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People Capital Weekly Briefing
June 22, 2009 |
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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.
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News about People Capital
As a result of the continued coverage of our Human Capital Score in the media (e.g. How Much Money Should I Borrow for College?, US News & World Report), we have been approached by a number of entities to explore other business opportunities for the model itself.
This past week, we have been talking to educational consultants and advisors about using the tool to help students make informed decisions about college and major choices. We have also held discussions with recruiters about use of the model to identify the potential of different candidates. |
 Industry News and Trends
Listed below is a weekly compilation of Industry updates. The
major highlights indicate that:
- US Supreme Court has agreed to hear a Federal Student Loan Bankruptcy case dating back to 1994.
- A new charitable minded Web-site called Unithrive debuted last month. The site matches Harvard alumni lenders and cash-strapped Harvard students.
- Connecticut Student Loan Foundation no longer acting as a Lender for FFELP or Private Loans. The agency also had a recent downsizing from a staff level of 162, down to 45 staff remaining.
- The Department of Education announced the four servicers who were awarded servicing contracts to support servicing the FFELP loans that are sold to the Department. Servicers include: Great Lakes, Nelnet,PHEAA, and Sallie Mae. Volume distributions have not been announced.
U.S. Supreme Court Agrees to Hear FFELP Student-Loan Case (The Chronicle of Higher Education)The U.S. Supreme Court agreed today to hear arguments in a case that hinges on whether students can avoid repaying their federally backed student loans without showing that making the payments would cause them financial distress or 'undue hardship, The Chronicle of Higher Education reports. In 1994, Francisco J. Espinosa filed for a Chapter 13 bankruptcy, listing $13,250 in federal student loans as his only debts. He agreed to repay the loans, held by United Student Aid Funds Inc., over four years. The lender was notified of the court-approved plan and did not object even though it had filed a claim for $17,832, which included interest on the borrowed amount. After the repayment plan was finished, however, United Student Aid tried to collect the difference and then filed suit, arguing that the Chapter 13 plan was void because federally guaranteed loans cannot be discharged unless the borrower initiates an 'adversarial proceeding, showing both the bankruptcy court and the lender that repaying the loans would be nearly impossible. I'm Going to Harvard. Will You Sponsor Me? (New York Times) A new Web site, www.Unithrive.org that brings together the charitable minded and those in need has posted the details of a few students requests. Unithrive, which made its debut last month, matches Harvard alumni lenders and cash-strapped Harvard students, who post photographs and biographical information and can request up to $2,000. The loans are interest-free and payable within five years of graduation.The nonprofit site is the brainchild of three recent Harvard graduates, who hope it can help ease the crisis in paying for college, especially if it is one day rolled out to other colleges that cannot afford to be as generous as their alma mater, which already awards scholarships to all students with demonstrated need. The appeal of direct donor-to-student loans, Unithrive's founders say, is that alumni will have a personal connection to current students: those requesting loans list hometowns, majors and classes they have taken. Alumni can lend to students with whom they feel a bond. (Read more) Connecticut: Student Loan Foundation Can No Longer Act as Lender (Hartford Courant) The financially struggling Connecticut Student Loan Foundation will stop offering new federal loans because of its uncertain future, the Hartford Courant reports. The foundation, which had been issuing about $130 million in loans a year, has been notifying colleges and guidance counselors that it can no longer act as a lender. The decision will have no effect on those who already have loans through the foundation. The organization is in dire financial straits and may not be able to make loan disbursements, said Mike Meotti, a member of the foundation's board of directors. The worst thing you can do is tell students in June or July they have a loan, but then not actually be able to make the disbursement to the college in September and January. The struggling foundation is dealing with harsh criticism from state auditors, the resignation of most of its board of directors, and financial problems that have put its Rocky Hill headquarters in foreclosure and prompted it to pare its staff of 162 to about 45. Nine employees were laid off Friday. And The Winners Are...Department of Education Awards Servicing Contract To.... (Updated) (Student Lending Analytics)The Department of Education announced that they would be awarding the contract to service FFELP loans sold to the Department to four vendors. The servicers awarded the contract are Great Lakes, Nelnet, PHEAA and Sallie Mae. Notable in their absence from this list is Affiliated Computer Services (ACS) who is the current contractor for the Direct Loan program. Wells Fargo, the sixth finalist, chose not to participate in the final round. |
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The People Capital Team
Info@people2capital.com
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