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People Capital Weekly Briefing
June 29, 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
On the business side, we are very pleased to announce that we have retained Robert Lavet of D.C.law firm Powers, Pyles, Sutter & Versille PC to provide advice and assistance on regulatory issues. Rob is the former General Counsel for Sallie Mae.
Rob will help advise us on issues including compliance with the Higher Education Opportunity Act, Truth-in-Lending Act and their implementing regulations, the Equal Credit Opportunity Act, and other state and federal statutes, including state consumer lender licensing requirements. |
 Industry News and Trends
Listed below is a weekly compilation of Industry updates. The
major highlights indicate that:
- An article published by Seeking Alpha explains the increases of College education (326% over a 22 year span).
- Dept of Ed. and IRS Announce Joint Venture to Populate FAFSA with Tax Data
- Loanio files S-1 with SEC
- NY Attorneys General Cuomo announces plans for Loan fines
- President Obama's plan to make changes to the Pell Grant program is being reviewed and is encountering some resistance on Capitol Hill
College Tuition: Explaining the Increases (Seeking Alpha) Everyone now seems to agree that US house prices got out of hand and that the US health care costs are at an unsustainable level. Well, everything is relative: Between 1987 and 2009 US college tuition and fees increased by a staggering 326% (6.8% annually), while medical costs went up by "only" 186% (4.9% annually) and house prices by 135% (4.0% annually). Note that due to the housing boom, during 1987 - 2007 house prices went up by 252% (6.5% annually), almost as much as college tuition and fees in that period.
Dept of Ed. and IRS Announce Joint Venture to Populate FAFSA with Tax Data (NASFAA)
As widely expected and reported, Secretary of Education Arne Duncan announced improvements to the FAFSA, beginning this summer, and a planned future partnership with the IRS that could radically change the application process for students and relieve students and schools of the verification process. "This plan is a huge win for students, and we are delighted that the Department is moving quickly to simplify the FAFSA, which has been a barrier to college access for so long," said Dr. Philp Day, President and CEO of NASFAA. "We are very excited about the IRS partnership, which would streamline the process for students even more, and, we hope, remove the federal requirement that our schools collect tax returns to verify applicant data so that they can focus on counseling students." In a White House press briefing, IRS Commissioner Douglas Shulman said his agency was glad to partner with the Department of Education to be part of the President's initiative to simply the FAFSA. Shulman said the current FAFSA is "an endurance test" that collects data not even required on tax returns. Don't Count Loanio Out; Files S-1 with SEC (P2P Lending News) Loanio has filed an S-1 with the U.S. Securities and Exchange Commission to offer peer-to-peer loans through their web site at Loanio.com.
For two years, ever since New York Attorney General Andrew M. Cuomo began hitting up lenders and colleges for six- and seven-figure payments to settle accusations that they had violated state laws with their student loan practices, his critics have wondered what he planned to do with the millions of dollars he's collected, Inside Higher Ed reports. Underpinning their questions has been skepticism -- especially as the months have turned to two years now -- about whether Cuomo would follow through on his promise to use the money (which, depending on how one counts, was at least $13.2 million) to help student loan borrowers. Last month, New York State's Department of State published a notice announcing the availability of "up $13 million" in "student empowerment grants" for a pair of projects. The two grants will be awarded to (1) create a "Web-based, live-operator staffed student loan center" to help students and parents choose the best loan options and minimize loan debt, and (2) produce a campaign of public service announcements about financing a college education, with an emphasis on avoiding loan debt. Obama's Education Budget Sees Some Pushback on Capitol Hill (U.S. News and World Report)
Congressmen are challenging some of the biggest programs in the fiscal 2010 education budget request that Education Secretary Arne Duncan recently outlined to Senate and House appropriations subcommittees, U.S. News and World Report reports. Duncan's proposals to move the Pell Grant program, which promotes college access for low-income students, from a discretionary program to a mandatory one and to index its maximum award to inflation plus 1 percentage point encountered some resistance. ... [O]ne representative said that indexing the maximum award could have the 'reverse effect' of putting a ceiling on the amount of future increases. |
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The People Capital Team
Info@people2capital.com
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