A new study found that student loans, despite their toxic reputation, helped recipients earn better grades, take more classes and graduate sooner, the Wall Street Journal reported. The study counters a drumbeat of bad news about student debt, which has nearly tripled in the last decade and been blamed for everything from hindering homeownership to damping the willingness to switch jobs or go to graduate school. The five-year research project, which followed 20,000 students at an urban community college, found that taking out loans averaging $4,000 enabled the students to work less and study more while also providing a cushion against emergencies. Student loans don’t need to be paid back while students are still in school. “I think having these resources provides a buffer against unexpected issues,” said Benjamin Marx, an economist of University of Illinois and co-author of the study, to be published today in Education Next, a journal of opinion and research put out by the Harvard University Kennedy School of Government. Marx and his colleague tracked 10,000 students who had been offered student loans via a letter from the school and 10,000 who hadn’t. Students who got offers in their letters were 40 percent more likely to take a loan. Those additional students who got loans earned 3.7 more credits per academic year than they would have if they didn’t take a loan.
Mall operators, eyeing defaults caused or made more likely by shuttered stores such as Sears Holdings Corp., are handing over their keys to lenders even before leases end, Bloomberg reported. That’s forcing loan-servicing companies to either take a shot at running the properties or sell them cheap. And if they’re unable to salvage the debt payments, investors in commercial mortgage-backed securities will take a hit. Last month, Washington Prime Group, a REIT, said that it gave up on two malls in Kansas whose loans had either defaulted or were headed for default, according to Deutsche Bank AG. And this month, Pennsylvania REIT announced it fled a mall in Wilkes Barre that had a loan headed for default, and it may abandon another in La Crosse, Wisconsin for the same reason. Read more.
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.
The already astronomical interest rates for payday loans in Utah are rising, to an average of 528 percent, with the highest rate topping a stunning 1,500 percent. Still, 1 of every 5 payday loan stores in the state closed in the past two years, the Salt Lake Tribune reported. That’s according to new annual data compiled by the state about the industry — portrayed by critics as a “debt trap” that can easily hook and financially drain the poor, but defended by lenders as a needed service for people with poor credit and few other loan options. The annual report by the Utah Department of Financial Institutions also has encouraging news about payday loan customers: They are borrowing less, and 1 in 8 now take advantage of state-mandated programs that allow them to enter into interest-free, extended-payment programs to avoid default.