Thoughts on SLM

[Chewie]

Sallie Mae to Cut Thousands of Jobs Due to President's Student Loan Overhaul

 

Thoughts?

[klas]

Sallie Mae to Cut Thousands of Jobs Due to President's Student Loan Overhaul

 

Thoughts?

 

That's OK - those job losses will be replaced with the 16,000 new IRS agents hired to confirm whether you buy medical insurance; you know, the ones that will withhold your tax refund in case you don't buy any, as per the new ObamaCare. So, all in all, a net gain in jobs! Woo!

[Eggbeater]

I have trouble having sympathy for a company that issued some predatory loans with such high interest rates to students to make a profit. I don't mind them making a profit, but I think their claim that they are doing students a huge favor is a bit far fetched.

[klas]

I have trouble having sympathy for a company that issued some predatory loans with such high interest rates to students to make a profit. I don't mind them making a profit, but I think their claim that they are doing students a huge favor is a bit far fetched.

 

My rates were 6-7%. I don't think those are high.

 

My question is who now is going to step into providing 'career training' loans to people, with SLM vastly reduced? SLM provided those types of loans to not just helicopter students. All those people, some that need to take courses to be an apprentice, are sh!t out of luck now.

[permison]

My rates were 6-7%. I don't think those are high.

 

My question is who now is going to step into providing 'career training' loans to people, with SLM vastly reduced? SLM provided those types of loans to not just helicopter students. All those people, some that need to take courses to be an apprentice, are sh!t out of luck now.

 

Supposedly the Federal Direct lending group will handle it. (http://www2.ed.gov/offices/OSFAP/DirectLoan/index.html) They already exist but in limited capacity. They already offer Gov. loans direct to the public. But no way they staff up in time for June 30th to support the load. This will be a clusterfrack for a while.

[klas]

Supposedly the Federal Direct lending group will handle it. (http://www2.ed.gov/offices/OSFAP/DirectLoan/index.html) They already exist but in limited capacity. They already offer Gov. loans direct to the public. But no way they staff up in time for June 30th to support the load. This will be a clusterfrack for a while.

 

This Direct Lending Group gives loans to schools that are not credited as educational institutions by the Dept of ED, such as helo schools? I searched that site & couldn't seem to find it addressed anywhere. (Not that I care, really, since I am done with the taking out of loans for training thing...)

[permison]

This Direct Lending Group gives loans to schools that are not credited as educational institutions by the Dept of ED, such as helo schools? I searched that site & couldn't seem to find it addressed anywhere. (Not that I care, really, since I am done with the taking out of loans for training thing...)

 

No, I only mention them because "SUPPOSEDLY" they are the ones who all loans will go through from now on. And from what I understand (which is very little according to some) you have to be an accredited place of higher education. So the only flight schools that should have access to government loans will be those either who are recognized by the U.S. Dept of Education (http://ope.ed.gov/accreditation/) or have partnered with a institution that has recognized accreditation.

 

This is sort of a slimy side of education. For example my brother attended Strayer University and wasted two years of his life and god knows how much money. When he moved for a job and tried to transfer credits he found out that Strayer credits would not transfer to his new college which was a accredited institute of high education but does not recognize Strayer Education. So now at the new school which is accredited he has to retake most of the classes he took at Strayer for his degree.

 

Maybe Fry will jump in here. He seems to have a good grasp on this stuff (as usual).

[fry]

No, I only mention them because "SUPPOSEDLY" they are the ones who all loans will go through from now on. And from what I understand (which is very little according to some) you have to be an accredited place of higher education. So the only flight schools that should have access to government loans will be those either who are recognized by the U.S. Dept of Education (http://ope.ed.gov/accreditation/) or have partnered with a institution that has recognized accreditation.

 

This is sort of a slimy side of education. For example my brother attended Strayer University and wasted two years of his life and god knows how much money. When he moved for a job and tried to transfer credits he found out that Strayer credits would not transfer to his new college which was a accredited institute of high education but does not recognize Strayer Education. So now at the new school which is accredited he has to retake most of the classes he took at Strayer for his degree.

 

Maybe Fry will jump in here. He seems to have a good grasp on this stuff (as usual).

 

Since you asked. The "slimy side of education" is only that if the student ignores the obvious because he doesn't want to hear it. Everyone knows...at least everyone who really wants to know...that for-profit "universities'" credits will usually not transfer to accedited educational institutions. That's because the for-profits' accelerated...i.e., one month...courses do not meet most universities minimum standards. Those for-profit degree mills are for people who want to put BS or MBA on their resurme, not for a real education...and most employers (although generally not the government employers) know that and do not give the credentials much credit.

 

Regarding the feds' direct loan program, you're right. The only change is going to be that the federal government will be making federally guaranteed student loans directly instead of through lenders like SLM. Those loans will continue to be, for the time being, under the same standards they have always been under ..to students attending accredited educational institutions...which does not include stand-alone flight schools. Private student loans will still be available through private lenders at high variable rates and with acceptable co-signors.

 

But, what will change as the feds grow into their new role is that loan standards for students will become much easier as long as the student is going to an institution blessed by the feds as worthy. The objective of this legislation is not to save money by cutting out the private lenders but rather to make much more loan money available. The feds will be virtually giving it away. This is why the smart flight schools are becoming associated with colleges...CCs and four year schools...,because it won't be too far in the future that the feds will be financing flight training.

[Eggbeater]

My rates were 6-7%. I don't think those are high.

 

My question is who now is going to step into providing 'career training' loans to people, with SLM vastly reduced? SLM provided those types of loans to not just helicopter students. All those people, some that need to take courses to be an apprentice, are sh!t out of luck now.

 

They were 6-7% for how long? Sallie Mae's loan rates are determined by the London Interbank Offered Rate (LIBOR) plus a certain percentage, which can oscillate anywhere from 3 to 15 %, and sometimes even higher. And their only consolidation option doesn't even fix an interest rate, it changes as well. Maybe not the worst thing out there, but having subsidized government loans opens your eyes up to the way things could be done better.

[klas]

They were 6-7% for how long? Sallie Mae's loan rates are determined by the London Interbank Offered Rate (LIBOR) plus a certain percentage, which can oscillate anywhere from 3 to 15 %, and sometimes even higher. And their only consolidation option doesn't even fix an interest rate, it changes as well. Maybe not the worst thing out there, but having subsidized government loans opens your eyes up to the way things could be done better.

 

I am aware that they adjust, but they have been anywhere from 6-7% for a long time. Plus, having great credit helps....

[Inferno]

When I looked into SM loans a year or so ago, even with great credit and a good cosigner, the lowest rate was 9%.... Maybe others had a different experience, but these were the figures on the brochure I had.

 

The lending market can't get any bleaker than it already is. I welcome a change.

I am aware that they adjust, but they have been anywhere from 6-7% for a long time. Plus, having great credit helps....

[klas]

When I looked into SM loans a year or so ago, even with great credit and a good cosigner, the lowest rate was 9%.... Maybe others had a different experience, but these were the figures on the brochure I had.

 

The lending market can't get any bleaker than it already is. I welcome a change.

 

Interesting - the last 2 loans I had through SLM were a few yrs ago & they were for 5.25% & 5.75% & without a co-signer. My rates range from 5.25-7.75. Their criteria is so over the board it is (or was) illogical.

 

I wonder what the highest rate someone is paying here.

[yzchopper]

One of my students used Sallie Mae when he trained at my flight school and his starting rate was 9% without a co-signer and in six months it dropped to 7.25%. He then borrowed the remaining amount he had originally asked for and got that at a rate of 6.50%. They dropped the 7.25% and consolidated his total loan into one at a rate of 6.25%. Sallie Mae would start you out at 9% or higher and after so many on-time payments then would lower your rates.

 

On another note I found out that Sallie Mae had like 280 flight schools that used them for their financing needs. Now there is only about 80 flight schools still using them. There is only one school in the northwest (Washington, Oregon, Idaho, Montana and Northen California) that is still using Salle Mae and that is Glacier Aviation out of Olympia, Washington. That is what my Sallie Mae rep told me and what I was told by the owner at Glacier Aviation.

[Jason Paterson]

Supposedly the Federal Direct lending group will handle it. (http://www2.ed.gov/offices/OSFAP/DirectLoan/index.html) They already exist but in limited capacity. They already offer Gov. loans direct to the public. But no way they staff up in time for June 30th to support the load. This will be a clusterfrack for a while.

 

Remember that these gov. student loans (direct loans) have very small caps on how much you can borrow. $9,500 is the maximum you can borrow for one year ("independent" student). Seems like a drop in the bucket for helicopter students. And when they say "independent" they really mean over 23 1/2. I haven't seen a dime from my parents since I was 18 and have not been claimed as a dependent to the IRS for several years but I'm still considered a "dependent" student.

[permison]

Remember that these gov. student loans (direct loans) have very small caps on how much you can borrow. $9,500 is the maximum you can borrow for one year ("independent" student). Seems like a drop in the bucket for helicopter students.

 

 

Oh I agree 1000% (yes I said one thousand percent). Hence the reason I think somewhere around 75% of the schools will go belly up just over a year from June 30th of this year. $9500 doesn't cover the lease on a R22 for 2 months never mind everything else that goes into running a flight program. Students are going to have a total of $9500 over a year. That's just not going to work. The math doesn't add up. And no one has really suggested other funding sources besides mommy and daddy or credit cards. I think most people will be stuck with things like the discover loan and I have heard of rates as high as 18%. How would you like to be paying 18% on $70,000.

 

I do know of one program just getting started that I think will be the saving grace of the training industry. But it's only one company. If it works it will change the whole landscape of flight training not just the funding part. But its a big if! There is a lot of work to do. I am sure they will be going public about it soon.

 

I wish other flight schools would be looking at new ways of doing things but sadly they just don't evolve. It's always "This is the way we've always done it, and this is the way we always will". Worst words one could ever utter. The next year and a half are going to be very rough on top of a already tough market.

[Chewie]

On another note I found out that Sallie Mae had like 280 flight schools that used them for their financing needs. Now there is only about 80 flight schools still using them. There is only one school in the northwest (Washington, Oregon, Idaho, Montana and Northen California) that is still using Salle Mae and that is Glacier Aviation out of Olympia, Washington. That is what my Sallie Mae rep told me and what I was told by the owner at Glacier Aviation.

 

What do you mean by only one school using Sallie Mae? Exclusively SLM loans accepted for training, or any method of payment including Sallie Mae loans accepted?

[yzchopper]

What do you mean by only one school using Sallie Mae? Exclusively SLM loans accepted for training, or any method of payment including Sallie Mae loans accepted?

 

My Sallie Mae rep told me that there is only one school in the Northwest that is using their student financing for helicopter training and that is Glacier Aviation in Olympia, Wa. She said that Sallie Mae had dropped all of the other helicopter flight schools in the Northwest. You now have to be a title IV school to be eligible to offer Sallie Mae loans to your students.

[Chewie]

My SLM money is still paying my way at Precision, as far as I know for some other students as well. When did that happen? Maybe I was grandfathered in since I've been there awhile. Though I've learned to not put much stock in anything Sallie Mae says sooo I wonder what the deal is.

[yzchopper]

My SLM money is still paying my way at Precision, as far as I know for some other students as well. When did that happen? Maybe I was grandfathered in since I've been there awhile. Though I've learned to not put much stock in anything Sallie Mae says sooo I wonder what the deal is.

 

My Sallie Mae rep told me in Jan. that they dropped like 200 out of 280 schools. If you have a loan already that is fine but they will not allow you to get another loan is what was explained to me.

[Chewie]

Ah I see now, new loans after x date for 200 schools are no more. Thanks for the clarification!

[RkyMtnHI]

I am home sick.. so you know you you folks are in trouble now!! :-)

 

I can shed a little light on the subject from what we know. We have students that have gotten new SM loans just recently. We also have a 100% success rate at helping our selected students get loans from other places. No we will not discuss this with everyone and have neglected to even bring it up as we helped one student get financing and he took the $$ to another school, also, we can't have people calling from out of state asking how to get the $$ as we just don't have time to help everyone, AND it's more complicated than that. Please read on..

 

Now, to answer your first question: "if you care about the students, and say that you want what's best for them, why do you care where they take their $$$?"

 

Herein lies the issues; a minor deal is that our guy spent about five hours with the student for no compensation.. they even did some of the work at the instructors home one evening. But more importantly, and the reason i am finally bringing all of this up, is that he represented that he would be training with us.. and then took most of the money to a school that has lost their credibility with financial institutions for a number of reasons which i will get into here later. When he gave the $$ to the other school it was promptly used to pay past due bills.. so, the $$ is really no longer available to the student. Some of the helos at this other school are on a cash only basis, that is, unless a credit card is provided before the flight, even tho the student has $$ "on account", he is limited to only the few ships that are not yet on a cash basis. So.. the student has trouble facilitating the completion of his certifications, everyone is fighting for time in one or two ships.. they go down for mx.. i could go on and on.. THEN, when this person doesn't complete his training in a timely manner, it reflects on US (because the lender thought he would train at our school). To what degree? I'm not completely sure, but any is too much as far as we are concerned... now, here comes the rest of the story...

 

There are reasons that some of the training institutions were dropped by SM and other lending sources. I am not saying this about all of them because i don't know all of the reasons, but I know of two incidences here in Colorado that hurt us all, and may not be repairable. There were two financial institutions that funded helicopter training, one east of us and one west.. i won't tell you their names but you can probably figure it out. When we first opened we contacted both of them for possible sources of funding for our students, we were told by one that they no longer did any helicopter training loans, and the other one said that they would no longer loan money to any flight school in Colorado. We found out over the next few weeks that another school had forged papers at one of the institutions to get extra money and got caught, and that they had called behind the students back at the other institution and had an additional $9000 sent directly to the school!!! In the second situation the student didn't find out for two months that he had "money on account"! When he expected his account to be getting low on funds he contacted the lender for more.. he was told about the $$ that was sent to the school a couple of months before!! Sounds unbelievable but it's true. So, not only will those lenders not service the offending school, but the rest of us suffer as well.

 

More: back to the stats; we are very careful to only help students with financing that we truly believe will make the grade.. not only here, but as they move on in the industry. Students that understand what they are getting into and that, in the unlikely event that they don't finish their training for what ever reason, have the ways and means and the drive to pay those loans off.. believe it or not, i even tell them to read Fry's posts.. they deserve to know the good and the bad. It's about them, and it's about us, all of us. I don't want a reputation with the loan companies for having students that don't complete their training or don't pay their loans back.. for any reason. It will reflect on us, and everyone else out there trying to do this right... period.

 

sooooo, if the school you are looking at cannot point you in the right direction.. there may be a reason for it. Look closely, and no matter what you do NEVER GIVE A FLIGHT SCHOOL A LOT OF MONEY!!!!

 

aloha,

 

dp

[ADRidge]

DP, the helicopter industry needs about 100 more guys like you.

[permison]

DP, the helicopter industry needs about 100 more guys like you.

 

Truer words were never spoken!

[RkyMtnHI]

DP, the helicopter industry needs about 100 more guys like you.

 

 

Truer words were never spoken!

 

 

u guys are too nice.. there's lots of em out there.. they are probably just too busy working to get on here!!

 

oh yeah, and the checks are in the mail!!

 

dp

[permison]

I went to a friend's house for family dinner on Easter Sunday. His brother (or brother in-law) was a banking industry consultant. He gave me some very encouraging news. Both Chase and BOA are working on continuing their student loan programs after the government backs out. He doesn't know the rates they will be offering but doubts they will be different from current rates. He works with the "C" level employees so he would be in the know. As Fry accredited to, this might only be for accreditied university programs but only time will tell. So it might not be all the doom and gloom like I thought earlier.