Find all School-related info fast with the new School-Specific MBA Forum

It is currently 20 Aug 2014, 02:49

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Gloomy article on student loans in WSJ

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
User avatar
Joined: 30 May 2007
Posts: 496
Followers: 7

Kudos [?]: 69 [0], given: 0

GMAT Tests User
Gloomy article on student loans in WSJ [#permalink] New post 14 Feb 2008, 06:47
Based on the failed auctions for the auction-rate securities yesterday, which affects some student lenders, there is a broader article on the outlook for student loans. Does not sound too optimistic.

http://online.wsj.com/article/SB1202953 ... it-Markets

Take advice from Kryzak on saving now.
Manager
Manager
User avatar
Joined: 14 May 2006
Posts: 202
Followers: 1

Kudos [?]: 10 [0], given: 0

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 14 Feb 2008, 07:12
Certainly grim. Thanks for sharing.
Senior Manager
Senior Manager
avatar
Joined: 24 Jul 2007
Posts: 290
Followers: 2

Kudos [?]: 15 [0], given: 0

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 14 Feb 2008, 07:41
djhouse81 wrote:
Based on the failed auctions for the auction-rate securities yesterday, which affects some student lenders, there is a broader article on the outlook for student loans. Does not sound too optimistic.

http://online.wsj.com/article/SB1202953 ... it-Markets

Take advice from Kryzak on saving now.



certainly looks bad. Too late to start saving and fund it myself. If i dont get a loan, i dont go to school.
SVP
SVP
avatar
Joined: 05 Aug 2007
Posts: 1502
Schools: NYU Stern '11
Followers: 15

Kudos [?]: 205 [0], given: 22

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 14 Feb 2008, 08:55
I think you're overreacting a little, from the same article you linked:

Some observers are convinced that if lenders dependent on asset-backed securities leave the market, big banks with other sources of capital will step in and fill the void, especially for loans guaranteed by the federal government, which accounted for more than three-quarters of the $77 billion that students borrowed for the 2006-07 academic year. "This is a very good business," says Sandy Baum, a policy analyst for the College Board, "and such a low-risk thing."

Federal loans are guaranteed by the government and if you fill out the FAFSA, it's extremely likely that you will qualify for at least one graduate student loan program (PLUS) even if you don't qualify for the more popular subsidized/unsubsidized Stafford. Moreover, default rates for graduate students are much lower than those of college kids and even if lenders decided to slow things down, they would seek out MBA grads at good schools who would most likely have the greatest earning potential and thus be good borrowers. The student loan industry is huge and not going away anytime soon, but with interest rates expected to fall further, student loan-backed securities are going come back into favor once the market settles a bit. However, that's not to say that the volume of private education loans won't be affected.


Of course, things may be different for international students but I don't know what happens to those loans.
GMAT Club Legend
GMAT Club Legend
User avatar
Status: Um... what do you want to know?
Joined: 03 Jun 2007
Posts: 5464
Location: SF, CA, USA
Schools: UC Berkeley Haas School of Business MBA 2010
WE 1: Social Gaming
Followers: 64

Kudos [?]: 333 [0], given: 14

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 15 Feb 2008, 00:20
thanks for the article. Saving is good, though you may end up spending all your nest eggs since your expected contribution will be high after filling out the FAFSA (mine is insanely high... :( )
_________________

****************************
GMAT Club Knowledge Vault:
http://gmatclub.com/forum/123
Haas Ambassador
http://gmatclub.com/forum/128-t62555
Kryzak's Profile:
http://gmatclub.com/forum/111-t56286
Member Essays:
http://gmatclub.com/forum/103-t50969

CEO
CEO
User avatar
Joined: 17 May 2007
Posts: 2995
Followers: 55

Kudos [?]: 429 [0], given: 210

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 15 Feb 2008, 00:32
Guys for the uninitiated - what exactly is FASFA ? Sounds like end of year tax-returns that we do in Australia. Do you guys get taxed while you get paid or do u have to pay tax as a lump sum at the end of the year ?
GMAT Club Legend
GMAT Club Legend
User avatar
Status: Um... what do you want to know?
Joined: 03 Jun 2007
Posts: 5464
Location: SF, CA, USA
Schools: UC Berkeley Haas School of Business MBA 2010
WE 1: Social Gaming
Followers: 64

Kudos [?]: 333 [0], given: 14

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 15 Feb 2008, 01:03
It's the Free Application for Federal Student Aid. The thing you have to fill out in the US to get any loans and scholarships from any universities.
_________________

****************************
GMAT Club Knowledge Vault:
http://gmatclub.com/forum/123
Haas Ambassador
http://gmatclub.com/forum/128-t62555
Kryzak's Profile:
http://gmatclub.com/forum/111-t56286
Member Essays:
http://gmatclub.com/forum/103-t50969

Current Student
User avatar
Joined: 10 Dec 2007
Posts: 327
Followers: 5

Kudos [?]: 22 [0], given: 0

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 15 Feb 2008, 02:15
pandeyrav wrote:
djhouse81 wrote:
Based on the failed auctions for the auction-rate securities yesterday, which affects some student lenders, there is a broader article on the outlook for student loans. Does not sound too optimistic.

http://online.wsj.com/article/SB1202953 ... it-Markets

Take advice from Kryzak on saving now.



certainly looks bad. Too late to start saving and fund it myself. If i dont get a loan, i dont go to school.


Same here. I dont have the means to save the 40k needed for the first year in between now and August. ;)

Then again, seriously, I think us going to these elite/ultra-elite schools, I mean if they dont give us money, who will they give it to? Does it get any less riskier?
SVP
SVP
avatar
Joined: 05 Aug 2007
Posts: 1502
Schools: NYU Stern '11
Followers: 15

Kudos [?]: 205 [0], given: 22

GMAT Tests User
Re: Gloomy article on student loans in WSJ [#permalink] New post 15 Feb 2008, 04:29
Alright, so I did some more research on this and apparently the FAFSA only determines eligibility for subsidized or unsubsidized Stafford Loans. Which means, that most US folks should still remain eligible for federal Graduate PLUS Loans at 8.5% fixed (before any lender incentives). 8.5% isn't a really great deal, but at least it means you still have options other than private education loans even if your EFC is a little too high.

You still need to fill the FAFSA to get the PLUS loans certified by your school's financial aid office. But PLUS eligibility is based more on your credit history than your EFC as determined by the FAFSA.

Even at the college level, most top schools understand the FAFSA's methodology is a little wacky and require students to submit something called the CSS PROFILE (no relevance for b-school) for financial aid determination. So I wouldn't go nuts over this.
Re: Gloomy article on student loans in WSJ   [#permalink] 15 Feb 2008, 04:29
    Similar topics Author Replies Last post
Similar
Topics:
1 Student Loans InvestingInMyself 3 30 Jan 2013, 14:14
Finance Hiring Improving...WSJ Article phoenix09 1 22 Jun 2009, 04:57
15 WSJ article svrider 12 08 Nov 2008, 17:04
Student Loan for international students MBA2010Brz 1 08 Oct 2008, 07:06
Interesting WSJ article about PE and b-school naturallight 1 12 Jun 2007, 06:34
Display posts from previous: Sort by

Gloomy article on student loans in WSJ

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.