Friday, February 27, 2009

Student loan companies' shares plunge on Obama proposal

President Obama's proposal for direct government funding of student loans -- cutting out private industry -- sent shares of Sallie Mae, Student Loan Corp., Nelnet Inc. and other college loan companies plunging Thursday.

For-profit vocational schools, such as Corinthian Colleges Inc., DeVry Inc. and ITT Educational Services Inc., also saw their stock prices drop. Their students often rely on government-backed loans from private lenders.

Currently, students needing funds typically borrow money directly from the government or from banks and other lenders such as Sallie Mae that issue loans subsidized or backed by the government.

Obama's budget proposal for the 2010 fiscal year, which begins Oct. 1, calls for cutting out the middlemen by eliminating subsidies to lenders. The administration believes that the move to the Department of Education's Direct Loan Program could save more than $4 billion a year.

Analysts said the proposal was another blow to the nearly $90-billion student loan market. Lenders have struggled recently with a credit crisis and accusations of manipulative policies, spotty disclosure and deceptive practices. In some cases, for example, lenders have pretended to represent schools' financial aid offices.

Although some analysts said the proposal might not survive its trip through Congress, it seems to indicate that private student lenders are facing an uphill battle with the new administration.

Still, the cost and risk to the government of converting thousands of colleges to the direct-loan program could be enormous, said FBR Capital Markets analyst Matt Snowling. The government might find that it doesn't have the capacity to handle an additional $60 billion a year in student loans.

The Obama plan recognizes the need for help. Under the proposal, the Department of Education may use some of the private lenders as loan servicers.

The special allowance subsidy paid by the government is the main incentive for lenders to allow students to borrow at all, since the high rate of default makes those loans otherwise unprofitable.

Sallie Mae, known officially as SLM Corp., saw shares dive $2.59, or 31%, on Thursday to $5.80. Nelnet Inc.'s stock plummeted $5.83, or 54%, to $4.91. Student Loan Corp., a unit of Citigroup Inc., dropped $11.63, or 22%, to $41.51.

Sallie Mae worked closely last year with the government to ensure that students had access to federally backed loans without putting the burden on taxpayers, said Al Lord, SLM's chief executive. The company manages a $169-billion student loan portfolio and services more than 10 million borrowers.

"We are committed to delivering and servicing federal student loans, regardless of their funding sources," he said.

Student Loan Corp. argued against the Obama proposal, saying that "healthy competition leads to choice, innovation and high standards of service."

Nelnet contended that student loan programs should "maintain the benefits of choice and competition, and should not contribute significantly to the national debt."

Private companies lent $78 billion to students in the 2007-08 school year, said Mark Rodgers, a Citigroup spokesman.

Shares of several owners of private colleges also dropped Thursday, although experts said they were unsure whether Obama's proposal was to blame.

Corinthian Colleges Inc. in Santa Ana fell $1.35, or 6.7%, to $18.86. DeVry Inc., which runs DeVry University and DeVry Institute of Technology, was down $2.10, or 3.9%, to $51.30. ITT, which runs ITT Tech institutions around the country, dropped $6.60, or 5.6% to $110.69.

But the suggested shift away from government-backed private loans isn't a crippling move, said Lorena Valencia, who runs the financial aid program for ITT Tech in Torrance. Most of the students get loans from Sallie Mae or its competitors, she said, but the school also provides information on direct government loans.

"Since we present all the options to students and leave the choice to their discretion, there wouldn't be either a positive or negative impact on the school," Valencia said.

The timing is not good for some private lenders who have been hobbled by loan defaults after graduating students fail to find jobs in the worsening economy, said Emily Peters, a personal finance expert for consumer website

"Financing for student loans has fallen through the cracks in the last few months, with higher default rates and struggling companies," Peters said.

"This is definitely changing the landscape for a whole industry already in flux, though there's still a potentially strong market for private loans."


Tuesday, February 17, 2009

Helan Mountain Fuyin Temple Tourism District (the North Temple)

Located in the Helan Mountain State Forest Park, 25 kilometers north of Bayanhot and 160 kilometers from Wuhai airport, the district is the second largest Tibetan buddhism shrine in Alxa League, which was built in 1804 and named by the Jiaqing Emperor in the Qing dynasty the Fuyin Temple. The tourist district features multiple surrounding hills, evergreen pines and cypresses, singing birds, fragrant flowers, beautiful scenery, convenient communication and transportation system. With complete set of hotel and restaurant facilities, the place is an ideal summer resort, holiday and tourism scenic spot.

Thursday, February 12, 2009

Washington - The Road to Success

Washington Learns’ 2005 Interim Report spurred significant gains for education in the 2006 legislative session, including:
  • Creation of a cabinet-level Department of Early Learning that consolidates more than a half-dozen childcare and early learning programs, giving real focus to helping our youngest learners thrive early in life.

  • Programs and funding to help high school students achieve graduation standards.

  • Mentor and apprenticeship programs that help middle and high school students prepare for life after graduation whether entering the workforce or college.

Many of the recommendations from the 2006 Final Report were passed by the 2007 legislative session, including:
  • Expansion of all-day kindergarten.

  • Programs to ensure better math and science teaching and learning.

  • Scholarship programs and grants to give more people access to higher education.

Thursday, February 05, 2009

Statement from Gov. Rod R. Blagojevich-On the Department of Energy’s plans to dismantle FutureGen

CHICAGO – “The U.S. Secretary of Energy’s proposal to dismantle FutureGen is an example of politics at its worst. Secretary Samuel Bodman is not only jeopardizing the benefits FutureGen promises to deliver, but he deceived the people of East Central Illinois who spent time and resources competing for the project. We’re not giving up the fight to make FutureGen a reality in Illinois.

“After an almost five-year long, rigorous site review process, the FutureGen Alliance announced on December 18th that Mattoon, Illinois will be home to the landmark project. On November 30th, 2007, the Department of Energy sent a letter reaffirming that the project was moving forward as planned. Only after it became clear that an Illinois site would be chosen over a Texas site, the Department suggested the project be delayed and now today, that it be dismantled.

“Just last night during his State of the Union Address, President Bush said that environmentally responsible energy is essential to keeping our economy growing, and that his budget provides strong funding for leading-edge technology, including clean coal. Secretary Bodman’s decision to reverse course on the most important clean coal project to date represents a striking contradiction to the President’s comments. I urge President Bush, who initiated FutureGen in 2003, to stand by the project and move it forward.

“And while we seek clarification from the Bush administration on its commitment to clean coal, it’s also critical to know where the candidates vying to replace President Bush stand when it comes to supporting FutureGen. I am asking all the individuals running for President to let Illinois voters know where they stand before voters cast their ballots on February 5th.”