|
People Capital Weekly Briefing
December 28, 2009 |
|
| News and insight from the world of higher education, student loans and peer-to-peer lending. To learn more about People Capital and how it is revolutionizing education finance please visit us on the web at www.people2capital.com and learn more about how credit risk assessments, based on a student's Human Capital Score™ underpin a cutting-edge peer-to-peer lending platform. |
|
|
News about People Capital
People Capital and
the Human Capital Score were featured in Uncover the Internet, a blog that
looks for new Web sites and tools on the Internet. The blog is found on
Everyday Joe.com (Circ: 111,000 unique visitors a month).
Human Capital Score - An Idea of Your Worth (Everyjoe.com)
With the New Year staring us in the face, you may have a student at
home that's looking at making those final decisions for college. Part
of that decision is how you're going to pay for that college education. The folks at People Capital - Human Capital Score
have come up with a methodology to determine just how much you might be
able to expect your student to be worth and to potentially earn when it
comes to their financial aid assistance.
(Read More)
After being featured in The Wall Street Journal, People Capital was mentioned on the Student Lending Analytics blog.
Author Suggests Making Federal Loans Contingent On Student Prospects
(Student Lending Analytics)
With increasing
concerns about the growth of government, I am not sure how the populace would
feel about the Dept. of Education being the ultimate decider when it came to
who did and didn't receive loans, even if they utilized very strict and
transparent criteria. Maybe they could outsource this role to People
Capital's Human Capital Score, which received a favorable review in the Wall
Street Journal. Regardless of how the Dept. did it, rolling back what
is perceived by many as an entitlement ("college loans for all")
would be a challenge (how is that for an understatement?).
(Read More)
|
 Industry News and Trends
Listed below is a weekly compilation of Industry updates. The major highlights include:
- How college selectivity has changed over time.
- The credit agreement between the Student Loan Corporation and Citibank.
- A look at some of the flaws within the current financial aid system.
Are Colleges Really More Selective? (The New York Times)
The number of high school graduates has climbed to a record height this decade.
You'd think that would make college admissions more competitive than ever, but
a recent paper by an economist suggests otherwise.
Caroline M. Hoxby, professor of economics at Stanford and director of the
Economics of Education Program for the National Bureau of Economic Research,
points out in "The Changing Selectivity of American Colleges" that
while high school graduation rates are up, so too is the number of freshman
seats on the market.
Since 1955, Ms. Hoxby writes, the number of high school graduates has grown by
131 percent while the number of college spots has risen by 297 percent. She
also notes that communication and transportation costs have declined, making it
easier for students to learn about universities - and vice versa - and for
students to travel farther to go to college.
As a result, Ms. Hoxby asserts, 90 percent of colleges are less selective today
than they were in the 1950s and '60s.
She concludes in her report, rather cryptically, that:
Typical college-going students in the U.S. should be unconcerned about rising
selectivity. If anything, they should be concerned about falling selectivity,
the phenomenon they will actually experience.
But for students applying to elite colleges, the picture is dramatically
different. Those institutions, Ms. Hoxby says, are growing more selective. They
account for the remaining 10 percent of colleges whose patterns she calls
"an exception to the rule."
(Read More)
It's Ten Days And Counting... (Student Lending Analytics)
Student Loan Corporation's latest 10-Q highlighted the importance
of the credit agreement between STU and Citibank. STU expected to have a
replacement executed by the end of this month:
"Although the Omnibus Credit Agreement expires on December 31,
2009, existing borrowings will continue to mature based on their originally
contracted maturities. Additionally, the Company is currently
negotiating a new agreement with CBNA as well as exploring alternative sources
of funding that can be used to replace or supplement the current agreement. The
structure of the potential replacement to the Omnibus Credit Agreement that
currently is being negotiated includes short- and long-term funding, various
financial covenants, commitment and unused liquidity fees and secured as well
as unsecured borrowings. The Company expects a replacement will be
executed before the expiration of the current Omnibus Credit Agreement.
However, there is no assurance that a suitable replacement facility will be put
in place by year end, and, if not put into place, whether and when
the Company could obtain sufficient alternate sources of financing on
acceptable terms. If a suitable replacement or replacements,
whether from CBNA or otherwise, are not put in place by year end,
the Company will no longer have a guaranteed funding source. This
could have a material adverse effect on, among other things, the Company's
ability to originate new loans, repay its debt obligations, fund business
operations and maintain the current level of profitability."
(Read More)
Subprime Student Loans (Inside Higher Ed)
An unintended consequence of making access to college an entitlement
readily available to all high school graduates is that serious study in
high school has become optional, even for those intending to go to
college. Without an incentive to study diligently, many students are
disengaged in high school and, as a result, underprepared for college.
Some freshmen arrive at college thinking that having fun is the main
reason they are at college and that the pursuit of knowledge should be
available for when they have nothing better to do.
This situation came about relatively recently, partly the result of a
change in the meaning of financial aid. Until World War II, financial
aid referred to traditional scholarships that were awarded to
academically meritorious students who mostly also were needy. The G.I.
Bill, which financed college for discharged veterans of World War II,
foreshadowed broader programs of federal grants and loans -- 20 at
present from the federal government, 17 from the Department of
Education and 3 more from other federal agencies -- that essentially
universalized "financial aid." Few of them require better than mediocre
previous or current academic achievement. As a consequence, about 30
percent of incoming freshmen at four-year colleges and over half the
freshmen at two-year colleges are assigned to remedial courses in
writing, mathematics, or other courses.
(Read More)
|
|
Archived versions of our e-newsletters can be viewed here
The People Capital Team
Info@people2capital.com
|
|
|
|
|
