“Banks increase cost of personal loans (Daily Telegraph)” plus 3 more |
- Banks increase cost of personal loans (Daily Telegraph)
- Personal loans fall 1.5% in October (BigPond News)
- Personal loans fell 1.5% in October (Brisbane Times)
- Students of for-profit colleges more likely to default on loans (Washington Post)
Banks increase cost of personal loans (Daily Telegraph) Posted: 14 Dec 2009 05:58 AM PST The cost of a best buy £5,000 loan has risen 1.54 per cent since the beginning of the year to 10.78 per cent despite interest rates being at a historic low of just 0.5 per cent. The rise means customers will spend £162 a month over three years repaying the loan, or an extra £120 over the lifetime of the deal compared to last January. Tim Moss, head of loans and debt at personal finance website Moneysupermarket.com, said: "The financial crisis may have eased but this hasn't filtered through to the personal loan market yet. "We have seen the banks go from choosy to almost locking down completely. By restricting loans to existing customers only, banks are able to manage their lending more cautiously." The Bank of England disclosed last week that non-mortgage or credit card based lending fell by £0.7 billion in October, but experts said the decline was expected given the restricted choice of loans available. Mr Moss added: "It is no surprise: it is quite clear that the fall in this kind of lending is almost entirely down to a lack of supply. The research by Moneysupermarket.com suggested eight out of nine high street lenders only offered loans to existing customers, typically current account customers. A spokesman for the British Bankers' Association, said: "We have also seen the average rates for personal loans increase across the board so consumers who are lucky enough to be accepted for a loan have to pay more too." "The UK economy has changed considerably since the credit crunch began and it is still changing. Lenders price their loans according to the economic factors of the time, and although there is still aggressive competition for customers, there are also harsh economic realities they have to deal with. "They still have to fund their loans using a mix of wholesale money and customers' deposits, and neither of these options is open to them at anything like the Bank of England's base rate." fivefilters.org featured article: Normalising the crime of the century by John Pilger |
Personal loans fall 1.5% in October (BigPond News) Posted: 13 Dec 2009 10:04 PM PST Total personal finance commitments fell 1.5 per cent in October, seasonally adjusted, to $6.953 billion, from $7.062 billion in September, the Australian Bureau of Statistics said. Total commercial finance was down 16.3 per cent in October, seasonally adjusted, to $25.778 billion, down from $30.803 billion in September. Lease finance rose 0.5 per cent in October to $383 million, compared with $381 million in September. Housing finance for owner occupation fell 1.7 per cent to $17.176 billion in October from $17.465 billion in September. fivefilters.org featured article: Normalising the crime of the century by John Pilger This posting includes an audio/video/photo media file: Download Now |
Personal loans fell 1.5% in October (Brisbane Times) Posted: 13 Dec 2009 05:18 PM PST AAP Total personal finance commitments fell 1.5 per cent in October, seasonally adjusted, to $6.953 billion, from $7.062 billion in September, the Australian Bureau of Statistics (ABS) said on Monday. Total commercial finance was down 16.3 per cent in October, seasonally adjusted, to $25.778 billion, down from $30.803 billion in September. Lease finance rose 0.5 per cent in October to $383 million, compared with $381 million in September. Housing finance for owner occupation fell 1.7 per cent to $17.176 billion in October from $17.465 billion in September. fivefilters.org featured article: Normalising the crime of the century by John Pilger |
Students of for-profit colleges more likely to default on loans (Washington Post) Posted: 13 Dec 2009 09:00 PM PST Historically, the government has reported such figures in terms of how many students default within two years -- a figure that stands at 6.7 percent of student borrowers overall and about 11 percent at for-profit schools. But the new three-year numbers, though preliminary, give a clearer picture of whether a student at a particular school will default, so the government will soon begin using them to help decide which colleges qualify for taxpayer-supported student aid programs. Currently, schools with default rates over 25 percent for three straight years can be disqualified, but experts argued that schools were gaming the two-year figures. So starting in 2012, colleges will be judged on how many students default within three years of starting repayment, though the new threshold default rate for sanctions will be 30 percent instead of 25 percent. Nearly 12 percent of borrowers who began repayment in fiscal 2007 defaulted within three years -- up from 9.2 percent for 2006. But at for-profit colleges, the rate was 21.2 percent within three years, the Associated Press calculated from the government's data. That was up from 18.8 percent for fiscal 2006. More recent overall figures aren't available, though experts generally presume default rates increased during the recession. Harris Miller, president of the Career College Association, which represents for-profit colleges, said the increase reflects the poor economy. He also said high default rates don't measure a school's quality, and noted that his group's members enroll large numbers of low-income students. "If you accept low-income students you're going to have high default rates," he said. In recent years, only a few schools have lost eligibility for aid due to high default rates. But the new data show more than 300 colleges -- more than 85 percent of them for-profit schools -- had three-year default rates higher than 30 percent. Most of those schools, however, are smaller, local institutions and not the giant national chains. Among the better-known institutions, the data indicate a three-year default rate of 15.9 percent at University of Phoenix, 23.2 percent at Kaplan University and 17.1 percent at DeVry University. The figures do not include private student loans, just those from the government. For-profit colleges are attracting a surging proportion of federal student aid dollars, the AP reported last month, reflecting the rising share of low-income students they educate. But critics say that's no excuse for higher default numbers; they say it leaves for-profit schools with a greater obligation to make sure students don't overborrow. Critics also contend students struggle to pay back loans because credentials from too many for-profit schools aren't rewarded in the job market. Michael Dannenberg, senior fellow at the New America Foundation, said the school-level data (searchable at http:/ / fsadatacenter.ed.gov) give students potentially valuable information to consider when considering college. "In general, higher education is a good investment, but there are no guarantees," he said. "At some schools, there's a one-in-five chance you'll be in worse financial shape -- three years out -- than before you began." Students, he added, should be careful about borrowing large amounts of money for college. "The debt can grow exponentially in default, and it follows you forever," he said. "College loans can almost never be discharged in bankruptcy." Dan Madzelan, the Education Department's acting assistant secretary for postsecondary education, noted that while some for-profit colleges have high default rates, others are in line with traditional colleges. He also cautioned that for some schools with high rates but a low number of borrowers, the default rate numbers could be misleading.
fivefilters.org featured article: Normalising the crime of the century by John Pilger |
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