Data-driven prediction markets are turning to things like employee behavior, loan default rates, and credit card delinquency.
The prior estimates based on samples had understated loan default rates and overstated recoveries from loans in liquidation.
On average, managers now estimate that the loan default rate by principal amount will end 2012 at 1.8%.
The current student loan default rate is 8.8%, the highest on record.
Each Scorecard includes five key pieces of data about a college: costs, graduation rate, loan default rate, average amount borrowed, and employment.
These legal advantages for the collectors of student loan debt have resulted in an unprecedented 80% recoupment rate for every defaulting student loan default.
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After all, the loan default rate by principal amount was tracking to 0.21% in March, just off its near-record low reading of 0.17% at year-end.
Bankruptcy filings by Hawker Beachcraft and Bicent sent the loan default rate to a 9-month high of 56 bps in April from 21 bps in March.
FORBES: May 2012, US Leveraged Loan Market Trends and Analysis
The interactive College Scorecard gives students and families five key pieces of data about a college: costs, graduation rate, loan default rate, average amount borrowed, and employment.
The government wariness of for-profit colleges is not without merit, as dropout rates and student loan default rates among their graduates are far higher than at traditional universities.
The loan default rate was steady at 21 bps in February, not far from its near record low of 17 bps at yearend and well inside the historical average of 3.5%.
FORBES: March 2012, US Leveraged Loan Market Trends and Analysis
The for-profit sector has been tarnished by minimal admission standards, low rates of degree completion, and high loan default rates, hardly the kind of brand association a world-renowned university would seek out.
Then the researchers look at how much debt students accumulate over their college careers, considering the four-year debt load for a typical student borrower (12.5%) and the overall student loan default rate (5%).
It turns out that every time FHA has a loan default but it gets modified into a new loan, then this loan is a success and hence not counted as a defaulted loan.
Before the credit crisis, they performed admirably as interest rates rose, but consider that those rate increases were generally moderate, broad economic conditions were robust, and all forms of loan default were pretty benign.
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According to their claims Countrywide initiated the Hustle program, or HSSL which stands for High-Speed Swim Lane, in 2007 just as loan default rates were rising and as Fannie and Freddie were tightening their loan purchasing requirements.
The reason: If a college's federal student-loan default rate surpasses 25% for three consecutive years, or 40% in a single year, it could lose eligibility for federal student aid for all students, according to the Department of Education.
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Despite the ongoing EBITDA expansion, the loan default rate has ticked up to 0.56% this year following bankruptcy filings and out-of-court reorganizations by Coach America , Tensar, Hawker Beechcraft, and Bicent, from a minuscule 0.21% at year-end.
The U.S. Education Department just announced that the national student loan default rate rose for the fourth year in a row and an Institute for Higher Education Policy study showed that only 37% of federal student loan borrowers actually made their payments without interruption over the past five years.
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As they put it, the student loan system, is a mess because, at its current rate, aggregate student debt is doubling every seven years (and growing much faster than other forms of debt which traditionally dwarfed student loans), student loan default rates are rising, and a large portion of student borrowers is in poor financial shape, even after graduating from college.
That accounts for the low graduation rates and higher loan-default rates, the industry says.
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Switching gears, the loan market default rate inched down to 1.4% in February and remains well inside the historical average of 3.3%.
This heavy burden of debt, combined with a troubling job outlook, has led to an understandable rise in student loan debt default rates.
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Paired with that would be a prohibition on a mortgage lender from declaring a loan in default if an installment plan has been obtained.
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Switching gears, the loan market default rate inched up to 1.4% in January from 1.3% at yearend, though remains well inside the historical average of 3.3%.
Because banks tend to be reluctant to extend credit to risky small businesses, the SBA operates a program that makes such loans more enticing to lenders by guaranteeing a portion of each loan against default.
Ex-Imp would guarantee the loan from default.
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Graduates from institutions within the Association of American universities, the 62 leading North American research universities, have far lower student-debt burdens and loan-default rates than graduates of the for-profit institutions that supposedly will end college as we know it.
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If a bank loan goes into default, it makes sense to write it off the books.
Mill Financial notified Gillett in August that the loan was in default.
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