Remedies to help underwater homeowners not enough, PUSH panel says

BY MAUDLYNE IHEJIRIKA Staff Reporter mihejirika@suntimes.com February 25, 2012 8:36PM

Updated: February 25, 2012 9:42PM
Only strident remedies — such as a national moratorium on foreclosures and offering financial aid to “underwater” homeowners — can help stem a crisis sending severe reverberations through poor and minority communities, members of an Operation PUSH panel said Saturday.
Those communities will have to demand action through voting power and protest, seeking redress through legislative and legal means, because the recent settlement between the nation’s largest lenders and 49 state attorneys general shows they can’t count on government solutions, said the Rev. Jesse Jackson and other members of the panel.
“In the 1960s, we fought against restrictive covenants, then redlining, then for the Community Reinvestment Act. We finally get a rise in black and brown home ownership. Now this,” said Jackson, pointing to research showing the largest segment of “underwater” homes — where the amount owed exceeds the value of the home — are found in poor and minority communities.
“Much of this is race-based driven exploitation,” Jackson said. “We must now fight to recover our lost assets stolen from us and not protected by the government. We must connect our votes with our remedy.”
About 11 million households nationally are underwater.
The government bailout of banks that was supposed to help many of those households stave off foreclosure “have not helped nearly as much as it needs to,” asserted Woodstock Institute Vice President Spencer Cowan.
Nor, Cowan said, will the landmark $25 billion settlement reached last month with five top mortgage lenders, which helps only 1 million households.
“The $25 billion settlement is only a small aspect and doesn’t address the myriad other problems that led us to this point,” he said. “Nor does it address the two largest holders of mortgages, Fannie Mae and Freddie Mac.”
Others noted the crisis has pushed more of the middle-class into poverty.
“The only investment most middle-class people have is their home. Now these same people have no credit. If they can’t get a loan, their kids can’t go to college. You have a whole generation of people moving from middle-class to poverty,” said the Rev. Janette Wilson, PUSH Education Director.
The panel advocated criminal action against lenders who participated in the predatory and deceptive lending practices, issuing loans destined to fail.
“Find the people who robo-signed these loans, and start going after them. The $25 billion settlement doesn’t rule out criminal investigation of the banks for some of these other problems,” said Cowan.
Research by his group found in the six-county Chicago metropolitan region, the average underwater homeowner owes $50,000 more than their home’s value.
The number of homes hit with foreclosures in the region rose 13.9 percent in January from December — to 13,750 homes, or one in every 276 homes.http://tourism9.com/    http://vkins.com/

The burden of student debt

At the height of the Occupy protests last fall, young people held signs announcing how much they owed in student loans. While the pundits were asking each other what, exactly, the protesters wanted, a big part of the answer was on those signs: Students are leaving colleges and universities with a staggering financial burden and bleak job prospects.
“When you get out of college at 21 with a 30-year loan, it’s soul crushing,” says Scot Ross, executive director of One Wisconsin Now, a progressive organization that is launching an advocacy campaign on the issue. Ross is on leave to serve as communications director for gubernatorial candidate Kathleen Falk.
The student loan landscape has shifted dramatically since the parents of current students and recent graduates left college. In 2006, the U.S. Education Department’s National Center for Education Statistics reported that most borrowers who finished college in the early 1990s were able to manage their student loan burden. Most paid the loans back in 10 years. Today, many students face 20 to 25 years of making payments. In the early ’90s, about half of students borrowed; in 2006, two-thirds had to borrow. And their loans are much bigger.
Federal and state policy and budgetary decisions in recent years have contributed to the student debt burden. Public funding for public universities has fallen steeply at the same time that tuition has skyrocketed. Congress slashed funding for Pell Grants that helped the most needy students and put provisions in place to protect private lenders.
Federally funded student loans are no longer available from Sallie Mae, and its private loans have much higher interest rates than do home or car loans.
Last year, students borrowed more than $100 billion dollars — a new record. The College Board, an advocacy group that works to ensure that every student has the opportunity to prepare for, enroll in and graduate from college, reports that students are borrowing twice as much as in 2001. The total amount owed on all outstanding student loans is expected to reach $1 trillion next year. A full-time undergraduate student borrowed an average of almost $5,000 in 2010, 63% more than a decade earlier after adjusting for inflation, according to the College Board.
These young debtors are not just those who opted to attend prestigious private universities. Tuition at public universities has soared as those institutions struggle to offset cuts in public funding. University of Wisconsin-Madison’s in-state tuition jumped from $5,866 in 2005 to $9,672 in 2011. The estimated total cost for a year at UW-Madison was $15,256 in 2005. Now it’s $25,421.
About half of 2010-2011 bachelor’s degree recipients at UW-Madison will have borrowed an average total of $24,493, says Susan Fischer, director of the office of Student Financial Aid. For those who go on to graduate school, the debts increase sharply. About three-quarters of law school graduates will have loans and owe an average $99,723. Almost 90% of medical school graduates will have borrowed, and their average debt will be $151,383.
To make matters worse, student loans differ from all other kinds of debt in two significant ways. They are excluded from bankruptcy protection, and it is not possible to refinance or restructure loans to take advantage of falling interest rates.
“It is easier to be a deadbeat dad than it is to lose your student loan debt,” Ross says of the lack of bankruptcy protection. “What does that say about us as a nation?”
People on disability who can’t afford to pay their student loans can even have their payments garnisheed, Ross notes. The only recourse, he adds, is “loan rehabilitation, which means you have to agree to make extended payments and take a new loan, with added fees. You end up with even more debt.”
Ross admits he has a dog in this fight. He borrowed about $30,000 in 11 different loans to pay for his bachelor’s and master’s degrees. He laughs, a little ruefully, when he admits that, at 42, he is in “year 12 of a 30-year student debt,” and says he’s fortunate to have a job and be able to keep up with the payments.
Ben Manski, founder of the Liberty Tree Foundation, is another advocate for reforms to the student loan system. He contends that the huge increases in student debt are the inevitable result of cuts to higher education in state budgets.
“Generation X was the first generation to experience the impact of debt and a restructured job market,” says Manski, 37, who was recently appointed campaign director for Green Party presidential candidate Jill Stein. “We are overemployed and overworked. We do not have job security. Retirement is not even a consideration. The Millennials have it even worse, because of high unemployment. When you have this kind of debt, you lose freedoms — the freedom to engage in public service, for example, or pursue the career you are most fitted for as opposed to one that will make ends meet.”
Despite the heart-stopping debt statistics, the UW’s Fisher thinks it’s still possible to get at least an undergraduate degree without going very deeply into debt.
“Sometimes, students accrue big debt because they change majors and take longer to graduate. Or they choose a private or out-of-state public school that the family really cannot afford. My advice to incoming students is to work while they are in school and live frugally. And get in and get out. If they do that, I think they can finish with a minimal amount of debt.”
But starting working life owing tens of thousands of dollars during a period of high unemployment has many students wondering how they will be able to afford to marry, have children or buy a house. Paying off even a relatively small loan in a sagging economy is proving very difficult for many people. Here are some of their stories.
‘You can’t live your life without worrying’
Christina Spector left UW-Madison with an undergraduate degree in elementary education and psychology (2002), a graduate degree in educational leadership and policy analysis (2008) and a law degree (also 2008).
“It was a conscious decision to go to UW-Madison for the in-state tuition. I had scholarships, a little help from my parents, and I always had jobs while I was in school,” she says. But it wasn’t enough.
“The first time I signed a promissory note, I had such a hard time of it. I cried for two days about entering that system, but I had no other choice.”
A school administration consultant for the State Department of Instruction, Spector will pay $550 a month for a total of 25 years before her loans are paid off. Her husband, who has a master’s degree and is employed by the American Federation of Teachers, makes student loan payments of $200 a month.
That $750 monthly expense means they must live very frugally.
“We are on a really strict budget,” she says. “We don’t make large purchases unless we absolutely have to. We bought much less house than we qualified for, and we drive an inexpensive car. We are thoughtful about little things like buying coffee. We take our lunch to work. We can’t travel, so we use our vacations to visit family.”
One place where the family does not cut corners is on daycare for their 2-year-old child.
“Daycare costs more than our mortgage, but that’s one thing you’re not going to scrimp on.”
The debt drives all the family’s decisions — having another child, making a career change, moving.
“It’s difficult sometimes, because you can’t live your life without worrying about it,” she says. “I am much less inclined to take any kind of risk because of it.”
Spector knows she could ease the financial burden by abandoning a job she loves in the public sector and joining a private law firm.
“I never went to law school wanting that. I always wanted to work in the public sector. I have friends from law school who have made that decision so they could pay off their loans. To me, it seems like selling your soul. I just couldn’t do it. That would be a true prison on top of the bondage of the loans.”
‘We have given up many things’
A Madison West high school graduate, Ben Manski has an undergraduate degree in sociology and a law degree from UW-Madison. His higher education left him with $70,000 in student loan debt. His wife, Sarah, also has debt for her student loans.
“I am paying about $500 a month. For both my wife and me, it’s about $800 a month. It’s a major part of our budget, almost as much as we pay for housing,” he says.
Although Manski could be earning big bucks in a private law firm, he has stayed true to his commitment to use his education to work for social change. Founder of the Liberty Tree Foundation, he ran for the state Legislature as a Green Party candidate in 2010. He also practices a little law and teaches sociology at Madison College.
“I had other choices I could have made,” Manski says. “I was offered a lobbying job for an insurance company when I was 22 years old that would have paid $80,000 a year. I turned it down.”
Manski and his wife have had to make difficult choices because of their student loans.
“It is very difficult to save, and we have given up many things. We are not in a position where we can help others financially. And, certainly, we are not having a family until we have the ability to afford kids,” he says. He and his wife recently started a new website, posipair.com, designed to put environmentally responsible businesses in touch with each other and with customers, in an effort to generate some independent income.
Manski, who comes from a family of teachers, has a passion for education and would like to teach full time.
“I think there’s no higher calling than teaching and no more important institution than education,” he says.
Sometimes, he says, his students ask him if their schooling is worth the money and if they will be able to get jobs when they finish. “I used to be able to say it is definitely worth it,” he says. “But now that question is more difficult to answer.”
‘We can’t take vacations’
When Kathy Wallace learned that her Kenosha employer, Powerbrace Corp., might be moving its operations to Mexico, she decided to follow her dream of becoming a math teacher.
With a bachelor’s degree in math already in her pocket she would need only to complete the requirements for a teaching license. She enrolled at Carthage College, where she took night classes for four years on top of working 40 hours processing accounts payable. In 2006, she had to quit her job to student teach. She landed a job as a substitute teacher at Bullen Middle School in Kenosha and continued to work toward a master’s degree through an online Walden University program. She completed the master’s degree 20 months later, and now has a full-time teaching position.
Dream achieved.
But Wallace’s career change left her with a total of $60,000 in student loans and the prospect of supporting her family of four on a teacher’s salary and the modest disability payments her husband receives. Her loan payments are $700 a month.
“I’ve been paying the first one [for the undergraduate degree] since 2007, and I still owe about $19,000 on that one. I finished the master’s program in August and owe $30,000 for that. It will probably take at least 12 years to pay it all off.” Wallace will be 54 years old by then.
She says her husband’s disability payments cover their mortgage, but the family has to get by on her income for everything else.
“We don’t go out to eat. We can’t take vacations. Our kids don’t get to do things the other kids get to do. It’s really hard knowing you can’t do things for your own kids.”
Those children, now 11 and 16 years old, both want to go to college.
“I’ve told them I’d chip in as much as I could. I’ve encouraged them to go for scholarships. The rest will have to be student loans,” Wallace says. “My kids seeing me get more education showed them this is what you need to do to survive. Without college, there’s not much out there for you.”
Wallace hopes she may be able to take advantage of a loan forgiveness option for her federal Stafford and Perkins loans after five years of teaching. She qualifies on two counts — she teaches mathematics and she teaches in a Title 1 school. But she worries that she might not make the five-year requirement.
“If I can get [those loans forgiven] it takes a lot of pressure off me. But we are facing layoffs again in our district.”
‘The interest is very high’
Tanya Oemig finished paying off her own student loans in her early 30s, but now, at 46, she faces paying back $15,000 she borrowed to send her children to college.
“They couldn’t borrow enough themselves,” she explains, adding that, as a single parent, she was unable to save for her children’s higher education.
Until recently, Oemig was a communicable disease surveillance specialist with the Wisconsin Division of Public Health. Her salary there was not enough to pay the bills after taking on the new debt, and she had to add a second job. She finally decided she was on overload and quit both jobs to work for a software development company at a higher salary.
“I loved the work at Public Health, but I just couldn’t afford to keep doing it. I was lucky to find a good place to work, and it pays enough that I’m able to make the payments on one salary now. There are people struggling a lot more than I am.”
Still, Oemig worries about her children’s prospects. Both still live with her. One graduated from Madison Media Institute in May with an associate degree and now works at a gas station while he looks for a job related to his skills and education. The other one is still at Madison College, working toward a two-year degree in information systems administration. He has a part-time help desk job, but his hours were cut recently.
“I worry about their job prospects all the time. Currently they don’t make enough to support themselves. They can make their loan payments, but they can’t pay for car insurance or cell phones. And I worry they won’t find a job before their education is obsolete. They are both very discouraged.”
Oemig thinks the time allowed before graduates have to start repaying student loans is unrealistic, given the dismal job market.
“Even if they had a job right out of school, they would have a lot of expenses getting started. They need more than six months so they can save enough to afford an apartment and maybe a car — to get their feet on the ground.”
And she wonders why interest on student loans is so high when loans for other purposes are cheap these days. One of her sons has a Sallie Mae loan with an interest rate of 10%.
“I had good credit so I could get federal loans, but those who don’t have to go to private loans where the interest is very high.”
‘Sometimes I wonder why I’m doing this’
There was never any question in Dustin Bradley’s family that the Beloit Memorial graduate would go on to college.
“My grandparents didn’t go to college, and my father [a third grade teacher in Wauwatosa] was the first and only one to get a degree. My family always encouraged me and expected me to get more education,” he says. However, he admits that he drifted during his first couple of years at UW-Madison, struggling with the math required for the business program where he first enrolled, and finally finding his academic passion in sociology.
“I did the victory lap,” he explains of his extra fifth year as an undergraduate. He will receive his bachelor’s degree in May.
But Bradley’s accumulation of student debt is not over. He plans to enroll in a paralegal certificate program next fall. It’s a high-demand skill, and he’s sure he’ll find work. Then, after a few years of gaining experience, he wants to enroll in law school.
So far, Bradley’s debt load is only about $12,500, lower than average, because his family was able to kick in for his first few years and because he worked an average of 32 hours a week while in school. But from here on out, he’s on his own.
He’s looking at paralegal programs at technical colleges in Madison and Milwaukee and at several online programs. The private web-based programs are convenient, especially for someone who has a job, he says, but they are more expensive. Programs at the tech schools cost about $4,000 for the one-year course. The costs for online courses that have accreditation range from $7,500 to more than $10,000. Bradley expects he will have to borrow that money on the far more expensive private student loan market, but hopes he can pay most it off before he starts law school.
That is where the really big debt will start to build. According to UW-Madison statistics, the average law school graduate in 2012 will owe almost $100,000. That number includes accumulated undergraduate debt, but law school alone leaves the average borrower some $80,000 in debt.
Still, Bradley is confident that incurring the debt will be a good investment. “I think I’ll be making enough to make [the payments] manageable. But it’s hard when I look at some of my friends who got jobs right out of high school at Chrysler or GM. They have high-paying jobs but don’t have this debt. So sometimes I wonder why I’m doing this.”
Cause for hope
Many college graduates face a sobering reality: turning 50 and still not being free of student loan payments. But there are efforts under way to ease the burden. The progressive organization One Wisconsin Now is launching an advocacy campaign that proposes the following for state residents:

• A “truth in lending” provision, similar to what’s required for a mortgage, so students understand when they take out a loan how much they will be paying back and for how long.
• Bankruptcy protection.
• The opportunity to refinance or consolidate student loans.
• Provisions for forgiving student debt.

One Wisconsin Now is also creating a website that will highlight national efforts at helping students with excessive debt. U.S. Sen. Dick Durbin, for example, has introduced legislation that would treat private student loans the same as other private debt under bankruptcy. President Obama favors linking student loan repayments to income; providing debt forgiveness after 20 years; and allowing greater flexibility on interest rates.
“This is an issue that is just starting to bubble up to the surface,” says One Wisconsin Now’s deputy director, Mike Browne. “We’re in relatively early days, legislatively.”

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Financial aid office provides guidance for students paying off loans

If a person had $20,000 to spend, they could buy about 5,000 Javalanches, a Mini Cooper or feed 220 children in Africa for a year.  If that person is a Northwest student, though, he or she would probably use it to pay off his or her loans.  The average student debt of a Northwest graduate is between $19,825 and $22,555.  The time to begin paying off loans is quickly approaching for seniors getting ready to graduate this spring.  
 “Our students have done a great job over the years (paying off loans),” Del Morley, director of financial assistance at Northwest, said.  “The government keeps track of what they call a cohort default rate (percentage of students who default on federal loans) and our cohort default rate is always under the federal average.”
About 70 percent of Northwest students, each year, take out loans.  Subsidized loans are need based and interest begins six months after graduation.  Interest on unsubsidized loans begins immediately and payments must begin six months after a student is no longer enrolled in school.  The Northwest Office of Financial Assistance provides students in need of loans with entrance and exit counseling and gives them tools to help with loan consolidations and payment plans. 
 “There are a lot of changes in the works coming up,” Morley said.  “We’re going to try to get them all made before July 1, 2012.”
With any loans made after July 1, interest will begin to accumulate on subsidized loans as soon as a student graduates, and subsidized loans will no longer be available for graduate students.  There is also a possibility that interest rates on student loans will increase.
“Unless (Congress) passes new legislation, it will be 6.8 percent next year,” Morley said.
Kearsten Smith, a senior who has taken out loans since her freshman year, said she is confident that her education at Northwest will help her find a job that will help to pay off her loans.  If that fails, her next plan is to find someone very rich to marry. 
“If you don’t have to take (loans) out, don’t, but at the same time, student loans are the best loans you can take out,” Smith said.  “If you’re going to go to college, don’t be deterred because you have to take out loans to do it because they have the lowest interest rates (and) the best payback policy. Literally, they are the best loans you could ever take out.”
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College Goal Sunday

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Updated: Sunday, 12 Feb 2012, 10:13 PM EST
Published : Sunday, 12 Feb 2012, 10:13 PM EST

Fort Wayne, Ind. (WANE) – The government gives out billions of dollars for students to go to college. That even includes student loans.
Dian Suarez and his mother came to College Goal Sunday. This program is to help families fill out their Free Application for Federal Student Aid form, or FAFSA form online. Suarez is a freshman at I.P.F.W. He found out he didn’t have to take out any loans.
“I got lucky and I was able to get enough to pay for what I needed,” he said.
Many students need and rely on student loans to pay for their education. Suarez said if he’s faced with taking out a loan, he hopes to have a job waiting on him before he graduates.
“I’ll have to make sure I have a job and be able to pay it back eventually,” Suarez said.
Martin Murphy with I.P.F.W. said in this economy, finding a job isn’t so easy, which makes it harder on graduates to pay back loans.
“They’re graduating here out of college and they’re looking six to 12 months looking for a job and see, those students loans start kicking in,” Murphy said.
That’s why he stresses students should use their loans responsibly, such as on tuition and room and board, instead on a new car or new furniture for an apartment.
Murphy said it usually takes graduates between 10 to 15 years to completely pay back their loans, that’s if there’s no stop in payment. Usually, if you can’t find a job within the six month grace period or don’t make enough money to pay back your student loans, for federal loans, you can postpone payment. Sometimes, without penalty.
The deadline for completing the FAFSA form is March 10th. The deadline to make any changes to your FAFSA is May 15th.

Interest rates for common student loan could double this summer

Break’s over.
For the last five years, Congress has cut students a break on the interest rate for unsubsidized student loans, the most popular kind used at Ball State. Starting in July, if the low rate of 3.4 percent isn’t reinstated, it could go back to 6.8 percent, which represents an average $2,000 increase over the course of paying back the loan.
In 2007, the College Cost Reduction and Access Act was passed, which reduced the rate to 3.4 percent for undergraduate students. It was meant to help make college more affordable during poor economic times. Now the plan is about to expire.
“They only had a five-year plan,” said John McPherson, director of Ball State’s Scholarships and Financial Aid. “And now the only way to keep the cost low is to come up with more money to pay for it.”
Rep. Joe Courtney (R-Calif.) recently introduced a bill to keep the rate at 3.4 percent, and President Barack Obama has said he wants to keep it for at least a year.
“A college education is key to success in today’s economy,” said Courtney in a press release on his website. “But for many students, the spiraling costs of higher education are creating an immense barrier.”
For the average student using a subsidized Stafford Loan, it could means about a $2,000 increase over 10 years, according to information from the National Association of Student Financial Aid Administrators.
“If you look at averages, obviously a college degree provides opportunities you can never get anywhere else,” McPherson said. “Over the life of a person, it’s not going to be huge.”
Sophomore Joseph Dimaggio uses loans and grants to pay for college, and since he decided to add a second major, he anticipates being in college an extra two and a half years. He said he’s afraid that he’ll have to spend several years paying back his loans before he can start to settle down.
“There are a lot of things I’d rather do with $2,000,” he said.
He said he wants to become an actuarial scientist, and he said it’s important to know what jobs are in demand.
“We hit such a low,” he said. “And I have a lot of friends that are older and overqualified for the job they have, especially in teaching.”
Last academic year, about 10,400 Ball State students used subsidized Stafford loans. Altogether, they borrowed $44 million.
Even if the interest rate is brought back to 6.8 percent, McPherson said this is the best deal for most students, especially if this is their first time taking out a loan. Private lenders might deny them, or give them a higher interest rate, McPherson said.
Perkins loans have a fixed 5 percent interest. But they are for extremely needy students, and not many people qualify, he said.
With a subsidized loan, the federal government absorbs the interest while a student is in college and six months afterward. If the CCRAA program is abolished, students would be responsible for the interest accumulated during the six months after they graduate.
With unsubsidized loans, students pay the interest that is built up during college and during the six-month grace period after graduation. The government uses a formula to determine a student’s need and how much money they will receive with each type of loan. The formula includes factors like income, family size, number of people already in college and the family’s assets.
Every year, two thirds of Ball State students borrow some kind of loan, McPherson said. In 2010-2011, undergrads were leaving college with an average debt of $24,121.
Rob Tyler, an adjunct professor of personal finance and the founder of Tyler Wealth Management, offered examples of how this would impact students. His estimate: not very much.
To repay the average student loan over 10 years with an interest rate of 3.4 percent, the monthly payment is about $237.59. At a rate of 6.8 percent, the monthly payment jumps to $277.79, an increase of just $40.20.
Tyler crunched a few numbers based on loan information from the Ball State Credit Union.
The interest rate for a loan from the credit union on a new car, for example, is 2.99 percent. In order to offset the extra $40.20 a student is paying back on student loans, and with the interest rate for a new car taken into consideration, they would need to buy a car that costs $2,237 less than what they had previously budgeted.
On a loan for a new house, Tyler used a 4.5 percent fixed interest rate on a 30-year mortgage for his example. In that case, to accommodate the extra $40.20 a month in student loans, he or she would want to buy a house that’s about $8,000 less than they budgeted — not a huge amount relative to a $200,000 home.
“You have to think, what’s my sacrifice?” Tyler said. “Your college education is going to last you a lifetime.”
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Public Safety

The mad dash to cobble together college funding will soon be under way.
In the weeks ahead, colleges will begin mailing out their much-anticipated acceptance letters and financial aid packages. The notices will alleviate pent up anxiety and finally give high school seniors a clearer idea of what their futures will hold.
But amid all the emotions, students and families will also need to start sorting out how they’ll pay for tuition. The average bill now comes in at more than $17,000 to attend an in-state public college.
The problem is that navigating the universe of financial aid can be confusing. That’s because there’s a vast patchwork of grants, scholarships and loans available. But a failure to compare the options and explore the alternatives could mean the difference in thousands of dollars in debt upon graduation.
Adding to that confusion is a spate of headlines in recent weeks regarding changes in financial aid. To help navigate this process, here’s a look at what’s behind the recent changes.
—
Comparing costs » As part of his broad plans to make higher education more affordable, President Barack Obama recently said he wants to make it easier for families to estimate the cost of college.
As it stands, there isn’t a uniform template for financial aid award letters, and officials say the forms can be difficult to decipher, even misleading. For example, schools usually provide a total “out of pocket” cost after subtracting aid such as grants and scholarships. But some schools also subtract loans from that figure, even though loans have to be repaid and actually push up costs because of interest charges.
In other cases, interest rates and other loan terms are not spelled out. Officials say this could lead to students taking on more debt than they realize.
To address the issue, the Department of Education and the newly created Consumer Financial Protection Bureau announced in October that they are developing a model financial aid form. There aren’t any plans yet to make the form mandatory. But once a template is finalized, Congress could vote to require colleges to use it to maintain access to federal aid. The adoption of such a form has also been widely supported by student advocates.
Separately, Obama is pushing for a “college scorecard” that would require schools to disclose their graduation rates, rate of employment and debt repayment among graduates.
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Interest rates » Taking out a student loan to attend college has become the norm, with two-thirds of graduates leaving campus in debt. But not all loans are alike. So it might have caught your attention last month when Obama said in his State of the Union address that the fixed interest rates on student loans are set to double in July if Congress fails to act.
Before you panic, keep in mind that there are primarily two types of federal student loans: subsidized and unsubsidized. The difference is that the government doesn’t start charging interest on subsidized loans until the student graduates. With unsubsidized loans, interest starts accruing right away.
The loans also come with different interest rates. Unsubsidized loans currently charge a fixed rate of 6.8 percent. The interest rate on subsidized loans was gradually lowered to its current fixed rate of 3.4 percent over the past few years. But the law that temporarily reduced the rate sunsets in July.
So unless Congress extends the reduction, the rate on subsidized loans will snap back to 6.8 percent.
Next Page »

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Federal plan to extend deferred fees to TAFE

Thousands of Canberra students wanting to study a vocational course may be thrown a financial lifeline as the Federal Government plans extending HECS-style loans to TAFE fees.
The Canberra Institute of Technology cautiously welcomed the announcement by Prime Minister Julia Gillard yesterday that the Commonwealth would negotiate a plan with the states and territories to end up-front fees for students enrolling in VET diplomas or advanced diplomas.
The reforms, however, will not be in place for students enrolling in TAFE this year.
CIT currently has one of the highest intakes of students at diploma and associate degree level across Australia’s 56 public TAFEs – with more than 6000 enrolments last year.
Ms Gillard announced negotiations would begin on allowing students VET students to waive upfront fees and instead defer repayments until they were earning a wage – in the same way HECS works for university students.
Current fee levels at the CIT range between $1020 for international business and $3130 for hospitality and are regulated by the ACT Government.
The Federal Government would also guarantee foundation and entry-level courses for technical and service sector careers in areas such as health, business, hospitality, communications, construction, transport and other areas through a government-subsidised training place worth up to $7800.
CIT director Adrian Marron said the announcements were positive but ”the devil will be in the detail”.
While Victoria has been trialling income contingent loans to VET students, Mr Marron said ”there are lessons to be learned from the Victorian experience in relation to the mechanics of implementing the system”.
The CIT was aware that fees acted as a financial barrier to education and training for many students and already offered concessions such as 50 per cent off fees for students with a Centrelink card.
Mr Marron said the wide variety of courses, course lengths, fee structures and existing concessions would all need to be taken into account when constructing and negotiating the new HECS-style loans.

ACT Education Minister Chris Bourke said he was happy to negotiate with the Commonwealth if the new measures went to improve local workforce productivity and participation.
”It is also worth noting that having federally funded HECS places aligns well with the University of Canberra-Institute of Technology joint venture,” he said, referring to the new institution to be set up by the UC and CIT to operate solely at diploma and associate degree level from 2013.
Mr Bourke said he looked forward to receiving more detail from the Commonwealth on how the scheme might work.
Ms Gillard said the reforms were aimed at tackling Australia’s skills shortage, recognised the increasing importance of higher level skills in Australian vocational education and take pressure off families struggling to make ends meet.
”By removing this cost barrier, students would have more choice about what and where they study, and would be free from the added burden of having to pay their training fees upfront,” she said.
She noted the Victorian trial had been popular, with 22,000 students opting to take up an income-contingent loan since 2009.
Ms Gillard said the package would not only open up a significant number of training opportunities for more Australians, but also improve job security and lift national productivity.
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AHEB Investment Group Reflects on a Successful Year for 2011

MANCHESTER, England, February 1, 2012 /PRNewswire/ –
AHEB Investment Group, the Belize-registered financial services consulting firm, has achieved another great year in 2011, despite the economic turmoil. The company announces 50% increase in its profits for 2011, whilst having laid the foundations for what promises to be an equally successful 2012 with the agreement of 20 client projects. The commitment, professionalism and high levels of expertise displayed by AHEB in the complex area of financing for large ventures and complex banking structures, is evident by the praise received from their clients.
The momentum gathered by AHEB Investment Group and their successful year continued right up to last weeks of December and is no doubt set to keep going into the start of 2012. During the last weeks of the year, meetings carried out with several major European banks and new investors set the pace for stage two of these exciting new developments, expected to take place in early 2012, with the next round of key negotiations. The success and achievements of these negotiations are by no small part down to AHEB’s expertise and professionalism in the field of large venture financing and complex banking structures, but also the clients themselves and the relationships and trust earned.
As AHEB Investment Group confirms its successful negotiation for 20 key projects at the end of 2011, it also announces that company profits have also increased by 50%.  Andreas Charalambous, Managing Director of AHEB Investment Group, comments: “It has been an excellent year for AHEB Investment Group and we are pleased to be involved in some very major projects, which have allowed us to demonstrate our level of expertise and professionalism. We are very pleased to have a selection of extremely professional clients to work with and this allows us to bring great results also.”
AHEB Investment Group’s clients and associates are also very pleased with their cooperation and have expressed their gratitude in the testimonials received by the company. William Sickert, Principal and Director of International Zip Line Corporation comments: “Our experience with AHEB Investment group has been of the utmost in integrity and communication with respect to opportunities and programs. Our confidence and partnership led to progressive meetings and program introductions in Europe in the month of November. AHEB investment Group has the tenacity and relationships necessary to provide excellent and realistic programs to assist in the growth of your company. They are now our exclusive partners in our business and I endorse their staff as professional and integral in our future business worldwide.”
Randall Hickman of NCARE comments not only on the work ethic but also the personal touch offered by AHEB: “AHEB Investment Group has led our Funding Group to success by showing strong competence, integrity, and a shared common goal in success. Their dedication to our project (National Center for Autism Research and Education) has been nothing short of stellar. In working with them in Europe to finalize our project they have been nothing short of amazing. Further, AHEB displayed a warmth and personal touch unmatched compared with most financial groups. AHEB Investment Group has been nothing short of the height of professionalism, courtesy, and competence in all of their actions. We would highly recommend them to any project group seeking to arrange financing. They have made our project a reality.”
With these collaborations growing from strength to strength, the results in gaining finance for clients, and the project management and consulting agreements made over the past year, AHEB Investment Group is primed for a consecutively promising 2012. Andreas Charalambous, Managing Director of AHEB Investment Group, reciprocates: “We would once again like to thank our partners, investors, clients and friends for their kind words and reaffirm our commitment towards them. It is due to these partnerships, where all parties work together for mutual benefit, that we have been able to enjoy such a successful year with record profits. We look forward to continuing existing ventures whilst exploring new ones with our partners and clients in the near future.”
About AHEB Investment Group
AHEB Investment Group was founded in 2008 aiming to provide professional support and consulting regarding financing to businesses of large and medium size but also start up enterprises. AHEB specializes in assisting the development of large commercial and industrial projects by offering financing solutions and advisory support. Successful projects include real estate developments, construction including large hotels, energy based projects covering power plants and oil rigs with other major purchases of ships and aircraft. AHEB’s relationships with principal global and regional banking institutions assist businesses in arrangement of collateral via its network of investment partners. For further information about AHEB Investment Group, visit http://www.ahebgroup.com , email info@ahebgroup.com or call +1-347-4166069.
To read further customer testimonials from AHEB Investment Group clients visit: http://www.ahebgroup.com/dotnetnuke/CustomerTestimonials/tabid/201/Default.aspx
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Will President Obama's Blueprint Cut College Costs?

Mark Kantrowitz is the founder of the Web sites finaid.org, and fastweb.com. He regularly answers reader questions on The Choice. Readers can post comments of their own at the end of this essay.
In his State of the Union address, President Obama announced several proposals to make college more affordable. These included doubling the number of federal work-study program jobs over five years, a one-year extension of low interest rates on certain federal student loans and a permanent extension of the American Opportunity Tax Credit. President Obama also “put colleges on notice,” telling the colleges that if they can’t stop tuition from going up, the financing they get from taxpayers each year will go down. The president also announced initiatives to help families make informed decisions concerning college costs and quality.
More money for college is better than none. As a nation, we must put a priority on increasing federal and state investment in higher education. Maintaining the status quo or making slight tweaks to student aid financing is not enough.
Yet a key concern is that increases in some student aid programs may come at the expense of cuts in other more effective student aid programs.
It is unclear how President Obama plans on paying for increases in student aid financing while Congress concentrates on cost-cutting. Congress cut $8 billion a year out of the Pell grant program last year by ending the year-round Pell grant program, which allowed students in accelerated degree programs to get two Pell grants in a single year. Congress reduced the income threshold at which a student qualifies for a full Pell grant from $32,000 to $23,000. This cuts the Pell grants by $1,100 to $1,700 for nearly 14 percent of Pell grant recipients. Additional cuts are looming on the horizon.
The tight federal budgets yield a zero-sum game, where increases in one form of federal student aid force cuts in other forms of student aid. Adding 700,000 more federal work-study jobs over five years will cost more than $1 billion a year.
But how will the Obama administration pay for a one-year extension of the 3.4 percent interest rate on subsidized Stafford loans for undergraduate students? Approximately 7.4 million students will borrow about $3,500 in subsidized Stafford loans on average, costing the federal government more than $7 billion. The permanent extension of the American Opportunity Tax Credit will add several billion dollars more a year in tax expenditures. If the Obama administration doesn’t find savings elsewhere in the budget, these spending increases will force cuts in the Pell grant program, causing declines in Bachelor’s degree attainment by low-income students. That would be a bad bargain.
The risk is that the proposals for increasing student aid financing may be little more than a shell game, where the federal government gives with one hand and takes back with the other. For example, President Obama’s proposal for a one-year delay in the doubling of interest on the subsidized Stafford loan program will be coupled with increases in interest rates on the Perkins loan program. The re-engineering of the Perkins loan program will increase the interest rate on the Perkins loan from 5 percent to 6.8 percent and transform the subsidized Perkins loan into an unsubsidized Stafford loan. (This will save students some money, by shifting borrowing from higher-cost private student loans to lower-cost federal education loans. But it still involves increasing some interest rates to reduce others). Shuffling the deck doesn’t yield a net gain if there is no improvement in college graduation rates or other public policy objectives.
If the federal government can pay for cutting the interest rates on subsidized Stafford loans in half, then why was it necessary to cut the average Pell grant? Changing the interest rates and subsidized interest benefits on student loans has no impact on college access and completion rates. In contrast, the Pell grant program enables low-income students to enroll in college and to graduate. Cutting Pell grant financing forces low-income students to borrow more, shift enrollment to lower-cost colleges or drop out of college. Increasing the interest rate is a better alternative than cutting the Pell grant.
President Obama’s proposal to provide colleges with an incentive to keep tuition affordable will have a modest impact on tuition inflation. The proposal will base a college’s allocation of federal campus-based aid on whether the college keeps net tuition affordable, limits tuition increases and helps low-income students to enroll and graduate. But the $10 billion in campus-based financing represents only about 6 percent of all federal student aid financing and the allocation formula is complicated. The prospect of losing this financing may force some colleges to increase tuition even faster to compensate for the loss of campus-based aid financing.
There are limits to the ability of colleges to control costs. The consumer inflation rate has little to do with increases in college costs. College costs are largely driven by increases in the number of faculty and staff, increases in salaries, increases in facility costs, energy costs, equipment costs and health care costs, increases in institutional financial aid financing and decreases in federal and state financing. For example, if a college has a discount rate of 37 percent, the college must increase tuition by $1.59 to net $1 in additional revenue. This contributes to college tuition increasing faster than inflation by adding a multiplier effect.
President Obama’s proposal to create a mandatory “Financial Aid Shopping Sheet” and “College Scorecard”, on the other hand, will do more to constrain increases in college costs. This standardization of college cost and financial aid disclosures will provide families with clear, correct and comparable information about the real bottom-line cost of college.
This will help them make informed decisions concerning the tradeoffs between college affordability and other factors in college choice. More families will choose high quality but lower-cost colleges, forcing colleges to cut costs while maintaining or improving quality.
Now it’s your turn, Choice readers. Tell us your opinion on the president’s proposal, or at least Mr. Kantrowitz’s analysis of it, by using the box below.
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Q&A: Consumer watchdog spells out agency's tasks

A company’s obligations don’t stop with the law. It also needs to be fair and upfront with customers.
That’s the message from Richard Cordray, who was named by President Barack Obama as the first director of the Consumer Financial Protection Bureau.
“Frankly there’s a lot of fraud that’s committed in the marketplace that is not on its face necessarily technically illegal,” Cordray said in an interview with The Associated Press. Such practices will now be a target for the CFPB.
The agency and Cordray’s appointment are both controversial. The CFPB was created as part of the overhaul of the nation’s financial regulations, with a mandate to police the array of financial products marketed to consumers.
Republicans blocked Cordray’s appointment for months, saying the agency would have far too much power with too little accountability. Then earlier this month, Obama installed Cordray when Congress wasn’t in session.
With a director finally in place, the CFPB is moving quickly to flex its full authority in policing businesses such as mortgage brokers, student lenders and other businesses that previously escaped federal scrutiny.
On Thursday, the agency released a field guide for its examiners to analyze practices at payday lenders, which essentially offer customers advances on their paychecks for a flat fee. It will mark the first time the industry will be subject to such oversight.
The CFPB has started collecting public comment to help simplify the disclosures consumers receive with credit cards, mortgages and student financial aid. It will take months or even years before consumers see how these efforts play out.
But here’s what Cordray had to say about how the agency will impact consumers:
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Q: A major focus for the CFPB has been on improving the transparency of a product’s fees and terms, and the disclosures consumers receive. Are there instances where this won’t be enough and more aggressive regulatory action will be required?
A: Let me answer that question in two parts. On transparency and disclosure; a key insight here is that more disclosures don’t always make things better. As it accumulates, there can be so much dense fine print that it can actually make things much worse _ consumers find it hard to penetrate and they often will not read it.
That’s a concern and that’s why we’re trying to make things more transparent, simpler and clearer with our “Know Before You Owe” project.
However, simply making things clearer to consumers is not enough if people aren’t actually playing by the rules and defrauding consumers. There we have to enforce the rules and we have to do it fairly, even handedly, but with rigor so that everybody understands that they have to follow and respect the law.
Q: Are there practices that are technically legal yet require regulatory action?
A: If something is technically legal, that’s one issue. But we also have the authority to determine that practices are unfair, deceptive and abusive. That’s where our authority can be used to try to protect consumers, even though maybe the technicalities of pre-existing laws have been followed.
So that’s something we’re going to have to be careful about _ the use of that authority. But it certainly is necessary to protect consumers and frankly there’s a lot of fraud that’s committed in the marketplace that is not on its face necessarily technically illegal. But when you see how a product is marketed, you can see what the effect is on consumers.
Q: So in those situations, what is the most important thing consumers need to know about what the CFPB can and cannot do?
A: Consumers should know that when they feel they’re being treated unfairly, they have the opportunity to come and tell us about it. And I mean the 300 million consumers all across this country _ they can come to our website at consumerfinance.gov. If it’s a mortgage or credit card issue, they can file a complaint with us.
If it’s any other kind of issue, we will be able to take those complaints eventually.
Q: Once those complaints are in hand, what are the limits of what the CFPB can do?
A: We have three different sets of authority that Congress gave us and that we are by law responsible to carry out. We have rule making authority. And we particularly are going to be active in trying to correct some of the problems in the mortgage markets over the next year or two.
We have supervision and examination authority, which is new but very important. It’s the ability to actually go into these institutions, look at their books and records and ask questions about what they do, and really get to the bottom of things. This means both working with them where that’s possible and or bringing enforcement actions where that’s necessary.
And the third is the ability to actually enforce the law _ which is clearly needed if you’re going to have a marketplace that actually works.
Q: One of the first industries the agency will be looking at is payday lending. A concern for consumer advocates is that customers often roll over the loans, meaning they repeatedly take out new loans to repay previous loans. What practices in the payday industry raise concerns for you?
A: One of the things we’re very concerned about is making sure that those products actually help consumers and don’t harm them. So the possibility that consumers end up rolling loans over and over, and end up in this sort of debt trap where they’re living off of money at 400 percent interest rates is a concern and it’s something we’re going to look at very closely.
Q: Suze Orman has a prepaid card and Amex last year rolled out a prepaid card. Do you see any risks with celebrities and major banks backing prepaid cards, or are there upsides?
A: We generally think consumers need to take care when they’re attracted to a product for reasons that might obscure the actual price and risk involved. People want think carefully about what they’re getting into here.
In the prepaid space in particular, there’s a lot of evolution and there are a lot of new products coming out. Some have appeared to be terrible products and some may be pretty good. We’re monitoring that and as I say, it’s a fast moving market right now and we’re going to consider carefully how to address those issues as they arise
Q: A lot of major banks have adopted this theme of transparency. Chase rolled out new checking account disclosures and Citi has its Simplicity credit card. How much faith do you have that the market can “right itself” in terms of transparency?
A: I have a lot of faith in the market if it is backed by evenhanded, comprehensive rules of the road that everyone knows they have to live by. If the market is left to its own devices or if we regulate part of the market and leave the rest unregulated, as happened with the mortgage market, that created, in my view, a lot of what caused the financial meltdown _ that’s never going to work.
It is our view that what we do will actually strengthen markets.
It’s quite possible that banks would have been moving to more transparency and simpler terms on their own. I happen to think some of that is in reaction to knowing that the consumer bureau is now in place, that it’s something we’re emphasizing.
Q: Student loans were a big issue during the Occupy protests and graduates are burdened with more and more debt. Do you see any parallels to the mortgage industry?
A: I’ve read a lot that suggests that student loans may be a bubble that is developing. Obviously the major driver of the total amount of student loans is the rapid increases in tuition and the costs of higher education in the last 10 years. We don’t control that.
What we can control and what we can affect is the choices that consumers make. That they know what their choices are, that they know the difference between federal loans and private student loans _ how that can affect terms of repayment, how that can affect the price and interest rate. These are important things for consumers to know.
We’re working right now with the Department of Education on an easy to navigate shopping sheet for students and their families.
Q: What role do school financial aid offices have in explaining the costs?
A: You have to examine the particular approach of an institution in context. You have to look at the facts and circumstances. So I wouldn’t make a blanket statement about all student loan offices, but obviously that’s an initial point of contact for the student and their families on the terms of what’s being offered. That needs to be done clearly and it needs to be done so that the student and their family can understand that choice.
It’s our belief that if consumers are presented with information in a clear and understandable fashion, they are the ones who will be able to make the best choices for themselves. It will never be for us to try and make these choices for anyone.
Q: Are companies changing their practices just because they know that the CFPB is out there?
A: I think that you are seeing change in these markets. I think you’re seeing it on three sides.
One side is you now have a bureau with some good tools to actually affect these markets in a constructive way.
On the business side, many of them are recognizing that they should get out in front of it. They’re trying to see what they can change on their own to either head off the enforcement or to try to improve things because they’re persuaded that it needs to be done.
The third side is consumers themselves. And it’s very important for consumers to recognize they have a lot of power in the market. Especially with social media, as they group together and it’s not just an isolated complaint but a group of people with a similar complaint. They can affect these businesses and how they respond to them
It’s important for consumers not only to look to the bureau for help but to look to themselves and help themselves.
___
Candice Choi can be reached at www.twitter.com/candicechoi
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Families of College Bound Students: Tips on Financial Aid Forms

For parents of college students and prospective college students (Fall of 2012), financial aid forms need to be submitted soon. Typically financial aid forms for prospective students are due in January or February, while forms for returning students are due in March or April. Be sure to check the deadlines for each school where the student is applying and/or attending. Depending on the school there may be multiple forms to fill out. The first step is to determine which forms are needed:

• Free Application for Federal Student Aid (FAFSA) Form: This is the basic form required for financial aid at all colleges including all federal student loans, such as Stafford Loans and PLUS loans. The FAFSA form asks for information such as student and parent income and assets, but does not take into consideration retirement assets or the equity in the primary residence. The FAFSA will determine the family’s “Expected Family Contribution”, which is the amount that the family is thought to be able to pay – often a higher number than the parent thinks they can afford! Information and forms can be found at www.fafsa.ed.gov . Even if the family does not think they are eligible for need-based aid, but wants to access Stafford loans and PLUS loans, the FAFSA must be filled out. Certain merit scholarships may also require completion of the FAFSA forms.
  
  • Stafford Loans: Most students who fill out a FAFSA form are eligible for unsubsidized Stafford loans. First year students can borrow up to $5,500. The interest rate on unsubsidized loans is currently 6.8 percent and is not based on the applicant’s credit score. Need-based subsidized Stafford loans now have an interest rate of 3.4 percent in 2011-12 and the interest does not accrue while the student is in school.
  • Federal Direct PLUS Loan: Parents can also borrow through the Direct PLUS program. Parents can borrow up to the cost of attendance less any other financial aid received. The interest rate is presently 7.9 percent and is charged beginning with the disbursement of the loan. Please note that certain fees apply to these lending programs, so read the details carefully.
• CSS PROFILE Form: Some private colleges use a different methodology for calculating financial aid and require the College Board’s CSS PROFILE form. A list of schools requiring the CSS PROFILE form can be found on the College Board website . The CSS PROFILE form asks more detailed and broader financial questions than the FAFSA and takes into account other factors such as the equity in your house. Some schools may also request a copy of a tax return, so if possible, try to get your taxes done early.
• Additional Forms: Occasionally a college may require supplemental information, so be sure to check with the school.

For divorced parents and parents who never married, the rules may vary as to what is required, so check with the school as well as FAFSA and CSS Profile.
For prospective students, beginning in the Fall of 2011 all colleges are required to post a “net price calculator” on their websites that help families figure out what freshman year will cost. The calculations are designed to be an estimate; the financial aid office will have the final say on the actual financial aid award. It is based on the “Expected Family Contribution” computed based on information on the FAFSA form.
The process of financial aid should also involve investigating grant opportunities from sources other than the college. There are numerous opportunities for scholarship and grants and many have a separate application process. School guidance offices are often the best place to start the investigation.
In addition to financial aid, there are several tax advantages for the families of college students. The American Opportunity Credit replaces the Hope Credit through 2012. The American Opportunity Credit is a maximum tax credit of $2,500 and has a higher income limit qualification than other tax benefits. Read IRS Publication 970, “Tax Benefits for Education” to determine if you are eligible. Other tax benefits may be available to you depending on your circumstances.
FPA Member Jeanne Gibson Sullivan, CFP®, is a financial planner and principal of Financially in Tune in Wakefield, MA and a parent of two sons – a freshman in college and a high school junior.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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dar Education Lending Announces an Initiative to Help Colleges Provide Private Student Loan Consolidation Options to …

Cedar Education Lending announced that it is working with College Financial Aid and Alumni Offices to help spread the word about Private Student Loan Consolidations to recent graduates.
New York, NY (PRWEB) January 10, 2012
Cedar Education Lending announced that it is working with College Financial Aid and Alumni Offices to help spread the word about Private Student Loan Consolidations to recent graduates.
“Financial Aid offices at colleges and universities throughout the country do a terrific job advising students of Federal loan programs, grant-aid, scholarships, private loan and other financial aid opportunities,” said Ms. Samantha Karageorge, Cedar’s CMO. “Prior to graduating, students often have the chance to meet with their Financial Aid Office to discuss their outstanding Federal loans and repayment responsibilities upon graduation. This often is not the case with their Private Student Loans. Furthermore, most colleges don’t provide information or advice to recent graduates about the availability of Private Student Consolidation Loans like those offered by Cedar Education Lending.”
More specifically, Cedar has already begun working with a number of Alumni offices to include information about Private Student Loan Consolidations in the services and benefits sections on their websites, including advice, consolidation loan calculators, and links that would enable graduating students or recent graduates to better understand their options in regard to Federal and Private Consolidation Loans. This initiative will enable students to better plan for their financial future and make navigating the process a lot easier.
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Samantha Karageorge
Cedar Education Lending
201-321-9932
Email Information

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Her tuition solution

Photo by James Keivom/New York Daily News

John Jay College student Angy Rivera, an undocumented collegian who doesn’t qualify for federal aid or loans, is going online to raise tuition money by selling $5 “education bracelets.”

John Jay College student Angy Rivera doesn’t have a green card — and that means she doesn’t qualify for federal financial aid or loans to help with $2,565 in tuition a semester.
Like some other undocumented students around the country, she’s turned to the Internet to raise the money so she can stay in school.
Using Facebook or the website Chipin.com, they are coming out as undocumented and asking for help, often selling something homemade in exchange for donations.
“At 3 yrs old I became undocumented in the United States,” Rivera, 21, posted on her Chipin page, where she sells handmade “education bracelets” for $5.
“Often times it’s hard to ask for help, but now, I’m asking you to place a donation that will help me continue my education.”
Tuition hikes forced her to cut back to part-time. “The few scholarships that I did receive only paid off a semester or two,” she said.
The Colombian-born criminology student has raised only $60 of a $1,000 goal, but some of the money has come from perfect strangers.
New York allows undocumented students to pay in-state tuition rates, but state and federal aid is off-limits. The Board of Regents is pushing to open New York’s Tuition Assistance Program to all students.
Students around the country are in similar straits and turning to Chipin.
In Florida, Juan Escalante, 22, raised $1,000 by sending, “I am undocumented” T-shirts to those who donated $25.
He was able to make his final tuition payment and graduate from Florida State University in Tallahassee last month.
Texas A&M student Jose Luis Zelaya crochets and sells beanie hats, and has gotten so good he thinks he can break the Guinness World Record for most stitches per minute.
He’s sold about $1,000 worth through a Facebook page.
When he was 13, Zelaya left a life on the streets in Honduras to join his mom in Houston.
Last month, he was chosen to give the invocation at his graduation. Now, he’s in an education master’s program.
“It is a pretty heavy burden, but I have been able to do it so far,” said Zelaya, 24. “A lot of people are impressed that I’m a guy and that I’m making beanies for a good cause.”
epearson@nydailynews.com

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EdR Announces Update to its Brand and Logo

MEMPHIS, Tenn.–(BUSINESS WIRE)– Education Realty Trust Inc (NYSE:EDR – News), one of the nation’s largest developers, owners and managers of collegiate housing, today announced the company will conduct business in the future as EdR and launch a new logo and branding campaign.
“Within the last two years, the company has repositioned its portfolio, enhanced operating systems and realigned goals and management team with significantly positive results,” said Tom Trubiana, EdR’s chief investment officer and executive vice president. “We needed a new brand and logo that would portray this new attitude and spirit to our customers and employees, and also remove any corporate identity issues.”
Since its founding in 1952, the company has conducted business and marketed through several names, such as, Allen & O’Hara Education Services, Inc. and Allen & O’Hara Development LLC. In 2005, the company went public as Education Realty Trust and adopted EDR as its stock ticker symbol but still operated under several different Allen & O’Hara names.
“Being known simply as EdR and launching a new brand and logo will help alleviate any confusion in the marketplace, and unite the company’s different service lines and departments—financing, development, construction and management—under one name,” said Trubiana.
The new name and logo was created by John Malmo Marketing Consulting after extensive interview, research and development activities.
“Our goal was to unite all of the different entities of Education Realty Trust under one name with a visual identity that would reflect the innovative and dynamic spirit of today’s company with the integrity, reliability and quality reputation we have enjoyed for more than 50 years,” said Susan Jennings, vice president of corporate communications and marketing.
“Many people, both internally and externally, referred to us as EDR—the initials in our stock ticker symbol,” added Jennings. “The d became lower case because it did not represent a separate word, but was part of education, and our new logo was born.”
The marketing consultant then created the logo which is solid, innovative and fresh. The color green is a nod to our financial services and dependability as well as the focus on creating sustainable buildings and operations so necessary in today’s on- and off-campus collegiate housing.
The various properties EdR owns or manages across the United States will retain their individual names for marketing and identity purposes. The Allen & O’Hara name will continue as Allen & O’Hara, Inc., an independent company which specializes in procurement services of furniture, fixtures, equipment and operating supplies for a diverse group of clients that own hotels, apartments, senior living facilities and student housing. Allen & O’Hara, Inc. is not an affiliate of EdR or Education Realty Trust Inc.
About EdR
EdR (NYSE:EDR – News) is one of America’s largest owners, developers and managers of collegiate housing. EdR is a self-administered and self-managed real estate investment trust that owns or manages 61 communities in 23 states with over 34,700 beds within more than 11,200 units. For more information please visit the company’s web site at www.educationrealty.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements about the company’s business that are not historical facts are “forward-looking statements.” Forward-looking statements are based on current expectations. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause the company’s future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements. Such risks are set forth under the captions “Item 1A. Risk Factors” and “Forward-Looking Statements” in our annual report on Form 10-K and under the caption “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (or similar captions) in our quarterly reports on Form 10-Q, and as described in our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the dates on which they are made, and the company undertakes no obligation to update publicly or revise any guidance or other forward-looking statement, whether as a result of new information, future developments, or otherwise


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State investments continue to grow

Wyoming made $770 million from investments of its $14.4 billion in trust funds during the 2010-11 fiscal year and finished repaying losses from the 2008 economic bust.
“We’ve had two really good years,” State Treasurer Joe Meyer told the Select Committee on Capital Financing and Investments, which met in Casper earlier this month. “So we live happily ever after until the next crisis comes.”
Meyer presented his investment report to the legislators to bring them up to speed on the state’s major permanent trust funds before the budget session begins.
“For the fiscal year ending June 30 … we made $770 million on this $14 billion portfolio, and we distributed out $622 million [to various state agencies],” said Chief Investment Officer Michael Walden-Newman, from the treasurer’s office.
The treasurer also put $91 million back into the permanent trust funds, completing repayment of some $200 million that was lost through unfavorable business decisions in the 2008 economic downturn ($110 million was repaid in 2010).
“This past year we paid off the remaining $91 million, so that came out of the $770 million,” Walden-Newman said. “We also had some losses that we carried on the books from the crisis … they were about $35 million that we paid off and then we paid the investment managers [$42.4 million]. So what we distributed was $620 million for the fiscal year, which was actually very good considering how horrible it had been a couple of years prior.”
Meyer, meanwhile, was still mad at the losses from the downturn, which he attributed largely to decisions by some of the private investment managers who no longer work for the state.
“I can accept an investment manager losing money with their style, that’s to be expected; you can’t tell markets that much,” Meyer said. “But when they get stupid enough to sell at the bottom of the market, without telling us, I lose my temper and I get mad. They have since apologized to us; I said well it’s a little bit late to apologize to us now.”
The treasurer’s office, in conjunction with the State Land and Investment Board (composed of the state’s top five elected officials, including Meyer), oversee management of the state’s $14.4 billion in established funds, which include the Permanent Wyoming Mineral Trust Fund ($5.3 billion); Hathaway Scholarship Fund ($502.8 million); Higher Education Endowment Fund ($111.5 million); Workers’ Compensation Fund ($1.36 billion); and the Tobacco Settlement Fund ($67.5 million). There’s also the Permanent Land Fund, which is actually three separate funds: the Common School Land Fund ($2.24 billion); University Permanent Land Fund ($18 million); and the Remaining Permanent Land Funds ($122.8 million). In addition, there are a myriad of smaller funding sources in the state (such as the Wildlife Trust Fund) which are combined into what’s called the State Agency Pool, and totals some $4.7 billion.
Some of the funds, such as the Permanent Mineral Trust Fund, the Hathaway Scholarship Fund and the Higher Education Endowment Fund, are “inviolate,” which means once the money is in, it can never come out, the fund, or corpus, can never be allocated. The interest from investment of that money, however, can be spent and pays for programs tied specifically to the fund, such as Hathaway scholarships.
To ensure their inviolability, there are specific guidelines and risk limits for these permanent funds, with the primary objective being to protect the money.
“We just don’t have that many risky investments,” Meyer told the committee. “Actually, when the bottom dropped out in 2007-2008, this very, very conservative portfolio … dropped 11 percent in value. Our retirement system lost 35 percent, and most state and public funds across the United States lost in excess of 30 percent in value. That doesn’t mean that we’re geniuses, it means the type of portfolio that we built has been stretched … I prefer a diversified portfolio.”
Meyer said while there’s caution, there’s also alertness to the market.
“We’ve got some flexibility in there to see what’s really happening in the real world,” Meyer said. “That’s when Mike [Walden-Newman] and R.V. Kuhns [the state’s private investment management firm] get their heads together, and they call the managers, and they say, ‘What do you think is going on?’ It’s a very interactive, very alive process. You know we’re damn fortunate to have money …”
“We’re very conscious in the treasurer’s office that the primary investment portfolio is the protection of the corpus of the funds,” Walden-Newman said. “And secondly, to provide liquidity to meet the state’s needs. And then after those is to provide the highest possible rate of return within the risk parameters … And the risk parameters are set in the asset allocation, and for us the risk parameters are mostly set by the cap placed on equity exposure of 55 percent of the permanent funds, so that we have less volatility in the stock market, and a more reliable and predictable income in the bond market.”
The investment income isn’t only interest or revenues, but also the value of the asset itself, i.e., capital gains (or losses). Meyer said that while the value of many of the stocks, bonds and other assets went up substantially this year, he cautioned that the values go can go down as quickly as they go up. Because of the volatility, “You’ll see a $450 million shift in market value in just one month,” Meyer said as an example. “September was a miserable month, October was a really hot month, so if you ask how much capital gains we can get, I would never expect $450 million in one month, and capital appreciation, but that’s what happened.”
Meyer said they only count capital gains as income in July at the end of the fiscal year, if they cash in. Capital gains also aren’t counted as income for budgeting purposes in the important Consensus Revenue Estimating Group (CREG) report, which is the main benchmark used in developing the state budget.
“Those capital gains haven’t ever been, and won’t be, profiled in the CREG report, but they’ll come to the state …” Meyer said, noting the current policy of the treasurer’s office.
State budgeters, however, are aware it might be there at the end of the fiscal year ($275 million of the $622 million that was distributed to the agencies this past fiscal year came from capital gains).
“Now that can become a serious sum of money come July,” noted Rep. Steve Harshman, R-Natrona, who’s a member of the legislature’s Joint Appropriations Committee.
Another issue that arose in the meeting concerned what are called “reserve accounts,” which are less restricted than the fixed funds, but designated for the same purpose. For instance, if investments from the Hathaway Scholarship Fund come up short to finance all the qualifying students, the reserve account is there to make up the difference.
The reserve accounts generate investment interest as well, which in recent years has gone directly into the state’s General Fund. The committee, however, voted to introduce bills that would have that interest stay with the reserve account in the case of the Hathaway Fund and the Common School Fund.
While the state apparently isn’t projecting a significant increase in investment income this current fiscal year, the funds are still expected to grow.
“I tell people it took Wyoming 113 years to get its first $5 billion in this portfolio,” Walden-Newman said, commenting that was around 2003. “It took five years to get the next $5 billion, so in 2008 we were at $10 billion. And we’re going to be at $15 billion in this portfolio, based on our projections, about this time next year … and on out.”

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Ziegler Closes $38 Million Bay Area Charter Financing

CHICAGO, IL–(Marketwire -12/07/11)- Ziegler, a specialty investment banking firm with over a 100 years of experience, is pleased to announce the successful closing of the $38 million Bay Area Charter Foundation, LLC financing. This is the first bond issue for this borrower and the third bond issue Ziegler has underwritten for schools managed by Charter Schools USA.
Bay Area Charter Foundation, LLC is a Florida 501(c)(3) that holds charters for two charter schools in the greater Tampa, Florida area. Both schools (Woodmont Charter School and Winthrop Charter School) opened in August 2011 and are managed by Charter Schools USA, a for-profit EMO based in Fort Lauderdale, Florida.
The current financing will refinance bridge loans that funded acquisition and construction costs for the two school facilities, as well as provide funding for an expansion at the Winthrop facility. Upon completion of the Winthrop expansion in fall 2012, the two schools will have a combined capacity of approximately 2,380 students in grades K-8.
With Ziegler’s expertise in charter school financing and our extensive capital markets capabilities, these combined efforts resulted in the successful placement of all bonds that met the borrower’s structural and timing constraints. Michael Braun, Senior Vice President in Ziegler’s Religion & Education practice, stated, “This financing fulfilled a long-term goal of Charter Schools USA (CSUSA) to open a charter school in the Hillsborough County area. These schools will benefit the community by expanding school choice options with CSUSA’s viable and proven curriculum while also creating a positive learning environment for the students.”
For further information on the structure and use of this issue, please see the Electronic Municipal Market Access system’s Document Archive: http://emma.msrb.org/SecurityView/SecurityDetails.aspx?cusip=A0C4C11167337732398CA7ED53DE7BF0A.
For more information about Ziegler and please visit us at www.Ziegler.com.
About Ziegler:The Ziegler Companies, Inc. (Pinksheets: ZGCO.PK – News) together with its affiliates (Ziegler) is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion and education finance, as well as corporate finance and FHA/HUD. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler creates tailored financial solutions including bond financing, advisory, private placement, seed capital, M&A, risk and asset management. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client’s experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.
This communication does not constitute an offer to buy these securities. The offering is made only by the Official Statement and through an appropriately registered representative. The Series 2011 Bonds may not be appropriate for all investors. Market value and/or accrued interest will fluctuate during the period held, and, if sold prior to maturity, the yield received may be more or less than the yield calculated at the time of purchase. Discounted yields herein are gross yields to maturity. Discounted bonds may be subject to capital gains tax, rates of which will vary, so investors should consult their own tax advisor with regard to their personal tax situation. Interest on municipal bonds may be exempt from federal income tax but may be subject to tax for residents of certain states. For bonds designated AMT, taxes may exist for certain investors. Ziegler will sell these bonds on a principal basis.
The corporation or its officers, directors, stockholders, or members of their families may at times have a position in the securities mentioned herein and may make purchases or sales of these securities. Not all call or put information is identified in the description above. Please be sure to discuss any special features with your Financial Advisor before deciding whether to invest in these securities.

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