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People Capital Weekly Briefing
November 9, 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
We were featured in an article about peer-to-peer lending on the blog for the site
Thrive (Circ: 10,961 unique visitors a month), a personal finance and
online money management Web site. Peer to peer lending: So crazy it just might work ... People Capital is different because it exclusively matches
up student-borrowers with cream-of-the-crop lenders. Since most college
students haven't had time or knowledge to build up good history, People Capital
projects a Human
Capital Score after dissecting and analyzing GPA's, standardized test
scores, along with the borrower's college and major to determine their ability
to pay the loan back. (Read more)
The blog for
SpendonLife.com posted a Q&A with People Capital.
SpendonLife.com (Circ: 18,107 unique visitors a month) is an online resource
for people who want to find info about credit and also offers credit report and
score services. People Capital Offers a New Student Score to Rival FICO ...
FICO schmico. Credit scores have long
proven an obstacle for students trying to get private loans. But now, there's a
new score in town specifically designed for students. The Human Capital Score from People Capital doesn't assess students based on
their credit history (which is often non-existent), but rather on factors
like their school, major, and GPA. Your Human Capital Score can hook you up
with good loans from quality lenders to cover expenses that government funding
and part-time jobs just aren't covering. I
first heard about People Capital at Finovate,
and wanted to get more information about this new student lending service. (Read more)
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 Industry News and Trends
Listed below is a weekly compilation of Industry updates. The major highlights include:
- Reasons why college costs seem to always be on the rise.
- How university budget shortfalls are directly affecting students.
- An update on the direct loan transition.
- An example of increased need for financial aid.
Why Does College Cost So Much? (The Motley Fool)
Why does college cost so much? If you have kids in college -- or kids,
period -- in America today, the question's more than academic. It can mean
having to make a choice between getting your child a college degree or planning
a comfortable retirement for yourself.
As college tuition costs soar, a lot of us wonder why. What's wrong with these
people that they keep raising prices that are already unaffordable? And what
can we do about it? I sat down with Professor Feldman to talk over these
issues, and more.
Rich Smith: So, Professor, let's tackle the question head-on -- does college
cost too much?
David Feldman: Not "too" much. "So" much. What we've tried
to do in this book is go back over the history of the last 60 years and examine
college from an aerial view that is rooted in broader U.S. economic history,
comparing cost trends in the higher education "industry" to those of
other similar industries. We take each of the common arguments against college
costs -- that colleges are dysfunctional, that they engage in arms races with
their peers, and that give "Country Club U." amenities to their students
-- and examine whether they hold water, whether college costs really are rising
faster than they should, and if so, why?
And what we've found may surprise you: College costs are rising faster than the
inflation rate. But that isn't because they're "country clubs" --
it's more because they're "prep schools." To prepare an undergraduate
these days requires a lot more expensive stuff, like high-intensity lasers and
big computing resources, than it did in the past. It costs money, sure, but our
students demand it because their potential future employers demand it.
(Read More)
At Public Universities: Less for More (The New York Times)
Susan Li's senior year at the University of California, Los Angeles, was
fast approaching, and she was running out of time. She needed at least three
classes to qualify for financial aid. But a week before classes began, she had
registered for only one course.
In her first two attempts to register, she hadn't been able to get her
outstanding general-ed requirements or any advanced classes in her major.
Classes were full, or not being offered this term. If she can't complete what
she needs to graduate, Ms. Li doubts she can afford a fifth year. She has taken
out $8,000 in loans each year.
The university is facing a $131 million budget shortfall this year, and Ms. Li
is among the many students who are feeling the pinch. U.C.L.A. has eliminated
165 courses, a full 10 percent reduction. Even in recent years, Ms. Li says,
she has had to sit on the steps in crowded lecture halls. She was one of
several hundred students who gathered at Bruin Plaza as the school year began
to protest cutbacks and a tuition and fee increase of $1,170, with a planned
$1,344 bump next year.
While U.C.L.A.'s money woes are extreme, they are familiar to many flagship
universities. The University of Arizona, the University of Wisconsin and the
University of Florida are among many that are scrambling because states are
kicking in shrinking portions of their budgets.
(Read More)
Dept. of Education Provides Update on Direct Loan Transition
(Student Lending Analytics)
From the Department of Education November edition of Direct Loan Source:
There has been much discussion about the risk of transitioning
thousands of schools into the Direct Loan Program by the beginning of the next
academic year. Most of the schools that have already made the transition to
Direct Lending report having done so with few, if any, issues. The Department
has ample capacity to transition all remaining schools before July 1. There is
minimal transition risk if schools begin the process in the next few months.
Over 5,000 domestic schools currently make disbursements in either the
Direct Loan or the FFEL Program. Of those, over 2000 schools currently
participate in the Direct Loan Program.
Of the approximately 3000 schools currently participating in the FFEL Program,
more than 2,800 currently participate in the Pell Grant Program and thus are
familiar with the Common Origination and Disbursement (COD) System. This is the
same system used to originate Direct Loans, and existing familiarity with the
system greatly simplifies the transition process. In addition, more than 600 of
these schools have officially notified the Department of their intent to
participate in the Direct Loan Program and over half have registered for Direct
Loan training in the coming month.
(Read More)
Financial Aid Tide Rises (Omaha World-Herald)
More Nebraska students are turning to Uncle Sam for help with
their college expenses.The University of Nebraska system has seen increases in
every financial aid category: grants that don't have to be repaid,
government-financed loans and work-study programs.
University of Nebraska-Lincoln students, for example, took out a record
amount of federally financed student debt in the 2008-09 academic year: $101
million.
That was a 16 percent increase, with UNL topping $100 million in loans for
the first time. The university expects to match that total again in the current
school year, said Craig Munier, director of financial aid.
Almost half of UNL's 24,100-student body borrowed money for
college expenses last school year.
Creighton University is experiencing a similar trend, although the dollar
amounts are much smaller at the private Jesuit institution in Omaha.
Need-based aid at all four major NU campuses was a combined $151 million
last school year and projected to exceed $161 million for 2009-10, said Kristin
Yates, director of institutional research.
Those figures don't include unsubsidized student loans, which are awarded
without regard to family income.
(Read More) |
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The People Capital Team
Info@people2capital.com
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