FAP734: Innovative Ways to Pay for Student Loans, Securitization

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FAP734: Innovative Ways to Pay for Student Loans, Securitization

12 February 2008 1 views No Comment

FAP734: Innovative Ways to Pay for Student Loans, Securitization

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Student Financial Aid News
+ Chronicle: More than a million private records of students were compromised in campus-security breaches in the United States last year, and the number of colleges reporting such incidents was far higher than the previous year, according to a study that analyzed reports on computer security by the news media and computer-security organizations.
+ About 100 of the incidents exposed Social Security numbers, involving a total of 1,085,708 records.
+ NASFAA: “By packaging mortgages, credit card balances, student loans and other debt into interest-paying bonds, securitization can be a win-win proposition: Investors earn decent interest rates and borrowers have more access to credit, presumably at lower rates than if banks alone were calling the shots,” The Los Angeles Times reports. “But as usual when Wall Street is involved, greed took over in the securitization market in recent years. Bonds tied to sub-prime mortgages, the riskiest of such loans, have seen the most dramatic fall-off. But the volume of debt packaged for sale to investors also declined last year in the auto, student-loan and small-business-loan sectors, according to data tracker Inside Mortgage Finance. The harsh truth is, if the securitization business – sullied though it may be – can’t celebrate a comeback in the next few years, the pain won’t be contained there.”

Scholarship Update
+ The Boston College Asian American Scholarship was created in 1995 through the initiative of a group of students, faculty, and administrators, to recognize BC juniors whose commitment to academic excellence, to promoting Asian American awareness, and to serving both the Asian American and the wider communities on and off campus, is exceptional.
+ The Scholarship provides 75% of tuition for senior year. In addition, up to four finalists will be awarded $1,000 grants for purchases at the Boston College Bookstore. All full-time, Boston College juniors who have maintained a cumulative GPA of 3.3 are eligible to apply for the scholarship.
+ $35,000
+ Details at our free college scholarship search site

Financial Hacks
+ BankNet360: A new website started by a recent graduate to pay back his education loans says much about the financial straights of many young alums today.
+ When Luke Livingston of Portland, Maine, graduated in May 2007, the last thing on his mind was debt. However, after realizing his entry-level salary would barely be enough to cover the basic cost of living, paying his student loans seemed impossible. The graduate of Clark University in Worcester, Mass. spawned www.sponsormyloans.com.
+ Livingston is charging $200 a month for a page of ads on SponsorMyLoans.com. He already has sponsors for March and May (April is currently in the works). He is using the money to pay back his loans, which – unless interest rates increase – will take Livingston seven years to retire.
+ What does this mean for you? Innovative ideas like this are great ways to pay for college or handle your loans afterwards, but you have to innovate – copying someone else’s idea won’t work
+ Who has money? Money comes from two places – corporations or crowdsourcing

Mail Bag
+ Wayne Henderson calls in to get show notes in a podcast
+ iTunes!

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