Finance – Erins Rays http://erinsrays.com/ Thu, 04 Nov 2021 14:38:06 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://erinsrays.com/wp-content/uploads/2021/03/cropped-icon-32x32.png Finance – Erins Rays http://erinsrays.com/ 32 32 Credit restructuring: Overhaul of individual credits due to coronavirus: Who, how and when https://erinsrays.com/credit-restructuring-overhaul-of-individual-credits-due-to-coronavirus-who-how-and-when/ Tue, 09 Mar 2021 10:57:41 +0000 https://erinsrays.com/credit-restructuring-overhaul-of-individual-credits-due-to-coronavirus-who-how-and-when/ The Reserve Bank of India (RBI) has issued guidelines for the overhaul or resolution of loans taken out by individual borrowers facing financial hardship due to the coronavirus pandemic. Banks should formulate their own policies for overhauling these loans based on these guidelines. The guidelines specify what types of personal loans are covered and the […]]]>
The Reserve Bank of India (RBI) has issued guidelines for the overhaul or resolution of loans taken out by individual borrowers facing financial hardship due to the coronavirus pandemic. Banks should formulate their own policies for overhauling these loans based on these guidelines. The guidelines specify what types of personal loans are covered and the types of resolution plans that may be offered to borrowers by banks.

  1. Which individual loans are eligible for such an overhaul?
    The guidelines clarified that banks can propose an overhaul of all personal loans, that is to say loans granted to individuals and consisting of (a) consumer loans, (b) student loans , (c) loans granted for the creation / improvement of real estate assets (e.g. housing, etc.), and (d) loans granted for investment in financial assets (stocks, bonds, etc. ). In addition, consumer credit includes loans to individuals, which consist of (a) loans for durable consumer goods, (b) credit card receivables, (c) auto loans (other than loans for commercial use), (d) personal loans secured by gold, gold jewelry, real estate, term deposits (including FCNR (B)), stocks and bonds, etc. , (other than for business / business purposes), (e) personal loans to business (excluding loans for business purposes), and (f) loans for other consumption purposes (for example, social ceremonies, etc.).
  2. Which individual borrowers will be eligible for the loan redesign?
    In accordance with RBI guidelines, only accounts of individual borrowers will be eligible for resolution under this framework that have been classified as standard, but not in default for more than 30 days with the lending institution as of March 1. 2020. In addition, the eligible borrower accounts should continue to be classified as standard until the date of invocation of the resolution (ie the date on which the resolution plans come into effect) in this context. To this end, the invocation date is the date on which the borrower and the credit institution have agreed to implement a resolution plan in this context. In addition, the guidelines state that credit institutions must develop Council-approved policies regarding the implementation of viable resolution plans for eligible borrowers under this framework, ensuring that resolution under this facility is provided. only to borrowers stressed due to Covid19. The policy approved by the board of directors details, among other things, the eligibility of borrowers with respect to which credit institutions may be willing to consider the resolution, and defines the due diligence considerations to be followed by credit institutions. to establish the need to implement a resolution plan with respect to the borrower concerned.
  3. What are the deadlines for this resolution plan?
    The guidelines also specify that resolution under the loan restructuring framework can be invoked no later than December 31, 2020 and must be implemented within 90 days of the invocation date. However, credit institutions should endeavor to use it quickly. Thus, if the date of invoking the resolution is December 1, 2020, then the resolution plan must be implemented before February 28, 2021, specify the guidelines.
  4. What are the loan redesign options that your bank can offer you?
    In accordance with the guidelines, resolution plans offered by a bank to an individual borrower may include rescheduling payments, converting any accrued or accrued interest into another credit facility, or granting a moratorium, on the basis for an assessment of the borrower’s income streams, subject to a maximum of two years. As a result, the overall tenor of the loan may also be changed accordingly. The moratorium period, if granted, will come into effect upon implementation of the resolution plan.
  5. Other conditions to be fulfilled
    However, the resolution plan is only deemed to be implemented if all of the following conditions are met: a. all related documentation, including the execution of the necessary agreements between the credit institutions and the borrower and the guarantees provided, if any, are completed by the lenders concerned in accordance with the resolution plan implemented; b. changes in loan conditions are duly reflected in the books of credit institutions; and C. the borrower is not in default with the lending institution under the revised terms. Any resolution plan implemented in violation of the timetable stipulated above will be fully governed by the prudential framework or the relevant instructions applicable to a specific category of credit institutions for which the prudential framework is not applicable.


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Get a student loan before the end of 2020 https://erinsrays.com/get-a-student-loan-before-the-end-of-2020/ Tue, 09 Mar 2021 10:57:41 +0000 https://erinsrays.com/get-a-student-loan-before-the-end-of-2020/ Talks about canceling student loans have borrowers eagerly awaiting 2021. But many have already benefited from unprecedented events in 2020: – An administrative forbearance has suspended most interest-free federal loan payments since March. – Forbearance also halted collections on overdue loans. – Interest rates have fallen to historic lows. It is not known how long […]]]>

Talks about canceling student loans have borrowers eagerly awaiting 2021. But many have already benefited from unprecedented events in 2020:

– An administrative forbearance has suspended most interest-free federal loan payments since March.

– Forbearance also halted collections on overdue loans.

– Interest rates have fallen to historic lows.

It is not known how long these breaks will last. If you’re financially healthy, here’s how to enjoy it while you can.

MAKE A LUMP-SUM PAYMENT

The current forbearance on student loans is expected to end on January 31. All borrowers should have a repayment plan by then.

If you are able to pay your pre-pandemic payment amount, consider putting more money into your loans now.

Student loan payments must first cover the unpaid interest. But with those fees suspended since March, a lump sum payment would put a direct dent in what you owe.

“Overall, the majority of students will not have any sort of accrued interest,” says Stacey MacPhetres, senior director of education funding at Bright Horizons, which provides workplace employee services including educational advice.

An exception could be recent university graduates whose loans have not yet been repaid. These could have several years of accrued interest.

For example, suppose you took out $ 5,500 in unsubsidized loans at 4% interest in the first year. Four years later, these loans could have accumulated nearly $ 900 in interest to add to your principal balance at the end of your grace period. Paying off that interest before that date will prevent future interest from growing on a larger balance and pay less overall.

MacPhetres says the “fervor” around forgiveness has made some borrowers balk at additional payments. But there is no guarantee that the debt will be canceled.

“Unless something happens, you will be expected to resume the repayment,” she says.

If your payments will be too expensive, contact your maintenance agent for options such as income based reimbursement.

EXIT FROM THE FAULT

Failure to pay federal student loans has consequences such as wage garnishment and loss of tax refunds and Social Security payments. These actions are also expected to resume in February.

To avoid collection activity, deal with delinquent loans as soon as possible. To do this, you have two main options: consolidation and rehabilitation.

Federal student loan consolidation can pay off your delinquent loan and replace it with a new one. This can quickly correct a default if you choose an income-driven plan for your new loan.

“If the borrower thinks they might be subject to Social Security compensation or tax compensation, speed may matter,” says Persis Yu, director of the National Consumer Law Student Loan Borrower Assistance Project. Non-profit center.

Rehabilitation takes at least nine months of on-time payments and puts your delinquent loan back into good standing. This removes the default from your credit report, but not the late payments that led to it.

The months spent in the current administrative abstention count towards rehabilitation. If that hiatus is extended until September, as some lawmakers have proposed, it could cover the entire rehabilitation process if you sign up by the end of 2020.

With the two options, Yu says to ask himself, “Is now a good time to take this step?” ”

It won’t if you can’t afford to pay and you default again. An income-driven plan might help, but Yu says these payments aren’t always affordable. A tool like the Department of Education’s Loan Calculator can help you estimate potential costs.

PRIVATE REFINANCING LOANS

Refinancing replaces your student loans with a new loan from a private lender. Do not refinance federal loans until it is clear whether the administrative forbearance will be extended.

But private student loans do not qualify for this benefit, and refinancing them could save you money.

“With interest rates so low, most private student loan borrowers are able to reduce this interest rate quite significantly,” says Jared Andreoli, chartered financial planner and president of Simplicity Financial in Milwaukee.

For example, refinancing a $ 10,000 private loan from 10% to 5% interest would reduce your monthly payment by $ 26 and save you $ 3,130 in total, assuming a 10-year repayment plan.

You will need a FICO credit score of at least 600 and a stable income to be eligible for refinancing. Refinance private loans as soon as you, or a co-signer, meets these conditions.

While the Federal Reserve has indicated that interest rates will remain low, Andreoli says that does not mean that refinancing rates will continue to fall.

“If people expect a lower rate,” he says, “now is the time to act. “

This article was provided to The Associated Press by the NerdWallet personal finance website. Ryan Lane is a writer at NerdWallet. Email: rlane@nerdwallet.com. Twitter: @ryanhlane.

RELATED LINKS:

NerdWallet: Student Loan Repayment Calculator https://bit.ly/nerdwallet-student-loan-calculator

Student Loans Officer Contact Information https://studentaid.gov/app/additionalInformation.action

Department of Education Loan Simulator https://studentaid.gov/loan-simulator/

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How to “find” the money to maximize RRSPs https://erinsrays.com/how-to-find-the-money-to-maximize-rrsps/ Tue, 09 Mar 2021 10:57:40 +0000 https://erinsrays.com/how-to-find-the-money-to-maximize-rrsps/ Each year, as the Registered Retirement Savings Plan (RRSP) contribution deadline approaches – March 1, 2021, in case you missed it – Canadians scramble to raise enough funds to contribute to their retirement savings. An RRSP is a tax-deferred retirement savings vehicle in which to save money. The amount of annual RRSP contribution room is […]]]>

Each year, as the Registered Retirement Savings Plan (RRSP) contribution deadline approaches – March 1, 2021, in case you missed it – Canadians scramble to raise enough funds to contribute to their retirement savings. An RRSP is a tax-deferred retirement savings vehicle in which to save money. The amount of annual RRSP contribution room is determined by your total earned income for the previous year. For example, the RRSP limit for the 2020 tax year is 18% of your gross income for 2019, or $ 27,230, The smallest.

The problem is to own high levels of debt to income, average Canadian households are not able to save enough to maximize their RRSPs. However, there are some strategies that Canadians can use to contribute more to an RRSP than they think possible.

1. Save automatically
There’s no better way to save than to set up automatic savings plans, says Lisa Elle, chartered financial planner based in Cochrane, Alta., And author of STRUT: How to eliminate the financial advantages of sexy shoes. “Set it up and forget it,” she said. “It becomes another automated invoice leading to forced savings and [helps] reinforce good habits.

Morningstar behavioral economist Samantha Lamas agrees, saying the best way to save money wrong is to set up automatic withdrawals. “Set up an automatic transfer from your current account to your savings account. Better yet, make sure you have the payment transfer as soon as you receive your paycheck, so you hardly feel the “loss”. To go further, create a structure where the amount transferred automatically increases after a certain time, ”she recommends.

Monthly dues divide a larger amount into smaller, more manageable portions and reduce the stress of producing a big hit at the end of the year. If you save monthly and invest regularly, so much the better.

“If you are in the top marginal tax bracket, this is one of the few tax deductions available to you,” Elle argues.

2. Emergency fund – To save money !
She recommends that you have an emergency savings account and contribute regularly. This way, Canadians can have funds available for emergencies without having to dip into their RRSPs, which could have tax consequences. Better yet, at the end of each year, any unused amount could be contributed to your RRSP.

“You can have a lot of excess money that can be better used to lower your tax bill this year, and then you can replenish the emergency fund throughout the year,” Elle explains.

3. Reinvest the tax return
The amount contributed to an RRSP is tax deductible. However, in this age of instant gratification and the YOLO (you only live once) mantra adopted by many Canadians, tax refunds often end up funding impulse shopping or beach vacations at the expense of income. future retirement plans.

She says one way to spice up your savings is to reinvest the tax refund in your RRSP. She explains the calculation using the example of a person in the top marginal tax bracket (around 40%) who puts $ 10,000 into their RRSP account each year and gets a tax refund of around $ 4,000. . “Because you know you’re getting that $ 4,000 tax refund, why not invest it in an RRSP,” she says. save.

“If you really want to buy that new toy or go on a trip, why not reinvest at least half of the tax refund. You will always get a big boost on your savings, ”Elle says.

4. Transfers from non-registered accounts
Don’t have real money to maximize your RRSP contribution? No problem. If you have investments in a non-registered savings plan, you can take advantage of in-kind asset transfers that transfer all of the securities in that account to your RRSP.

“It could be your stocks or your mutual funds, if you don’t want to sell them,” Elle explains. Upon such transfer, the account holder will receive an RRSP contribution receipt required to generate a tax refund. It’s important to note, however, that under Canadian tax rules, when shares are transferred to your RRSP, the transaction is considered a deemed disposition, which triggers capital gains tax even if you don’t. not actually liquidated these titles. However, Elle argues, “the RRSP deduction should help offset any transfer in kind from a non-registered account.”

There is also a way around the tax consequences of an in-kind transfer. If the transfer is made from your TFSA account, it “will have no tax impact on the transfer and you will still get your deduction for the amount contributed to the RRSP,” notes Elle. “We make sure that many clients first put money into their TFSAs throughout the year, and then we decide within the first 60 days of contributing exactly how much we want to transfer from the TFSA to the RRSP for. reduce their tax bill.

Of course, you have to make sure that they have enough TFSA and RRSP contribution room so that the CRA does not go after you for the overcontribution rules, which could be very costly.

If you choose to sell securities in your non-registered investment account and use the proceeds to redeem those securities in your RRSP, beware of the superficial loss rules. You will be denied a capital loss on your investment if you redeem the security within 30 days of selling it, even if you redeem it in an RRSP account. You must wait 30 days before redeeming the same security to claim a capital loss.

5. Borrow to invest?
Many readers ask us if they need to borrow to invest. This could be an attractive option for some, especially given today’s ultra-low interest rates. However, be careful.

Christine Benz, director of personal finance at Morningstar, warns that investors need to think carefully about what they can realistically earn from different types of investments. “In this case, there is a mismatch between a guaranteed bond (cost of borrowing) and return, which is uncertain regardless of where you invest unless you are in cash,” she says. “And with cash vehicles, you won’t come close to matching your borrowing costs.”

“Make sure you get it paid off as soon as possible, preferably with your tax refund,” Elle warns. The rationale is that the tax-sheltered growth of RRSP investments may exceed the cost of short-term borrowing.

Benz suggests thinking differently: “If you know that you have the money that you would use to pay off a loan each month, why not set up a regular investment plan and invest it each month instead?” Borrowing money to invest may be something that some sophisticated traders can engage in, but generally speaking, for small investors who manage their account, it adds risk, complexity, and cost – something that I do not recommended.

In conclusion, it is better to start planning your RRSP strategy for the next year as early as possible rather than waiting until the last moment, “because this is how you can really maximize your retirement savings and not end up with a big tax bill and no savings to be able to invest in your RRSP, ”says Elle.


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Your letters about the remission of civil service loans: NPR https://erinsrays.com/your-letters-about-the-remission-of-civil-service-loans-npr/ Tue, 09 Mar 2021 10:57:39 +0000 https://erinsrays.com/your-letters-about-the-remission-of-civil-service-loans-npr/ “Thank you,” writes Cara Christensen, a first-year teacher in Washington state who has read NPR Deep Dive in the troubled civil service loan forgiveness program (PSLF). The report, she says, “made me feel less alone.” We have received dozens of emails, tweets and Facebook comments from aggrieved borrowers responding to reports that in the past […]]]>
We're listening!

“Thank you,” writes Cara Christensen, a first-year teacher in Washington state who has read NPR Deep Dive in the troubled civil service loan forgiveness program (PSLF). The report, she says, “made me feel less alone.”

We have received dozens of emails, tweets and Facebook comments from aggrieved borrowers responding to reports that in the past year, 99% of requests for the popular loan cancellation program have been refused.

PSLF offers the loan forgiveness promise to nurses, teachers, first responders and other student borrowers who work in the public service for 10 years while meeting their loan payments. But it has been plagued by miscommunication from the US Department of Education and mismanaged by the service companies the department pays to manage its trillion-dollar student loan portfolio.

Many borrowers who have written in share eerily similar stories, making payments for years, while working in the public service, only to find that they are not yet eligible for the program due to a technical issue. Maybe they’re on the wrong repayment plan, or they have the wrong type of loan.

Colleen and Dan Burton, from New York, struggled with the two:

“My loans are of the wrong type,” writes Colleen, and “despite [Dan’s] Qualifying employment history, we were extremely disappointed at the time to learn that all of his previous payments (2007-2013) were ineligible because he was not in the right type of repayment plan. “

Dan’s story comes with a different twist. When he realized that switching to an appropriate repayment plan would require him to start the 10-year forgiveness path all over again, he simply chose to consolidate his loans, worth $ 13,000, and to move on. But, earlier this year, Congress created a emergency fund for public servants who, like Dan, were excluded from the PSLF because they were placed in the wrong repayment plan.

There’s only one catch, Colleen writes:

“We just learned of the existence of the temporarily expanded PSLF program, so we requested a reassessment. Dan’s case is the exact scenario they were supposed to try to rectify. He had several years of rejected payments due to the type of repayment plan. Now they’re rejecting his forgiveness again because his loans were consolidated. We consolidated BECAUSE he was rejected from forgiveness in 2014. If we somehow knew that ‘there would be this new opportunity, we would have made a different decision. … It clearly meets the standard of the spirit of the law’ but the ‘letter of the law’ makes it impossible to take advantage of the program. “

We also saw this on Twitter from Nathan Fried, who teaches in the biology department at Rutgers University-Camden.

“I’m one of the thousands of people trying to get answers,” writes Mary Leist of Ohio. She says her loan officer “miscalculated my qualifying payments over the past two years, telling me first that I had only made 8 qualifying payments, then 21, then they needed to” investigate further “my count after I complained several times, indicating that I was, in fact, closer to 60.”

Borrowers are expected to make 120 qualifying payments – for 10 years – before their loans can be canceled.

Last week, Leist said, she spoke with her service agent again, checking the status of her payment calculation, “and she was told it could take up to a year for them to respond to me. I don’t know what I was hoping for because by sharing this with you … maybe just the recognition that we are real people, not just rows on a spreadsheet. “

This is a common theme among ratings received by NPR: borrowers who have had their loan cancellation expectations dashed due to technical issues or poor communication from their service agent feel abandoned and helpless.

Ryan Coleman from Missouri wrote in an email:

“When I first asked for a review of how many qualifying payments I had made in the last 6-7 years of my public service career, I was told the number was only of 17 lol (so 1 year and 5 months of payments). Incredulous, I called and a lady explained that they had misapplied a payment some time ago and therefore subsequent payments weren’t factored into their initial review. She assured me that they would recalculate soon. It was probably two years ago. I called one a few times and I’m told it’s taking a while. “

Seattle’s Justin Davis goes on to give great advice – although, he admits, it didn’t help:

Finally, Erik Carlton of Tennessee writes that when he repeatedly asked his loan officer for help lowering his high monthly payments, no one mentioned that he was eligible for the loan forgiveness. civil service nor recommended an income-based repayment plan. Instead, he was forbidden.

It wasn’t until Carlton reached out to the public university where he now teaches that he learned the PSLF and quickly signed up. Although he says he worked in the public service for at least seven years, he made only 18 of the 120 payments needed to qualify for a loan forgiveness.

“My heart is broken and my heart is broken … My elder [child] is supposed to start college in three years, my next three years later, and our third only three years later. … I have never been arrested and I haven’t even had a speeding ticket in 20 years. I do not drink, do not smoke, do not play. I vote. I’m a teacher. I have been working and supporting myself since I was 16, and I have no idea how I am supposed to give my children a future. Because I can’t save for theirs. I can barely pay for their gift. “



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Who Benefits Most from University Debt Remission? https://erinsrays.com/who-benefits-most-from-university-debt-remission/ Tue, 09 Mar 2021 10:57:39 +0000 https://erinsrays.com/who-benefits-most-from-university-debt-remission/ Quote of the day: “I hate calling my loan provider every semester to get more funding. I hate to see the value of my unpaid debt go up like a lift, and if everything were to go away tomorrow, that would be great for me. But the day after America’s student debt was canceled, it […]]]>

Quote of the day:

“I hate calling my loan provider every semester to get more funding. I hate to see the value of my unpaid debt go up like a lift, and if everything were to go away tomorrow, that would be great for me. But the day after America’s student debt was canceled, it would start to pile up again and keep rising until the country got back to where it started. “

–Blake Grisham in cited in today’s Wall Street Journal

President-elect Joe Biden is considering some form of student loan cancellation. There are many ways to cancel a student loan. here are a few.

On Monday night, on Tucker Carlson, public policy authority Oren Cass posed the question (shall we say?) To $ 64,000 on student loan relief: why student loans? Are students more deserving of debt relief than, say, troubled parents paying off a car loan?

When Senator Bernie Sanders introduced a bill to write off all student debt in June, Cass tweeted:

Hypothesis: holders of student debt are, on average, less deserving or have less need of a transfer of wealth than the median American (who does not have a university degree).

It’s an interesting hypothesis.

If you worked hard and paid off your student loan debt, you might be reluctant to take on student loans from less conscientious people due to the inevitable tax hikes. Neal Bortz, Tweeter in June, admitted he was not thrilled with the prospect:

What do you think of seizing part of your income to pay off part of a huge student loan given to someone with a degree in gender studies? It feels good, doesn’t it?

President-elect Biden, alas, cannot wave a magic wand and make college loan debt go away. So, as Bortz points out, someone will have to pay higher taxes. When we talk about debt cancellation, we are really talking about shifting the burden onto someone else.

It is criminal that many young people, who may not be familiar with money management, are encouraged to take on a huge debt burden from an early age for college. I’m glad I grew up when college was cheaper.

If I had had a loan to repay, I would never have been able to do many of the things that enriched my life (like working at an alternative newspaper in New Orleans; I hardly did anything but it was hard work. happiness and excellent preparation for the rest of my professional life).

So, yes, college loans are holding back a lot of people and definitely preventing them from taking advantage of low-paying jobs that provide valuable experience. Perhaps there is an idea of ​​compromise that deserves at least to be considered?

Beth Akers, senior fellow at the Manhattan Institute and author of “The Loan Game: The Rhetoric and the Reality of Student Debt”, proposes a compromise: forgive the debt, but only a little. I don’t approve of the idea, but it’s intriguing.

First, Akers acknowledges that a large-scale pardon would primarily benefit the wealthy, perhaps to the detriment of the less wealthy. Akers writes:

Canceling a student loan can be an attractive idea, but it would make the privileged rich and leave behind – or maybe even drain money – the really needy. Gradual calls for President-elect Joe Biden to cancel student debt in his first 100 days in office should be ignored instead of a more moderate proposal: a debt capped at $ 5,000.

This smaller debt relief would actually benefit those who need help the most:

Workers with university degrees are the highest paid in the economy and the last to be made redundant in times of economic downturn. Of course, having debt is worse than not having debt. But because of the significant financial returns to post-secondary education, people with debt and graduates are often better off than those who have neither. It’s clear in the data: borrowers with the largest balances are the least likely to default. This is because they have often invested in professional or graduate degrees that lead to careers with high earning potential.

Borrowers who owe less than $ 5,000 are most likely to default. Many in this category have started a degree but did not complete it, and therefore do not benefit from the higher earnings offered by a degree.

Debt relief of $ 5,000 would hit those people, and it could be done in a creative way: “a $ 5,000 student loan jubilee in the form of a one-time tax credit.” Akers explains:

This would ensure that most borrowers who are truly up a stream can escape debt and get on with their lives. And such a proposal would give the government the time, and perhaps the political leeway, to pass legislation that would streamline existing student loan repayment programs and ensure that distressed borrowers with large eligible balances have the opportunity. time to register. Washington could even expand these programs to require borrowers to pay a smaller fraction of their monthly income to repay the loan or allow debt cancellation sooner. At least these changes would ensure that dollars spent on loan relief get to those who need it most.

More than half of Americans have built their lives and made ends meet without a college degree. Call universal student loan cancellation what it is: elitist.

There’s another reason forgiveness won’t solve the problem: it’s myopic.

We should find ways to end the ruinous college loan. We need to find a way to match college costs to market forces, and we need to recognize the value of jobs that don’t require a four-year college degree. In this way, fewer people who are unlikely to complete their university education will be incentivized to take out loans that will outlast their university careers.

Blake Grisham, a finance student at the University of Saint Louis who struggles with his own growing debt, summed up the problem: He despises his student loan debt, but, if that debt were canceled tomorrow, here’s what would happen:

[T]The day after America’s student debt was canceled, it would start to pile up again and keep rising until the country got back to where it started.

The root of the problem is that colleges keep raising their prices. This makes higher education inaccessible to low- and middle-income students, unless they take out larger and larger loans. If Joe Biden is serious about helping, his administration should regulate the cost of higher education, capping it significantly below current levels. No doubt it would upset college presidents, but does Mr. Biden want a solution or a band-aid? The choice is hers.

Uh-oh. The last thing colleges need is more government intervention in the form of regulation. How about a small free market?



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China approves $ 1 billion loan for Sri Lanka highway – Office of the Prime Minister of Sri Lanka https://erinsrays.com/china-approves-1-billion-loan-for-sri-lanka-highway-office-of-the-prime-minister-of-sri-lanka/ Tue, 09 Mar 2021 10:57:38 +0000 https://erinsrays.com/china-approves-1-billion-loan-for-sri-lanka-highway-office-of-the-prime-minister-of-sri-lanka/ COLOMBO, May 14 (Reuters) – The Chinese government has approved a billion dollar loan to Sri Lanka for the construction of a highway and its import-export bank has been tasked with processing the loan, said Sri Lankan Prime Minister Ranil Wickremesinghe’s office Monday. It will be one of the biggest projects undertaken by China in […]]]>

COLOMBO, May 14 (Reuters) – The Chinese government has approved a billion dollar loan to Sri Lanka for the construction of a highway and its import-export bank has been tasked with processing the loan, said Sri Lankan Prime Minister Ranil Wickremesinghe’s office Monday.

It will be one of the biggest projects undertaken by China in this island country, which supports the Chinese Belt and Road Initiative (BRI).

The prime minister’s office said that Cheng Xueyuan, Chinese ambassador to Sri Lanka, had met with Wickremesinghe and announced the “good news” of the Chinese government approving funding for the construction of the first phase of the central highway.

“The ambassador asked the Sri Lankan side to speed up administrative and legal formalities,” the prime minister’s office said in a statement.

Xueyuan’s meeting with the Prime Minister comes three days after his meeting with President Maithripala Sirisena.

“The president stressed that Sri Lanka strongly supports the Belt and Road initiative and attaches great importance to the joint megaprojects of the port city of Colombo as well as the port and industrial park of Hambantota,” said on Saturday. a press release from the Chinese Embassy.

He also said that instructions have been given to relevant government departments by the president’s office to speed up the resolution of specific issues and make solid progress in the projects.

Many Chinese projects, including the $ 1.4 billion port city recovery deal, were put on hold soon after President Sirisena took office in January 2015, citing incorrect procedures by the previous government in the middle allegations of corruption.

However, the port city project was allowed to resume after a delay of almost two years following further environmental impact assessments. The Sri Lankan government then leased a Chinese-built deep-water port in southern Hambantota for $ 1.12 billion on a 99-year lease amid the growing debt crisis. (Reporting by Shihar Aneez; Editing by Toby Chopra)


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Greensboro Nonprofit Uses City Aid To Provide Loans That Help Small Businesses Hold On | Business https://erinsrays.com/greensboro-nonprofit-uses-city-aid-to-provide-loans-that-help-small-businesses-hold-on-business/ Tue, 09 Mar 2021 10:57:37 +0000 https://erinsrays.com/greensboro-nonprofit-uses-city-aid-to-provide-loans-that-help-small-businesses-hold-on-business/ Piedmont Business Capital, which for years adapted loans to all types of small businesses, especially minority and women-owned businesses, and offered business advice and support, quickly established a emergency designed to save some of those businesses that need money to survive. And Greensboro City Council at its last regular meeting on April 21 voted unanimously […]]]>

Piedmont Business Capital, which for years adapted loans to all types of small businesses, especially minority and women-owned businesses, and offered business advice and support, quickly established a emergency designed to save some of those businesses that need money to survive.

And Greensboro City Council at its last regular meeting on April 21 voted unanimously to provide an economic development grant of $ 450,000 for what PBC calls its small business continuity fund that helps at least 40 businesses. to pay certain bills while waiting to reopen.

Interest-free loans, up to $ 10,000, don’t require payments for 90 days and the qualification process is relatively straightforward, said Wilson Lester, executive director of the Greensboro-based agency that serves Alamance counties. , Guilford and Forsyth. Currently, small business loans are only available in Guilford.

The $ 450,000 will help Lester’s agency provide the loans and hire a full-time administrator to handle the paperwork.

Piedmont Business Capital has already loaned approximately $ 360,000 to companies, with nearly 40 and another 18 awaiting assistance, Lester said. Of all these businesses, the vast majority are owned by either women or minorities, with a handful being owned by white men.

“They come from all industries,” Lester said. “Everyone, in one way or another, was touched by this experience.


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Sarr accepts five-year contract at Chelsea as several defenders prepare to leave on loan https://erinsrays.com/sarr-accepts-five-year-contract-at-chelsea-as-several-defenders-prepare-to-leave-on-loan/ Tue, 09 Mar 2021 10:57:37 +0000 https://erinsrays.com/sarr-accepts-five-year-contract-at-chelsea-as-several-defenders-prepare-to-leave-on-loan/ Chelsea have agreed to sign Malang Sarr on a five-year contract after his contract with Nice expired, but are expected to send the France Under-21 international on loan immediately. The 21-year-old will undergo a medical examination this week ahead of his move to west London, which means Bayer Leverkusen, Schalke and anonymous Italian clubs will […]]]>

Chelsea have agreed to sign Malang Sarr on a five-year contract after his contract with Nice expired, but are expected to send the France Under-21 international on loan immediately.

The 21-year-old will undergo a medical examination this week ahead of his move to west London, which means Bayer Leverkusen, Schalke and anonymous Italian clubs will miss the center-back.

It is understood that Arsenal had also followed Sarr, but chose not to offer him a contract at the end of his previous deal with Nice.

The Blues could conclude six summer contracts by the end of the week, Thiago Silva is expected to join them after leaving Paris Saint-Germain after their 1-0 loss to Bayern Munich in the Champions League final.

Leicester City’s Ben Chilwell has also been given the green light to make a move to Stamford Bridge after medical tests allayed concerns over his current heel injury. Chelsea will pay £ 50million ($ 66million) for the full-back.

Additionally, the Blues made a breakthrough in talks for Leverkusen’s Kai Havertz, with Frank Lampard’s side agreeing to pay the German side’s asking price of £ 90million ($ 118million), although the negotiations are still ongoing regarding the installment payment.

The attacking midfielder will initially cost £ 72million ($ 95million) and an additional £ 18million ($ 24million) in team-related performance add-ons, while Hakim Ziyech and Timo Werner have already finalized their transfer to the Premier League club.

With so many entries, Chelsea are looking to get players out ahead of the new season and Inter are in talks for Emerson Palmieri after the Blues set an asking price of £ 26million ($ 34million).

In addition, a slew of those on loan are currently training under Lampard in Cobham but are expected to seal temporary moves elsewhere, with Marc Guehi set to re-sign with Swansea City after traveling to complete the move on Wednesday.

Jake Clarke-Salter looks set for another Championship loan, with Derby County, Huddersfield Town, Birmingham City and Sheffield Wednesday showing interest in him.

Along with that, West Brom could be another option as Chelsea assess which club would be best for their development after a good year at Birmingham last season.

Injured defender Baba Rahman is currently in good shape and is aiming for another loan. However, a permanent move is not ruled out in his case, with German clubs considering giving him a chance to rebuild his career.

Matt Miazga is attracting interest from many different leagues and appears ready for another loan, while Nathan Baxter and Dujon Sterling are also receiving offers.

Conor Gallagher and Ethan Ampadu are among those training at Cobham under Lampard in a bid to impress their manager, but could well find themselves on loan as new signings reduce squad space.

Chelsea are in advanced talks with AC Milan to send Tiemoue Bakayoko on loan again, but want to turn a call option into a buy obligation at around £ 20million ($ 26million).

Meanwhile, Rennes have offered Fikayo Tomori a loan, with Everton still chasing the local defender who broke through last season.


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Taiwanese banks should hold their own on loan pricing https://erinsrays.com/taiwanese-banks-should-hold-their-own-on-loan-pricing/ Tue, 09 Mar 2021 10:57:36 +0000 https://erinsrays.com/taiwanese-banks-should-hold-their-own-on-loan-pricing/ Plastic producer Formosa has sent a request for proposals for a loan of $ 2 billion, which will be used for its activities in Vietnam. Taiwanese banks are said to be in fierce competition for the mandate in an attempt to register assets before the end of the year. Their eagerness to turn to solid […]]]>

Plastic producer Formosa has sent a request for proposals for a loan of $ 2 billion, which will be used for its activities in Vietnam. Taiwanese banks are said to be in fierce competition for the mandate in an attempt to register assets before the end of the year.

Their eagerness to turn to solid credit like Formosa, rated A3 by Moody’s and A- by S&P Global Ratings, is natural.

The flow of transactions has been thin this year as companies put capital spending on the back burner and folded during a difficult time amid the coronavirus pandemic. For Taiwanese banks in particular, their backbone in recent years, from lending to Chinese borrowers to working with clients in Southeast Asia, has also suffered a setback, amid growing fears of default in the region.

This means that these banks are increasingly willing to accept aggressive pricing terms from Taiwanese companies as they shift gears to support local borrowers.

The fundraiser planned by Formosa is a good example. The company, through a number of subsidiaries, is soliciting bids from banks for a five-year tranche and a three-year tranche with a two-year extension option.

Speculation is rife that the company will drive prices down significantly and even set a new benchmark for dollar lending in the region.

It would, of course, be a victory for Formosa. But it could have damaging consequences for the Asian lending market if Taiwanese banks do not hold their positions.

Taiwanese banks, especially public lenders, are not known to be very strict in their return requirements. They are often willing to accept prices that do not justify the risk of a deal when they are struggling to find deals in which to participate. They also sometimes take out loans that are priced below their financing costs, in an attempt to build and expand their relationships. with new borrowers.

This approach is not viable, however, and will suffer more if banks give Formosa more leeway in pricing its loans, because if and when the company returns to refinance, it will likely charge the same level of pricing, or even less. . . This will put the banks in a dilemma: Do they risk damaging their relationship with one of Taiwan’s most eager borrowers for Taiwan dollar loans by pushing back prices, or incurring a loss on another transaction?

It’s a delicate balance, especially since Formosa is a frequent borrower. If its Vietnamese subsidiaries manage to reduce their financing costs this time around, it is likely that the company’s other subsidiaries will also be inclined to revalue their debt.

This would set a precedent for other Taiwanese borrowers, who will try to push the price limits further. More companies on the island are expected to raise funds in dollars, as this is cheaper than financing in the domestic market in local currency at the moment.

More importantly, it could also cause a domino effect on the rest of the syndication market in Asia.

Taiwanese banks typically cite international banks and their cheap dollar liquidity as the reason for squeezing margins in the Asian lending market. This has been particularly the case with several companies in South and Southeast Asia, which have been able to reduce prices with each return of loan. For example, a Taiwanese banker said GlobalCapital Asia this week she has been questioned for a State Bank of India loan four times by different international banks this year. All offered very fine margins.

However, if Formosa does manage to hit a new low with this exit, it will show that Taiwanese banks are willing to sacrifice returns to counter a slowing market. Borrowers in the rest of Asia and international banks would be rushing to do this to tighten transaction prices further.

There is an obvious winner with this, of course: borrowers who can save on their financing costs. But that advantage could quickly wane if market conditions change and banks find it difficult to survive on bad loans in the absence of sufficient ancillary activities.

Taiwanese banks are expected to stand firm on their pricing demands – or risk facing an even tougher loan market in the future.


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Bulk loan documentation to put to the test https://erinsrays.com/bulk-loan-documentation-to-put-to-the-test/ Tue, 09 Mar 2021 10:57:35 +0000 https://erinsrays.com/bulk-loan-documentation-to-put-to-the-test/ LONDON, April 24 (LPC) – Exceptionally aggressive documentation obtained by sponsors on portfolio companies in recent years is set to finally be put to the test as borrowers seek to boost liquidity in the wake of the Covid-19. Loan documentation has become increasingly slack as banks and investors squabble over deals amid a supply-demand imbalance […]]]>

LONDON, April 24 (LPC) – Exceptionally aggressive documentation obtained by sponsors on portfolio companies in recent years is set to finally be put to the test as borrowers seek to boost liquidity in the wake of the Covid-19.

Loan documentation has become increasingly slack as banks and investors squabble over deals amid a supply-demand imbalance that has dominated the leveraged loan market in Europe these past few years. last years. This gave private equity sponsors great flexibility to take on additional debt and gave them greater control over assets.

Investors fear sponsors will use up everything in their arsenal as companies face liquidity issues caused by the foreclosure.

“The problem is, the bulk documentation has never been tested,” said one debt investor. “Everyone should assume that sponsors will take advantage of all the baskets and bulk documentation points if they need to inject money or find titles to support new funds.”

Under the “free baskets” in most loan agreements, borrowers are allowed to incur additional debt of the same rank, without the approval of existing lenders.

“We are seeing sponsors starting to use it. Either they are looking to use it for additional bank loans, or they are potentially looking to provide senior debt themselves. Said David Gillmor, sector manager of European leveraged finance at S&P Global Ratings.

While additional liquidity is positive for many borrowers, it could turn out to be negative for many lenders as leverage increases and collection rates decline.

“The additional debt would inevitably increase the company’s leverage ratio and dilute the position of senior lenders,” said Gillmor at S&P.

Analysts believe loan holders would recover much less in this current economic downturn than they have in the past.

S&P estimates that the average first lien recovery rate in the European leveraged loan market will be around 60% of face value, compared to the recovery rate of 70% to 75% over the last two cycles. .

HATCH J CREW

However, one of the situations that most horrifies investors is a borrower’s ability to pledge or transfer valuable assets in an attempt to obtain additional liquidity.

One of the alarming examples was J Crew Group in late 2016. Private equity firm TPG took advantage of a loophole in the debt conditions of the US clothing retailer to transfer some intellectual property rights to a subsidiary.

Following the transfer, the assets no longer served as collateral for the secured loans and, instead, the transferred assets were used to secure new debt issues and buy back bonds.

In Europe, security packages have also eroded in recent years. Most of them have a limited scope of collateral assets and the documentation gives sponsors flexibility in controlling these assets.

“There is a long list of baskets, exclusions and provisions buried in 500-page legal documents. Lenders are probably not even aware of the number of gaps, ”one lawyer said.

However, analysts believe sponsors are unlikely to withdraw assets for liquidity purposes, due to reputational risk.

“This could be viewed by the market as a nuclear option, as no private equity firm wants to be the first to be labeled as the equivalent of J Crew in Europe,” said Gillmor at S&P.

In addition, investors have stated that the flexibility that financial sponsors have enjoyed over the years is based on trust and that breaking that trust could seriously cost sponsors in the future when they return to capital markets. to raise funds.

“Sponsors will have to be very careful how they act, otherwise they will break the market,” said a second investor. (Edited by Claire Ruckin and Christopher Mangham)


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