IBR Great but Don’t Over Sell It.

Is IBR plans helpful? I just recently read this article about IBR’s take a look here…https://www.forbes.com/sites/prestoncooper2/2018/08/07/income-based-repayment-reduces-student-loan-delinquency-but-dont-oversell-it/#7cf66f6e37d0

Matt Klabacka

702-610-8574 mobile/text

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New 90/10 Rule Poised to Help Career Colleges

read full article here. https://www.educationnext.org/change-rules-unleash-innovation-forum-rethinking-rules-federal-higher-ed-spending/

Matt Klabacka

Default Prevention
702-610-8574 mobile/text

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Gainful Employment Renaming and Covering Harvard Also

ED is getting ready to throw a bone to the for profit industry by making all higher ed institutions comply with a gainful employment stylized reg….read more at wsj…

https://www.wsj.com/articles/devos-plans-to-repeal-obama-rule-targeting-underperforming-training-colleges-1532641977

Matt Klabacka

Default Prevention, Inc

PO BOX 50682

Henderson, NV 89016

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Loan Forgiveness Program Major Changes

Recent Article in WSJ regarding loan forgiveness from

Zack Friedman is a keynote speaker and Founder & CEO of Make Lemonade, a personal finance comparison site that helps you save money and live a better financial life. wall Street Journal Article

A new republican bill in the House of Representatives could end public debt on student loans. If you have student loans and plan to work in the civil service, be sure to do so. Or, if you have student loans and plan to use a federal student loan repayment program, this bill could affect your plans. You have to know that.

PROSPER law Rep Virginia Foxx (RN.C.) and Rep Brett Guthrie (R-KY) Committee of Representatives on Education and Workforce presented 542 pages of legislation known as Real Chance to Promote Success and Prosperity through the Education Reform Act (PROSPER).

The bill affects higher education in various material ways, including the immediate abolition of forgiveness of public services. PROSPER also reduces state aid programs and restricts the regulations that traditionally restricted federal funds to for-profit universities. Sponsors hope to reduce the role of taxpayers in funding state public education

What is the forgiveness of public loans? Program Loan Forgiveness for Civil Service is a federal program that pardons federal student loans to borrowers who work full time (more than 30 hours per week) in a job of federal, state, or local qualified public service or 501 (c) (3) non-profit work, which entitles 120 timely payments for 10 years. In order to qualify for public sector loan indebtedness, a borrower must be enrolled in a federal loan repayment program. Almost 600,000 borrowers have registered for the forgiveness of public loans. Earlier this year, the US Department of Education UU He proposed to cancel the pardon of public-law loans.

In addition, in a law filing on March 23, the Department of Education said student loan borrower could not have sent approval for loan forgiveness public service sent by program managers, service FedLoan, because any approval it is considered provisional. President George W. Bush launched the public service loan pledge in 2007 to inspire more graduates to enter the civil service.

Benefits for schools for profit Profit-oriented schools would benefit from PROSPER. For example, the law would delete "Rule 90/10," stating that for-profit colleges can not receive more than 90% of their income from federal title IV support. The bill also removes the rule of paid employment, which sets minimum debt-to-income ratios for graduates of for-profit universities. Under current regulations, non-profit colleges do not meet the minimum threshold for employment as they are not eligible for State aid. Changes in the repayment of student loans

Student loan payment plans would be reduced from eight options to two: a standard 10-year plan and an income-based plan. According to the current loan repayment programs of the federal student as PAYE and REPAYE, borrowers can limit their monthly student loan payments based on their income and then students receive loans after 20 or 25 years (depending on whether they have a college degree or postgraduate).

PROSPER would eliminate the forgiveness of student loans after 20 or 25 years, but limit interest payments after 10 years. Threshold of June 2018 Neither the proposed changes to public sector loan indebtedness nor the repayment of federal student loans (PAYE / REPAYE) would affect the current borrowers who participate in these programs. In contrast, borrowers participating in these programs after June 2018 would be the first to be affected.

So, if you are a student loan borrower who enrolled in a government loan repayment program that subscribed to Public Service Loan Forgiveness before June 2018, you will likely continue to benefit from the Public Service Loan Agreement. If you are currently a student loan borrower who does not enter a federal student loan repayment program before June 2018, then you would not benefit from the Public Service Loan Forgiving under this proposed legislation.

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5,000,000 borrowers in Default Status

The Wall Street Journal reported today that "The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter"….read more.

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Bankers Ease Rules on Private Loan Automatic Defaults

Private lenders are revising student loan contracts to ensure people are not placed in default when the co-signer of their loan dies or declares bankruptcy, putting an end to a practice brought to light by the Consumer Financial Protection Bureau.

read more here

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Navient Earnings Report

Navient Corporation’s NAVI third-quarter 2016 core earnings of 50 cents per share beat the Zacks Consensus Estimate of 47 cents. Also, the figure improved 6.4% year over year.

The third-quarter results of Navient were aided by lower provision for credit losses as well as higher non-interest income. However, net interest income decreased while expenses remained stable in the quarter.

Notably, core earnings excludes the impact of the financial results of the consumer banking business for period prior to the spin-off of Navient from Sallie Mae in Apr 2014 as well as the related restructuring and reorganization expenses. It also excluded the impact of certain other one-time items including unrealized, mark-to-market gains/losses on derivatives.

GAAP net income for the quarter was $230 million, or 73 cents per share, compared with $237 million, or 63 cents per share, in the prior-year quarter.

FindTheCompany | Graphiq

Improved Non-Interest Income; Provisions Down

The following figures are calculated on a core earnings basis:

Net interest income declined 12% year over year to $405 million.

However, non-interest income reported a growth of 7.8% year over year to $179 million. Servicing revenues remained stable while asset recovery revenues improved.

Also, total expenses remained unchanged at $228 million. Encouragingly, provision for credit losses decreased 13.8% year over year to $106 million.

Segmental Performance

Federally Guaranteed Student Loans (FFELP): The segment generated core earnings of $69 million, down 1.4% year over year. The underperformance was mainly attributable to a decrease in servicing revenue.

During the quarter, Navient acquired FFELP loans of $596 million. As of Sep 30, 2016, the company’s FFELP loans came in at $90.1 billion, down from $98.5 billion as of Sep 30, 2015.
FFELP loan spread edged up 6 basis points (bps) year over year to 0.96%.

Private Education Loans : For the quarter, the segment reported core earnings of $60 million, a 22.1% decline year over year. The fall was due to reduced net interest income, partially offset by lower provision for loan losses.

Total delinquencies came in at 6.9% of loans in repayment, down 50 bps year over year. Charge-off rate of 1.9% of average loans decreased from 2.3% in the prior-year quarter.

During the quarter, Navient acquired private education loans of $66 million. As of Sep 30, the company’s private education loans totaled $24.0 billion, compared with $27.3 billion a year ago.

Student loan spread decreased 24 bps year over year to 3.64%.

Business Services : The segment reported core earnings of $81 million, up 2.5% year over year. Increase in education loan-related asset recovery revenue on a year-over-year basis led to the upside.

Currently, Navient services student loans for over 12 million customers. This includes 6.2 million customers on behalf of the U.S. Department of Education.

Other : The segment reported a net loss of $53 million, compared with a loss of $52 million in the prior-year quarter.

Source of Funding and Liquidity

In order to meet liquidity needs, Navient expects to utilize various sources including cash and investment portfolio, issuance of additional unsecured debt, repayment of principal on unencumbered student loan assets and distributions from securitization trusts (including servicing fees). It may also issue term asset-backed securities (ABS).

During the reported quarter, Navient completed one FFELP ABS of $1 billion and issued unsecured debt of the value of $1.3 billion. Also, it retired or repurchased senior unsecured debt of $625 million.

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