John Goodfellow must be ruing the day he left the calm of Skipton Building Society, where he was chief executive, for a 'quiet' life of semi-retirement, picking up the occasional, lucrative non-executive position to keep him in the grand style to which he had become accustomed.
Goodfellow, 62, left Skipton at the end of last year after 17 years at the helm - and he was sent on his way with generous compensation of £781,000.
With agreement from the society to fund his pension pot this year - as well as permission to access his £2 million pension fund early next year without any early retirement penalties - no one would have been surprised if he had called it a day and put his feet up.
But Goodfellow had no intention of remaining idle, which explains why he now finds himself trying to sort out the administrative nightmare that is the Student Loans Company.
Goodfellow has been non-executive chairman of SLC for just over a year and he has spent most of his time fighting fires.
In autumn the SLC went into meltdown as it failed to process about 100,000 loans in time for the start of the 2009-10 academic year, leaving many students cashstrapped and relying on hardship funds.
More...
100,000 students start term without loans (thisismoney.co.uk)
'No student loans for middle classes' (thisismoney.co.uk)
About 60,000 loans have yet to be processed and while the SLC is apportioning blame, all the evidence suggests that it remains administratively challenged.
This month, Professor Sir Deian Hopkin published a damning report into the SLC. He accused it of 'management indecision' and 'conspicuous failure in key areas' when its computer system failed during the summer, triggering the ensuing chaos.
These problems were perpetuated by the SLC failing to man phone lines adequately to cope with the deluge of enquiries from students - while stonewalling everyone else.
In the wake of Hopkin's coruscating report, Goodfellow apologised and promised to shake up the SLC.
Last week, evidence of this 'shake-up' emerged when it was confirmed that two directors - Wallace Gray (information and communications technology director, paid £128,000) and Martin Herbert (customer services director, paid £125,000) - had 'resigned'.
Given that it was inept customer service and failing information technology that lay at the heart of SLC's woes, such departures are hardly surprising, though it sticks in the craw that these individuals will walk away with six months' money as their reward for failure.
Yet Ralph Seymour-Jackson, £145,000-a-year chief executive and the man responsible for the overall (mis-)management of the SLC, survived, surely by the skin of his teeth.
He will be supported by a chief operating officer, yet to be appointed, responsible for 'service delivery and risk management'. Goodfellow is also looking for a director of human resources whose job will be to put the 'customer experience firmly at the heart of the organisation' - a first.
Hopefully, Goodfellow's overhaul will deliver on the grand promise he made last week, which was 'to do whatever it takes to ensure processing and payments are faster next year, so that we can deliver the service that students and their parents have every right to expect.'
Failure will certainly result in his own swift departure. Hard-pressed students and parents would expect nothing less. The SLC is a national disgrace and Goodfellow has a challenging year ahead of him righting its many wrongs.
Which financial brands should readers trust in the New Year? In light of the financial turmoil, scandals and excesses of the past two years, it's a challenging question and there are few contenders.
Most well known brands - such as RBS, HBOS, Lloyds TSB and Northern Rock - have lost the nation's trust. And given some executives of these organisations-continue to bleat about their mega-bonuses being taxed, consumer trust will remain in short supply for the foreseeable future.
Co-operative Bank, re-energised by its acquisition of Britannia Building Society, has a chance of winning over the hearts of more consumers with its mutual ownership and ethical stance. And Yorkshire Building Society, provided it can absorb Chelsea successfully, stands a chance of overtaking fellow Nationwide, not in size, but in terms of trust given the latter's many problems (mediocre service standards, et al).
But as everyone with an interest in financial services knows, today's crowd pleaser can easily become next year's bete noire. Financial Mail will continue to do its best steering you in the direction of security, value and quality service.
After all, that's what is wanted from financial firms. It shouldn't be too much to ask, should it?
Source
Monday, March 15, 2010
Sunday, February 28, 2010
For One Student, the Cost of College Forces a Painful Decision
Amanda Ly is an 18-year-old who graduated from high school in Alhambra, Calif., this year with dreams of leaving home and enjoying the whole college experience at the University of New Haven on the East Coast.
But in an essay on the Web site L.A. Youth, Ms. Ly described her disappointment over having to withdraw from the University of New Haven because of the cost:
The first time I visited U.N.H. was for freshman orientation, the week after high school let out in June. The school was just as it looked in the pictures. It had a mix of new and old buildings. The older buildings were brick as most of the school was, and the newer buildings were more modern. I liked the small class sizes and academic opportunities like internships and study abroad. Although I was not used to the cold, gloomy, wet weather in June, I liked the small-town atmosphere (population 124,000) and the people. I met people from all over the East Coast and made new friends. After orientation, I felt that it was the school for me. I thought, “I can make this work.”
When I came back from orientation, I started thinking about paying for college. Neither of my parents went to college and they don’t speak English so they don’t understand how things work.
During the first week of July, I went to Wells Fargo with my dad to apply for a private student loan. The loan officer asked my dad and I questions regarding my parents’ and my credit history, employment info and debts. She came back 10 minutes later and told us our request for a collegiate loan was denied because our household income was too low.
As Ms. Ly explains it, the grants and loans offered in her financial aid package only covered 70 percent of the $42,000-a-year cost of attending the university. “Each semester, I was expected to pay about $6,000,” she wrote.
She goes on to describe her efforts to find scholarships and loans and ultimately, her phone call telling the university she could not afford to attend.
After I told them of my decision, I felt sad and empty, like my life had just been paused. My college dreams were put on hold.
Now I live at home and attend East Los Angeles College. I’m tired because I work during the day and my classes are at night. After community college, I plan on transferring to Humboldt State or another four-year school to get my bachelor’s degree in psychology or administration of justice.
I’m disappointed I’m not at U.N.H. this fall. I was really looking forward to moving out and living the college life. Yet at the same time I understand that the economy makes it harder for people to get loans because banks are not willing to take risks giving them out right now.
Source
But in an essay on the Web site L.A. Youth, Ms. Ly described her disappointment over having to withdraw from the University of New Haven because of the cost:
The first time I visited U.N.H. was for freshman orientation, the week after high school let out in June. The school was just as it looked in the pictures. It had a mix of new and old buildings. The older buildings were brick as most of the school was, and the newer buildings were more modern. I liked the small class sizes and academic opportunities like internships and study abroad. Although I was not used to the cold, gloomy, wet weather in June, I liked the small-town atmosphere (population 124,000) and the people. I met people from all over the East Coast and made new friends. After orientation, I felt that it was the school for me. I thought, “I can make this work.”
When I came back from orientation, I started thinking about paying for college. Neither of my parents went to college and they don’t speak English so they don’t understand how things work.
During the first week of July, I went to Wells Fargo with my dad to apply for a private student loan. The loan officer asked my dad and I questions regarding my parents’ and my credit history, employment info and debts. She came back 10 minutes later and told us our request for a collegiate loan was denied because our household income was too low.
As Ms. Ly explains it, the grants and loans offered in her financial aid package only covered 70 percent of the $42,000-a-year cost of attending the university. “Each semester, I was expected to pay about $6,000,” she wrote.
She goes on to describe her efforts to find scholarships and loans and ultimately, her phone call telling the university she could not afford to attend.
After I told them of my decision, I felt sad and empty, like my life had just been paused. My college dreams were put on hold.
Now I live at home and attend East Los Angeles College. I’m tired because I work during the day and my classes are at night. After community college, I plan on transferring to Humboldt State or another four-year school to get my bachelor’s degree in psychology or administration of justice.
I’m disappointed I’m not at U.N.H. this fall. I was really looking forward to moving out and living the college life. Yet at the same time I understand that the economy makes it harder for people to get loans because banks are not willing to take risks giving them out right now.
Source
Monday, February 15, 2010
Explore options before defaulting on student loans
Federal student loan default rates are on the rise, but there's no need even in this weak economy for you to fall into arrears.
That's because when it comes to repaying an education loan, no one - except maybe Mom or Dad - is more lenient than Uncle Sam.
Can't find a job? Or the one you have barely pays the bills? Maybe you have decided to go back to school to wait out the recession.
Whatever...
Source
That's because when it comes to repaying an education loan, no one - except maybe Mom or Dad - is more lenient than Uncle Sam.
Can't find a job? Or the one you have barely pays the bills? Maybe you have decided to go back to school to wait out the recession.
Whatever...
Source
Thursday, January 28, 2010
Thousands still waiting for student loans
Almost three months since they began their studies, thousands of students are still waiting for loans from the Student Loans Company (SLC).
More than 100,000 students were left without cash when they began the term in September because their loans had not come through.
The delays, which began in the summer, were due to widespread processing problems.
SLC lost paperwork and failed to put students' data into its systems. Many universities have had to offer hardship funds to help the most cashstrapped students.
About 60,000 loans have yet to be paid although SLC says the majority of these are where applicants have not supplied all the relevant information.
The figures also include courses that have yet to start and students who may have been accepted for a loan but then decided not to go to university.
Becky Leeman, 18, from Norwich, contacted Financial Mail to say she still has not received her loan, even though she applied four months ago.
Despite contacting SLC regularly for updates on her application, Becky says there have been several problems, including SLC losing her birth certificate.
'Luckily my mum had a second birth certificate from the registrar so I have posted it again, by recorded delivery this time,' says Becky.
'But I have been told it will take about another 30 days to process this information. It's very frustrating.
'I've had to borrow off my mum to help towards my living costs and at this rate I still won't have the money when I start university again after Christmas.'
Becky says that Hull University, where she is studying for a degree in law, has been understanding. But her tuition fees are now three months late.
'I'm not sure how much longer the university will allow me to delay,' says Becky. 'I'm starting to get worried. The SLC doesn't seem to be able to tell me exactly when I will get
the money in my account.'
A report commissioned by the Government into the delays at SLC was published earlier this month and found 'conspicuous failures'.
The report prompted management change at the company and a review of the application process. Applications for funding for next year were postponed while the problems were rectified.
SLC says it has sorted out its processing issues and that applications for funding for 2010-11 should be smooth.
A spokeswoman says any student still waiting for their money for 2009-10 should contact SLC on 0845 300 50 90 quoting their reference number as extra information may be required to process the application.
Source
More than 100,000 students were left without cash when they began the term in September because their loans had not come through.
The delays, which began in the summer, were due to widespread processing problems.
SLC lost paperwork and failed to put students' data into its systems. Many universities have had to offer hardship funds to help the most cashstrapped students.
About 60,000 loans have yet to be paid although SLC says the majority of these are where applicants have not supplied all the relevant information.
The figures also include courses that have yet to start and students who may have been accepted for a loan but then decided not to go to university.
Becky Leeman, 18, from Norwich, contacted Financial Mail to say she still has not received her loan, even though she applied four months ago.
Despite contacting SLC regularly for updates on her application, Becky says there have been several problems, including SLC losing her birth certificate.
'Luckily my mum had a second birth certificate from the registrar so I have posted it again, by recorded delivery this time,' says Becky.
'But I have been told it will take about another 30 days to process this information. It's very frustrating.
'I've had to borrow off my mum to help towards my living costs and at this rate I still won't have the money when I start university again after Christmas.'
Becky says that Hull University, where she is studying for a degree in law, has been understanding. But her tuition fees are now three months late.
'I'm not sure how much longer the university will allow me to delay,' says Becky. 'I'm starting to get worried. The SLC doesn't seem to be able to tell me exactly when I will get
the money in my account.'
A report commissioned by the Government into the delays at SLC was published earlier this month and found 'conspicuous failures'.
The report prompted management change at the company and a review of the application process. Applications for funding for next year were postponed while the problems were rectified.
SLC says it has sorted out its processing issues and that applications for funding for 2010-11 should be smooth.
A spokeswoman says any student still waiting for their money for 2009-10 should contact SLC on 0845 300 50 90 quoting their reference number as extra information may be required to process the application.
Source
Friday, January 15, 2010
Student debt is crippling
As the amount of debt college students take on from student loans continues to rapidly escalate, one commonly overlooked result is what that debt will do to the economy.
According to a September story in The Wall Street Journal, U.S. Education Department figures show that today two-thirds of college students borrow to pay for college, and their average debt load is $23,186.
A dozen years ago, 58 percent of students borrowed to pay for college and the average amount borrowed was $13,172.
During a Wednesday stop in Salina, Fort Hays State University President Edward Hammond noted that in this school year, for the first time in the state's history, the amount of money the state contributes to higher education was surpassed by what students pay in tuition.
The implications of this are ominous, Hammond noted. Higher student loan payments mean that graduates won't be able to buy cars, houses and a variety of other things that help spur the economy.
Hammond says colleges have a number of options, including limiting access to colleges, cutting their budgets, increasing class sizes, and drastically increasing tuition -- none of which he supports.
His preferred solution, as noted in Thursday's story by Journal reporter Michael Strand, is to rework the state's tax structure, including the elimination of all sales tax exemptions.
We'll leave it to our legislators to decide if that solution would work, but it's clear that Hammond is right about a couple of things: The old education model in Kansas is broken and we can't keep crippling the economy by shifting the cost of higher education onto the backs of students and their parents.
"All it's (paying off student loan debt) doing is taking money from our economy in the future. I don't expect kids to understand that -- but lawmakers should," Hammond said.
Source
According to a September story in The Wall Street Journal, U.S. Education Department figures show that today two-thirds of college students borrow to pay for college, and their average debt load is $23,186.
A dozen years ago, 58 percent of students borrowed to pay for college and the average amount borrowed was $13,172.
During a Wednesday stop in Salina, Fort Hays State University President Edward Hammond noted that in this school year, for the first time in the state's history, the amount of money the state contributes to higher education was surpassed by what students pay in tuition.
The implications of this are ominous, Hammond noted. Higher student loan payments mean that graduates won't be able to buy cars, houses and a variety of other things that help spur the economy.
Hammond says colleges have a number of options, including limiting access to colleges, cutting their budgets, increasing class sizes, and drastically increasing tuition -- none of which he supports.
His preferred solution, as noted in Thursday's story by Journal reporter Michael Strand, is to rework the state's tax structure, including the elimination of all sales tax exemptions.
We'll leave it to our legislators to decide if that solution would work, but it's clear that Hammond is right about a couple of things: The old education model in Kansas is broken and we can't keep crippling the economy by shifting the cost of higher education onto the backs of students and their parents.
"All it's (paying off student loan debt) doing is taking money from our economy in the future. I don't expect kids to understand that -- but lawmakers should," Hammond said.
Source
Monday, December 28, 2009
Wyoming’s Largest Student Lender to Stop Making Student Loans
Nonprofit Wyoming Student Loan Corp., the state’s largest student loan lender, has announced that, as of April 1, 2010, it will no longer be issuing any new parent or student loans.
In a statement from president and CEO Phil Van Horn, the company, also known as WyoLoan, said that it will continue to fund any student loans that are already approved for the current 2009–10 academic year and for which all loan proceeds will disburse by March 31, 2010 (WyoLoan announcement of student loan suspension, Oct. 20, 2009).
“WyoLoan is making this announcement at this time so that any student who has applied or who may apply for a loan and for which funds would be released after March 31, 2010, can make other arrangements through their respective school financial aid offices,” the statement reads. “At the present time, we estimate the number of students who will have to resubmit applications to be less than two dozen.”
The company will also continue servicing its current 25,000 customers who already hold student loans, which total $350 million, The Associated Press reported (“WyoLoan to Stop Making Student Loans,” Oct. 30, 2009).
In the lender’s 30-year history, the company website says, WyoLoan has issued over $1 billion in education loans to more than 75,000 students and parents.
Congress Considers the End of the Road for Student Loan Lenders
The company’s decision comes in response to proposed federal legislation moving through Congress that would put an end to the federal student loan program known as FFELP (Federal Family Education Loan Program), which allows private third-party lenders like WyoLoan to issue government-backed student loans.
Currently, the government pays these private FFELP lenders a subsidy for the federal parent and student loans they originate. A second federal student loan program — the Federal Direct Student Loan Program, begun in 1992 — issues federal student loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender.
Under the proposed legislation, known as the Student Aid and Fiscal Responsibility Act (H.R. 3221), all federal parent and student loans would become Federal Direct loans, issued directly to borrowers through the government rather than through third-party FFELP lenders — effectively putting most private lenders like WyoLoan out of business.
President Obama has been a vocal backer of the SAFRA bill, maintaining that FFELP subsidies funnel government money to banks and away from students. Supporters claim that the elimination of FFELP subsidies will generate $87 billion in savings to taxpayers over the next decade.
Critics, however, dispute this savings figure and say that the legislation amounts to a government takeover of student loans, stripping students of their right to choose their own lender.
Wyoming’s congressional delegation has come out alongside WyoLoan against the SAFRA bill.
The bill was approved by the House of Representatives on Sept. 17 and now awaits a Senate vote.
Should the measure fail to pass, Van Horn said, WyoLoan will consider lifting the suspension of its student loan program.
In a statement from president and CEO Phil Van Horn, the company, also known as WyoLoan, said that it will continue to fund any student loans that are already approved for the current 2009–10 academic year and for which all loan proceeds will disburse by March 31, 2010 (WyoLoan announcement of student loan suspension, Oct. 20, 2009).
“WyoLoan is making this announcement at this time so that any student who has applied or who may apply for a loan and for which funds would be released after March 31, 2010, can make other arrangements through their respective school financial aid offices,” the statement reads. “At the present time, we estimate the number of students who will have to resubmit applications to be less than two dozen.”
The company will also continue servicing its current 25,000 customers who already hold student loans, which total $350 million, The Associated Press reported (“WyoLoan to Stop Making Student Loans,” Oct. 30, 2009).
In the lender’s 30-year history, the company website says, WyoLoan has issued over $1 billion in education loans to more than 75,000 students and parents.
Congress Considers the End of the Road for Student Loan Lenders
The company’s decision comes in response to proposed federal legislation moving through Congress that would put an end to the federal student loan program known as FFELP (Federal Family Education Loan Program), which allows private third-party lenders like WyoLoan to issue government-backed student loans.
Currently, the government pays these private FFELP lenders a subsidy for the federal parent and student loans they originate. A second federal student loan program — the Federal Direct Student Loan Program, begun in 1992 — issues federal student loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender.
Under the proposed legislation, known as the Student Aid and Fiscal Responsibility Act (H.R. 3221), all federal parent and student loans would become Federal Direct loans, issued directly to borrowers through the government rather than through third-party FFELP lenders — effectively putting most private lenders like WyoLoan out of business.
President Obama has been a vocal backer of the SAFRA bill, maintaining that FFELP subsidies funnel government money to banks and away from students. Supporters claim that the elimination of FFELP subsidies will generate $87 billion in savings to taxpayers over the next decade.
Critics, however, dispute this savings figure and say that the legislation amounts to a government takeover of student loans, stripping students of their right to choose their own lender.
Wyoming’s congressional delegation has come out alongside WyoLoan against the SAFRA bill.
The bill was approved by the House of Representatives on Sept. 17 and now awaits a Senate vote.
Should the measure fail to pass, Van Horn said, WyoLoan will consider lifting the suspension of its student loan program.
Tuesday, December 15, 2009
A regrettable proposal for student loans
Health care isn't the only system on the verge of being overhauled. Federal student loans, which six out of 10 families rely on to pay for college, could soon see their most dramatic changes since 1965. Given the stakes, it would be wise for policymakers to heed some of lessons found right here on these pages.
Since February, the Star Tribune's "Streamlining Minnesota" series has examined ways to achieve a more efficient public sector. Its blend of ambitious goals, idealism and pragmatism could teach national policymakers a thing or two.
A plan is now before Congress to eliminate the Federal Family Education Loan (FFEL) Program, which serves 90 percent of Minnesota schools. Replacing it would be the Federal Direct Loan Program, which come July 1 would be the only federal student loan program.
It's truly unfortunate that the proposed Student Aid and Fiscal Responsibility Act hasn't been subjected to the kind of evidence-based analysis advocated by "Streamlining Minnesota." Had it been, a strong case would have been made for preserving a program model based on consumer choice and borrower service.
Take two principles advanced in an article from March:
First, focus on results, not dollars. "The bottom line of government isn't dollars," Public Strategies Group cofounder Babak Armajani said. "It's results per dollar."
Yet it's exactly the dollars that have most influenced the thinking on the FFEL elimination proposal. Too many have been unduly swayed by the government's claims of gargantuan (read unrealistic) cost savings from eliminating the program.
Source
Since February, the Star Tribune's "Streamlining Minnesota" series has examined ways to achieve a more efficient public sector. Its blend of ambitious goals, idealism and pragmatism could teach national policymakers a thing or two.
A plan is now before Congress to eliminate the Federal Family Education Loan (FFEL) Program, which serves 90 percent of Minnesota schools. Replacing it would be the Federal Direct Loan Program, which come July 1 would be the only federal student loan program.
It's truly unfortunate that the proposed Student Aid and Fiscal Responsibility Act hasn't been subjected to the kind of evidence-based analysis advocated by "Streamlining Minnesota." Had it been, a strong case would have been made for preserving a program model based on consumer choice and borrower service.
Take two principles advanced in an article from March:
First, focus on results, not dollars. "The bottom line of government isn't dollars," Public Strategies Group cofounder Babak Armajani said. "It's results per dollar."
Yet it's exactly the dollars that have most influenced the thinking on the FFEL elimination proposal. Too many have been unduly swayed by the government's claims of gargantuan (read unrealistic) cost savings from eliminating the program.
Source
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