New York Higher Education Loan Program for Students - NYHELPS

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New York Advanced education Credit Program for Understudies - NYHELPS. An option advance for New York understudies going to New York schools. Financing Issues in Advanced education . Families have less alternatives this year Unemployment in New York State has heightened Savings have dwindled

Presentation Transcript

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New York Higher Education Loan Program for Students - NYHELPS An option advance for New York understudies going to New York universities

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Financing Issues in Higher Education Families have less choices this year Unemployment in New York State has heightened Nest eggs have dwindled Home value has dropped Demand for "second looks" has expanded

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SUNY Unmet Need SUNY 4-Year First-Time Full-Time Freshman: Unmet Need (New York State Residents Only) Financially Dependent Student Unmet Need After Financial Aid $2835 $6965 $12,165 $12,680 Total Cost of Attendance

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Limited Private Options Many moneylenders have quit offering items previously, a 600 – 620 FICO would create credit qualification Now, most banks require no less than a 700 FICO Some loan specialists require in-school premium installment

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NYHELPs versus Also Loans NYHELPs is not intended to contend with PLUS More guardians have unfavorable credit Some guardians won't get to be borrowers Independent understudies

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Alternative Loans versus NYHELPs Alternative Loans - variable just, normal rates over 10%, high credit prerequisites; do understudies truly comprehend what they are getting NYHELPs - settled and variable choices, bring down costs, straightforwardness, credit get to

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Why NYHELPs Is Needed Bridges the crevice Students in all divisions have neglected need Not all families can get to Parent PLUS NY is one of only a handful few states without a state advance program There is a 2 billion dollar interest for option advances in New York State The private advance market is exceptionally costly Students ought to comprehend the commitment before they sign a P-note

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Key Features of NYHELPs Lower loan fees Fixed and variable rate advances Required online budgetary proficiency teaches the borrower Online advance examination and choice apparatus, in light of advance terms and rates Leverages a generally little state speculation

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More Key Features Lower FICO (endorsing will allow a story of 640) All NYHELPs are school ensured In-school installment of premium is discretionary Students may get for an earlier term

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How NYHELPs Works Borrower shops on HESC Student Loan Marketplace Selects advance item Fixed 7.25 - 8.5% +5% expense Variable LIBOR +4 - 5% + 5% charge If NYHELPs is chosen, borrower finishes a money related education module Borrower finishes P-note

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Cosigner Requirement In a credit based advance program, a trustworthy cosigner diminishes the loan cost With a cosigner an understudy is a great deal more inclined to be offered an advance

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NYHELPs Financial Literacy Online monetary proficiency course required This course will give: A powerful, electronic ordeal Learning ways utilized at the members possess pace Tracking through HESC

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NYHELPs Structure Uses private capital sponsored by a default save finance SONYMA issues securities up to ($350 million/year) Lender can hold advance or offer (settled advances) to SONYMA after advance is completely dispensed One servicer (advance stays with servicer) Borrower installments reimburse bondholders

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Purpose of Default Reserve Fund Reassures appraisals organizations Provides affirmation to moneylenders of the assurance Reassures bondholders Lowers loan costs to borrowers

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State Support Establishes Default Reserve Fund The default save pays cases to the holder of the advance as a screen The assets that make up the default save are the appointments from the State of New York ($50 million at first and $10 million in future years), all borrower charges, 1 percent school expense, and all default accumulations

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NYHELPs Fixed Rate Loan Lender advance aggregate designations decided Borrower looks for private advance on Student Loan Marketplace Borrower gets offers and chooses NYHELPs item State makes commitment to Default Reserve Fund SONYMA security deal; advance cost built up Borrower is coordinated to HESC monetary education module Borrower finishes module Borrower is coordinated to HESC's servicer to finish electronic Promissory Note Servicer gathers all required documentation from borrower and co-endorser Default Reserve Fund Servicer sends Certification Request (CR) to class through AltLoan Connection School confirms advance on the web or utilizing FAMS Updated CR came back to servicer by HESC Lender stores payment list through servicer Loan expenses sent to Default Reserve Fund Schools gets subsidizes through HESC Escrow EFT HESC charges school for 1 percent advance charge School pays 1 percent advance charge to add to default save finance Lender pitches advance to auxiliary market Lender holds advance Loan enters reimbursement Loan enters reimbursement Loan ponied up all required funds Loan forked over all required funds, down to the last cent Loan defaults Loan defaults SONYMA repaid Lender repaid HESC gathers on defaulted advance

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NYHELPs Provides Transparency NYHELPs may be offered in the HESC Student Loan Marketplace. Understudies can pick NYHELPs or other offered items Students will grasp credit terms before they sign P-note Students will see add up to cost of getting

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Your info is asked for HESC is drafting directions There will be an open remark period, notwithstanding you are welcome to send your remarks and worries to the nyhelps@hesc.org

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When Bond deals will start in October 09 Fixed rates will be resolved at the season of offer NYHELPs items ought to show up in the HESC Student Loan Marketplace in January 2010

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Questions?

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