The Federal Student Loan Program Options Essay - 1009 Words

This memorandum analyzes and discusses the Federal Student Loan Program options currently offered, and attempts to recommend the President a feasible policy alternative to redress the program’s currently expensive budgetary expenses to the federal government. Executive Summary The Federal Government offers Student Loans for higher education through two different subsidized programs that are administered and funded in similar yet different ways: the Federal Family Education Loan (FFEL) program guarantees loans made by private lenders, whereas the Federal Direct Loan Program (FDLP) makes loans directly to borrowers.7 These direct guaranteed loan costs are calculated with respect to the statutes implemented under the Federal Credit Reform Act (FCRA) of 1990 to impact the budgetary costs levied on the federal government less than when evaluated using fair-value estimates, which includes administrative and risk costs. 7 For this reason, the federal debt originating from student loans has soared unseen to the public eye. Universities and financial banks as well as federal contracting banks have increased students’ loan costs for attending school due to natural value, tuition and interest rate increases. 7 As a federal program aiming to provide higher edu cation for the greater public, student loan programs must be monetarily feasible to both students and the federal budget when considered at fair-value estimates instead of under FCRA values. Problem Statement: TheShow MoreRelatedOverview (Salinas):. Kean University Is A Public University1694 Words   |  7 PagesKean University offers many different services to their students enrolled, including one of the most popular department on campus, The Office of Financial Aid. The Office of Financial Aid is devoted to offering different services and information to students attending Kean. Located on first floor of the Administration Building, The Office of Financial Aid is open Monday through Saturday and offers phone hours Monday through Friday. Students can schedule an appointment, where they will have a chanceRead MoreEducation Is Valuable For The Citizens Of America Essay1219 Words   |  5 Pagesthere are about 20 million students enrolled in college, and the number is rapidly increasing. However, many families and individuals are not able to pay the steep price needed to enter the education system. In the recent decade (2000 – 2009), student loans in America have more than quadrupl ed, going from $149 billion to $630 billion. There are currently two options for students to finance their education, the Federal Family Education Loan (FFEL), which guarantees loans from private lenders, andRead MoreLoan Repayment And Debt Under Control1266 Words   |  6 Pagesyour student loans, these tips will help you keep your student loan debt under control. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you re having trouble finding a job or keeping up with your payments, there s important information here for you, too. 1. Know Your Loans: It s important to keep track of the lender, balance, and repayment status for each of your student loans. These details determine your options for loanRead MoreNational Student Loan Data System1491 Words   |  6 Pagescalled Program Integrity: Gainful Employment (GE) was established when concerns were raised about the amount owed on student loan debt. This single ruling will permanently close several hundred programs and lower the options of educational choices for non-traditional students. The American taxpayer dollar is funding the education of low income students in the form of Federal Pell Grants and Federal Direct Student Loans. The federal government has the responsibility of funding those student loans. TheRead MorePublic Service Loan Forgiveness ( Pslf ) Essay1553 Words   |  7 PagesAs of today Americans are facing a outstanding debt of 1.3 trillion dollars in student loans alone and it s up to 43 billion students to pay all of that back in full. Our most recent graduating Class of 2016 student is coming out of college owing an average of $37, 172 in loans, making an increase of 6% since 2015. Which is significant amount of growth to have within such a short period of time. Many of these students are unable to make their monthly payments whether it be because of the tremendouslyRead MoreEssay On The Cost Of Higher Education963 Words   |  4 Pagesto students. The U. S. Department of Education’s website provided resources and information on the different types of financial aid that the federal government provided. This paper discussed the availability of loans to students, repayment plans, accessibility of the application process, support for applicants with questions or concerns, ease of information retrieval, and how institutional financial aid budget directors might maximize access to funds for students. Loans Available to Students OneRead MoreFinding The Lowest Student Loans Consolidation Program1536 Words   |  7 PagesFinding the lowest student loans consolidation program is very important as this will decide your financial future. You should take this process very seriously and find out ways to search for the loan consolidation program that imposes lowest charges and interest rates. This will not only save you a lot of money but also help you lead a better life where you can pay attention to other necessities and luxuries of your life too. When a person is deep down in debt he does not think anything else unlessRead MoreLoan Of Student Loan Consolidation767 Words   |  4 PagesStudent Loan Consolidation May Be The Response To Your Financial obligation Concern With this, the loans stay overdue for 270 days or end up being 270 days past due at any time, leading the loans to default condition. Federal student loans are more beneficial compared to personal student loans. The interests on federal loans are tax-deductible and on certain kinds of service, the student loan might be forgiven. In consolidating your student financial obligation, it is suggested not to blend theRead MoreEssay on Student Loan Debt Should be Forgiven1256 Words   |  6 PagesDoes the amount of student loan debt have an effect on the economy? If so would forgiving student loan debt help lower the national debt or would it just increase it? According to Mary Claire Fischer, a writer for Kiplinger’s Personal Finance magazine, â€Å"two-thirds of students who receive bachelor’s degrees leave college with an average debt of twenty-six thousand dollars† (Fischer). This means that the average student debt has doubled since 2007 (Ross 24). The total student loan debt is $1.2 trillionRead MorePublic Service Student Loan Forgiveness805 Words   |  4 PagesTopic: Public Service Student Loan Forgiveness In our September 2016 blog post, we highlighted the various options for funding college education, including student loans. If you have already graduated from college and have outstanding student loan debt, you may be wondering what your options are for reducing what can sometimes be a significant burden. For individuals working in the public service sector, there is a student loan forgiveness program that may help. The Public Service Loan Forgiveness (PSLF)

Position As A Writer By John Edgar Wideman - 1211 Words

Position As a Writer John Edgar Wideman begins his piece, Our Time, with a description of the world he grew up in. He takes the reader through the story of his brother, Robby, using a variety of voices and points of view. In this narration of his brother’s life he brings to light his own dilemma with writing the piece. He uses a variety of voices and points of view to demonstrate the different perspectives of Robby s story. To contest the ethical dilemma of telling someone else’s story without exploiting it, Wideman addresses the issue head on. By reading Our Time, a writer could learn much from Wideman, and adopt a number of his methods for different writing styles. One of Wideman’s main writing methods is his use of multiple voices and points of view. This becomes apparent even in the first page of the text. Wideman introduces his essay with a letter. It is not addressed to anyone, neither is it signed, but, it is written as if every character in his story was speaking. The tone is his own, the subject is his brother, Robby, and parts of the letter reveal advise from Garth and his mother. This presentation of a multi-narrative style is present throughout the essay. It gives the reader a sense of authenticity that cannot be achieved through third person narration because it places the audience in the mindset of the person speaking. By switching points of view, Wideman is providing the reader with multiple perceptions of a scenario, giving a different lens of analysisShow MoreRelatedFinding Place : East Liberty Essay1915 Words   |  8 Pageshousing for its residents. Decades later, this neighborhood’s prosperity declined as resid ents began fleeing to other areas and businesses were forced to shut down. This left East Liberty in diminished conditions, like the conditions depicted in John Edgar Wideman’s story of Homewood in Our Time. Urban renewal efforts were quickly adopted for East Liberty, but these efforts failed. Today, the area is in a state of continuous revitalization, which is beneficial for the economy and some citizens,

Love Suicide of Amijima free essay sample

Choose one or two character(s), and describe how the ideas affect the ways in which he or she acts, speaks. The ideas of Confucianism and Buddhism are highly conveyed in the play, The Love Suicides of Amijima. Within the play, these two religions both influenced a lot of the characters’ actions and conversations, especially Jihei’s and Koharu’s. Buddhism provided the religious background to these characters and Confucianism, with its emphasis on responsibilities, provided the ethical basis. Confucianism strongly stresses in the fulfillment of responsibilities by the roles in society, whether husband to wife or woman to woman. This particular teaching was the ultimate basis for the plot and conflict in The Love Suicides of Amijima. In this play, the duties as a husband and father and as a woman to another woman are illustrated and strongly affected the characters’ decisions or lack of decisions. The general outline of the story is a love triangle; Jihei, a married man falls in love with a prostitute, Koharu, is unable to â€Å"ransom† her (buy her contract from the owner), and eventually commits suicide together. We will write a custom essay sample on Love Suicide of Amijima or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Jihei’s final decision of death was based on his inability to choose between his obligation as a husband and father to Osan and his children, and his love for Koharu. Making his decision even harder was the nobility both women had towards each other; Koharu agrees to give up her love to save Jihei for Osan and Osan agrees to pawn even her own clothing to pay ransom for Koharu to save Koharu’s life. Unable to have both women, Jihei’s suicide was the only way he could deal with losing one. Without his Confucius sense of obligation to Osan, there would be no predicament and no touching story of a love suicide. Buddhism was the overall veil that all the characters in the play were under. There were many instances where this religion was mentioned to reveal every character’s belief or acknowledgement of it. One instance was when Magoremon and Aunt came to the home and shop of Jihei to ask if Jihei was the person paying for Koharu’s ransom after just ten days from breaking p with her. After Jihei denies, they asked Jihei to a signed oath to prove this to Gozaemon. Jihei proceeded to agree and say, â€Å"If I should lie, I may Bonten and Taishaku above (considered protective deities of the Buddhist Law), and the Four Great Kings (The four Deva kings served under Taishaku and were also protectors of Buddhism) below afflict me! † From this statement, we can see that all these characters regarded Buddhist protectors as figures of great power to punish, otherwise the oath would be meaningless. The actions and words of last scene in the play, Act Three: Scene Three: Amijima, demonstrate a great deal of Confucius ethics and Buddhist beliefs. Jihei and Koharu both chose death because of their Buddhist belief that they will continue in an afterlife together, reborn to live in a less complicated situation than what their life is now. Before actually committing suicide, Jihei and Koharu both did things to try to compensate for the failure in their moral responsibility to Osan. They decided to die in a different place and by a different method so Osan would not be offended when their bodies were found. Jihei does this because of the guilt he has from the neglect of his husbandly duties to her after his death. Koharu does this because of her breaking of the promise she wrote to Osan; promising to spare her husband’s life and end Koharu’s relationship with him. In addition, Jihei and Koharu both cut their hair to symbolize their initiation to becoming a priest and nun meaning to fundamentally relieved them from their obligations to Osan. Both of these acts exemplify their respect for the Confucius teachings of roles and their particular duties. Adjacent to Jihei’s and Koharu’s Confucius accordance is their Buddhist beliefs, which also have propel them to commit the act of placing their bodies away from one another. They both believed that the body was just a vessel for the soul and that the soul would be twined together, regardless of the state of the physical bodies, into the afterlife. On page 205, Jihei says, â€Å"Our bodies are made of earth, water, fire, and wind, and when we die they revert to emptiness. But our souls will not decay, no matter how often reborn. Furthermore, after the death of Koharu, Jihei arranges her body in a manner that Shakyamuni Buddha has chose when he died, to probably help in her salvation in the afterlife. Then to help his own salvation in the afterlife, he says with his last breath, â€Å"Hail Amida Buddha. † All of these acts and words from the characters Jihei and Koharu, especially, demonstrate how Confucius and Buddhist ideas influenced them. Without these ideas in the background and as their moral backbone, there would be no story because there would be no dilemma.

Capital vs Liquidity free essay sample

In the context of the events of the last few years just how important is liquidity to the survival and well-being of Financial Institutions? Some believe it has a greater influence on events than Capital! Discuss. (In this assignment you need to outline the role of liquidity, issues arising when liquidity is scarce and compare the role of liquidity to that of Capital but most importantly give your own view on these matters) Role of Liquidity Liquidity can be defined as 1) the ability of a business to meet obligations without disposing of its fixed assets or 2) the degree to which assets of a company can be easily converted into cash. The evolution of banking has seen their balance sheet composition change. The model changed from one of borrowing at low rates and lending high rates with little interest rate or liquidity risk to one where borrowing in the short end and lending in longer maturities. This change created both interest rate risk and liquidity risk. [pic] Figure 1 Liquidity Gap In the early model a 1 month loan at 8% is matched by a 1 month deposit at 5%. The margin is locked in at 3%. The only risk to the bank is credit risk, i. e. that the loan gets repaid. In the modern scenario we have a 150 day loan at 6% funded by a 7 day deposit at 1%. In this example we have credit risk, interest rate risk and liquidity risk. This model facilitates greater margin as it is generally cheaper to borrow in the short term and higher rates available if lending in the longer term. The risks are that in 7 days, where will the borrowing rate be (rate risk) and will the bank be able to borrow (liquidity risk)? The hedging of interest rate risk has been made much easier with the evelopment of interest rate swaps and other derivative items. As these are off balance sheet products, they do not provide liquidity and so the modern model is very susceptible to any problems with liquidity. The interbank cash market is quite sophisticated. International banks can trade with each other very efficiently using many products. †¢ Straight loans and deposits, si mple products of fixed term from overnight up to 1 year. Usually not guaranteed. †¢ Bond repurchase agreements (repos), banks borrow cash and pledge a bond as security against the loan. More secure for the lender than loans and therefore cheaper for the borrower. †¢ Foreign exchange forwards, involves the exchange of one currency for another for a fixed term. These are cleared centrally and will have a small element of credit risk. These are useful if an organisation is able to access one currency and unable to source another, e. g. the US dollar funding requirements of Irish Banks. †¢ Commercial Paper (CP) and Certificates of Deposit (CD’s) are similar to a cash loans but it can be sold on in the secondary market. This makes them more liquid. All of the above are used to â€Å"square up† a bank’s books on a daily basis. Also banks run gap analysis to reconcile any funding mismatches and close off those gaps if required. This is called liability management. The funding situation would generally have been very fluid. For example, CD’s issued on the day or a large corporate withdrawing a sizeable deposit. The interbank market was the place to lend your excess cash or borrow your shortage and it functioned effectively. This post World War II move to asset driven balance sheets has led to increased focus on liability management. This, aligned with disintermediation, where large corporates bypassed traditional banking methods, led to more innovation in the banking industry. Medium Term Notes (MTNs) and asset securitisation are longer term funding solutions that became more popular in recent times. MTNs can be senior or subordinated debt and are quite flexible for issuer and investor. They usually are for 3 to five years and some may have embedded options. They can have fixed or floating rates and trade on the secondary market. Securitisation involves the packaging of assets into a bond and selling them with the underlying assets as security on the bonds. Typical assets that can be sold this way are mortgages, credit card debt, car loans or student debt. This model was used by Northern Rock (NR) in the UK where they originated mortgages that were then securitised. This enabled them to â€Å"churn† their balance sheet and issue more mortgages. There was an inherent liquidity risk run by NR with this model as their funding was not diversified sufficiently aligned with a failure to realise that market conditions for mortgage backed securities (MBS) would deteriorate in stressed markets. Between issuing a mortgage and securitising it, there will always be a time lag and to cover that NR relied on wholesale interbank funding in the short dates (up to 3 months). This source quickly disappeared as banks pulled any limits. The building society had then to go to their lender of last resort, the Bank of England, and with that news hitting the headlines, ordinary depositors queued up outside branches to get their own money out. This was the first run on a UK bank in 150 years. Eventually NR was taken over by the state. In the context of this case it’s interesting to note that the run was caused by what I would consider â€Å"over-transparency†. The Bank of England had a rule that obliged them to publish the names of institutions that used its liquidity support facility and allied with a lack of satisfactory deposit insurance their depositors took their money and ran. Maybe the rule is not so suitable in these conditions. When Liquidity is Scarce The current crisis we are in the midst of now began in 2007 when sub-prime mortgage bonds became problematic. As well as a regular market for these bonds, a Credit Default Swap (CDS) market also developed. CDS are a derivative that transfers the credit risk of an underlying security, effectively insurance against default. If you bought a bond and also a CDS on that bond, theoretically, you are hedged). The result was that the sub-prime problem had ramifications worldwide. Which banks held sub-prime debt, which institutions had written CDS on s ub-prime debt? Banks may not have any exposure to sub-prime but may well have exposure to banks that had. The international money market was tied together in this crisis. There was a serious lack of transparency of each bank. You couldn’t analyse it latest financial statements and ascertain any given level of risk in a particular area. Money market funds in the US, lenders of cash in the short dates, retrenched. They put their cash into short dated government debt and avoided the interbank market which then froze. There was no liquidity in the market. Confidence was quickly disappearing and if the interbank market loses confidence in an institution, credit lines will be withdrawn, and liquidity will quickly become a major problem. Chart 1 below shows the spread between 3month Euribor* and 3 month Eonia**. In normal functioning markets, these rates should be very similar. They are a measure of the price of liquidity in the markets. As can be seen the correlation is close up to mid ’07. [pic] Chart 1. However in stressed markets you can see what happens. In August ’07 sub-prime became an issue and then again in Sep ’08 when Lehman Brothers failed and once again this summer when the Greek debt crisis began to escalate. The liquidity in European interbank markets was drying up. The above graph represents the â€Å"LIBOR-Eonia† spread and is widely traded in markets now as a hedge against liquidity a crunch. In Ireland in Sept ’08, with the increasing uncertainty of Anglo Irish Banks exposure to the commercial property market, the Irish government has to step in and issue a blanket guarantee on all Irish banks liabilities. [pic] Source Central bank of Ireland. Credit Money Banking Statistics Chart 2. Initially, money flowed into the covered institutions but, as time progressed, the deposits in the Irish banking system left. Chart 2 above shows the more striking movements. I have isolated non-resident deposits. These have fallen by 63% since Oct ’08. Also I have highlighted Irish banks issuance. This falloff shows that the money markets are closed to Irish banks. The modern banks liquidity risk of borrowing short and lending long was crystallizing. Ireland Inc. was losing liabilities. Our loan-to-deposit ratios were deteriorating. Deposit holders moved funds into the AAA rated Rabodirect or elsewhere. Bondholders moved into safer havens such as UK gilts and German Bunds. Further assistance was required for the banks. Central bank intervention began. The ECB began long term refinancing operations (LTRO) where banks could avail of up to 1year cash at the ECB average rate. To avail of the LTRO suitable collateral was required. The Central Bank of Ireland (CBI) assisted with emergency liquidity assistance (ELA) when collateral was ineligible for the ECB. Interestingly the CBI would have take massive haircuts on the collateral which was ineligible for ECB, up to 75%, this would put a lot of pressure on deposit gathering resources. This pressure can be seen in the rates Irish banks are paying for deposits currently. Pressure was increasing for banks to rebuild balance sheets and as the ability to acquire liabilities was extremely limited, they began to reduce assets. These disposals took place in distressed and illiquid markets. Efficient markets did not now exist. The management of liquidity was quickly becoming a one-stop shop, the ECB. Liquidity regulations are largely as a result of the recent liquidity crisis. The prudential liquidity assessment review (PLAR) was introduced by the CBI. This has guidelines consistent with Basel III and other relevant measures of high quality funding. These guidelines will require banks to hold large liquidity buffers mainly of cash and highly rated government debt. The measures on Basel III are primarily the liquidity coverage ratio (LCR 2015) and the net stable funding requirement (NFSR 2018). What levels of liquidity required will be based on stress testing the liquidity profile based on a number of stressed liquidity events. LCR covers short term liquidity stresses and will require high quality unencumbered assets. The NFSR covers a stressed period of a year long and would apply haircuts to all asset classes. This liquidity buffer will come at a cost. Holding low yielding government debt and cash incurs opportunity cost. This cost will be allocated on to the business areas in banks that have generated the assets and will eventually lead to higher cost of funds to the borrower. Also there is the developing situation where the availability of high quality bonds may not meet banks liquidity requirements. The Role of Capital Capital is a company’s net assets including all retained earnings and reserves such as loan loss reserves and can be viewed as an organisations’ strength. Capital should be available for any potential losses a bank may incur. There has been a lot of focus on bank capital from Basel I back in the eighties up to Basel III and the EU’s Capital Requirement Directive (CRD IV), which is currently being implemented. Initially capital ratios were focused on Japanese banks that grew to be the biggest in the world. They did so with very low capital bases (approx 2%). The western world viewed this as inequitable and so Basel I was introduced. Basel I introduced the Cooke ratio that defined capital as equity, retained earnings and convertible bonds (hybrids). It also outlined the weightings assigned to loans to calculate capital requirements. Loans to corporates 100% weighting, loans to banks 20% and sovereigns 0% and it set a capital level of 8% of the weighted assets. [pic] The McDonough Ratio was developed in Basel II and refined its predecessor to include new financial instruments used to manage risk in banks. The latest initiatives focus on the appropriate level of capital required for a given level of risk under certain stressed scenarios. Known as regulatory capital, it is difficult to calculate and we can see many examples of this over the recent past. The question I would ask in trying to come up with an appropriate level of capital is â€Å"What are your future losses going to be? † Is this a ridiculous question? The European Banking Authority, in its first two stress tests couldn’t figure it out. Ireland’s two pillar banks passed the first test in July 2010 and Dexia passed in July 2011 (core tier 1 ratio of 10. 4%) only for all to be nationalised soon after. I think the latest stress tests may be getting closer but the current market uncertainties just magnify the problem. What capital will BNP Paribas, holder of â‚ ¬5bn of Greek Bonds, need with Greece government debt receiving a 50% haircut? What will it need if Greece defaults? I can understand the difficulties for the authorities. Also the banking industry is slow to get to the required level. Basel III has a core tier 1 ratio of 10. % but the target date is 2019. What level is enough and could this level be too much? Models using Value at Risk measures will be using data from the most volatile period in history. Could they be overestimating? Capital comes at a cost. Investors require a return and too much capital could lead to slower or more expensive lending which will lead to lower growth and lower profits a nd erosion of share values. Conclusion In this crisis liquidity has been a massive issue. Capital levels have been hot topics for many years but the effects of this credit crunch has highlighted the importance of proper liquidity provisions. If PLAR had been in place for the last 10 years, would the Irish banks have gotten themselves into this position? Not in my opinion. It certainly would have focused the mind on how liquid our booming commercial and residential property portfolios were. It is, however, debatable whether any shock factors to account for the sudden change in Irish banks books would have been incorporated in the risk models used to assess potential liquidity shortages. Banks dependence on short term wholesale funding was a critical fault. There is no doubt that the relevant authorities worldwide did not recognise the risk. Basel III provides for it by 2019! The European Central Bank is not even a lender of last resort for European banks. It is breaking treaty rules currently with its buying of peripheral government bonds. The liquidity issue can also put pressure on perfectly good entities. Unfortunately we now have a situation where disposal of assets in this stressed environment is required to build up required capital and liquidity buffers. Discounts being applied are serious and it is creating a vicious circle of selling assets to create capital while eroding capital as assets are sold cheaper than could be expected. Perhaps the markets were operating too perfectly for too long. Short term wholesale funding was plentiful for a long time and banks got used to it. It made the carry trade (lending long and borrowing short) easy. However as Warren Buffet famously remarked, â€Å"only when the tide goes out, do you learn who has been swimming naked†. However liquidity problems are like smoke and capital problems are the fire. If concerns over a banks’ liquidity arise, it is primarily because there is concern over its capital or its ability to meet any losses.