks and other initiatives designed to revive its flagging share price. UAL, United's corporate parent, secured approval from investors in its $1.8bn term loan late Wednesday, a person familiar with the matter said. The agreement, which gives United the flexibility to devote $500m to “shareholder initiatives", came only after United offered to increase the amount it would repay on existing debt to $500m. Lenders had baulked last week at United's original proposal, which would have reduced the loan's outstanding debt by $350m. “We think the proposal we put forward meets the needs of lenders and all our stakeholders," said Jean Medina, a spokeswoman with Chicago-based United.
Easing The Bite Of 401(K) Contributions
WE ALL KNOW we should be contributing as much as we possibly can to our 401(k)s. There's really no excuse not to. No matter how well you do with your other investments, you're unlikely to beat the 401(k)s advantages of tax-deferred growth and a company match. The bottom line: Max out. So why don't we do it? Well, we've got tuition bills, car-loan payments, credit-card debt, medical bills, mortgages, etc., etc., etc. Fact is, most of us really don't want to see our paychecks shrink any further even if it's going to give us a more comfy retirement. That's why we developed this 401(k) contribution calculator. If you really crunch the numbers, the results may pleasantly surprise you. What most people don't realize is that increased contributions usually mean lower federal and state income taxes.
No spin needed on desperation for residency
A Bangladeshi student I saw recently attempted suicide after failing to pay his tuition fees. On closer questioning it turned out his parents had sold off almost all their land and taken out a sizeable loan from a moneylender at an extortionate rate. They were banking their future upon him completing his degree in Australia and gaining permanent residency. As if to underline the depths of his despair, he showed me a picture of him dressed up as Santa Claus to advertise a suburban car wash business. It was one of his three part-time jobs. His situation is hardly out of the ordinary. While there are overseas students from wealthy families and developed countries, the bulk are from households of moderate means, usually from Asia. As someone born in Bangladesh, but raised in Australia, I often feel like an unelected representative of the Third World.
ALL BUSINESS: Banks face more woes from rising delinquencies on second ...
Contrarian investors who think now is the time to start buying beaten-down banking stocks could be in for a shock if they don't carefully review those companies' distressed home-equity loan portfolios. Massive losses tied to subprime-mortgage investments knocked down bank earnings over the last year, spurring investors to flee those stocks. But that could be only the start: Rising delinquencies in home-equity loans and other second mortgages could keep the banks' results from improving anytime soon. In recent days, executives at Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. said missed loan payments were a factor in their quarterly earnings declines. Most said the problem would only get worse. Why? A so-far small, but growing, number of homeowners who used their homes like an ATM to fund their spending and investment bets are finding themselves in a financial pinch.
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