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Saturday, April 28, 2012

Even after bankruptcy, trapped by student debt


 

The trap of student debt _ even bankruptcy offers no path out under current law

 

The misfortunes that brought schoolteachers Devin and Sarah Stang and their four young children to bankruptcy — and the loss of their house and a car in the process — were their own unique story.
They bought the house at just the wrong time. There were heavy medical expenses when, at five months pregnant, she delivered stillborn twins. And their money woes go back further: When Sarah's college softball team pressured her to drop classes she wanted to take, she quit, lost her scholarship and had to make up the difference with loans. Devin, too, borrowed to get a master's degree. Then they struggled amid school layoffs near their Sandusky, Ohio, home.
Now, the Stangs just want a truly clean slate, financially. But even the ordeal of bankruptcy won't give it to them, and the reason is a common one: Much of their debt comes from private student loans.
Virtually any other kind of debt — including medical bills, mortgage, credit cards and car loans, even gambling losses— can be discharged in bankruptcy, allowing the "honest but unlucky" a chance to restore their footing through an arduous restructuring overseen by a court.
But under a 2005 law passed by Congress to protect lenders, private student loans fall under the same nearly-impossible-to-clear category as child support payments and criminal fines.
"It's a huge part of why the younger generations are here now," said the Stangs' bankruptcy lawyer, Matthew Barrett, whose busy office in Amherst, west of Cleveland, belies stories about the improving economy. He estimates half his clients have problems with student debt.
To advocates for student borrowers, the law is infuriating, counter-productive and — if intended to ensure lenders would be willing to make loans to students— demonstrably unnecessary. They see changing it as among the most effective, and least costly, ways to help those most seriously burdened by student debt, without giving a break to those for whom it's manageable.
Yet despite a voluble national conversation on student debt, the issue has gotten comparatively little attention.
At stops in three swing states this week, President Barack Obama is calling on Congress to head off a scheduled doubling in federal Stafford loan rates, from 3.4 percent to 6.8 percent. Changing that law could save more than 7 million new borrowers on average $1,000 a year, according to the White House. But this across-the-board benefit for current college students would do nothing for older borrowers already in trouble.
Acting without Congress, the Obama administration has implemented a series of protections for those pressed to pay back federal loans, such as income-based repayment and a public-service loan forgiveness program — steps lauded by advocates for borrowers.
However, the president appears never to have directly addressed a proposal by Sen. Richard Durbin, D-Illinois, to overturn the 2005 law on private loans. Treasury Secretary Timothy Geithner recently told Durbin the dischargeability proposal had "some merit" and that the administration wanted to work with him to expand the protections it has implemented for federal student loans into the private market. Regardless, the bill has little chance of passing the divided Congress in an election year.
"There's a special circle of bankruptcy hell for these kinds of debts," said Rich Williams, higher education advocate with the group US PIRG, which lobbies on student loan issues. "It's not that students are asking for extra protections. We're asking for the same protections entitled to every other form of consumer debt."
The Federal Reserve Bank of New York estimates 37 million Americans have student loan debt, totaling $870 billion. The average balance is around $23,000 (though that partly reflects a relatively small number of very large balances; the median is $12,800). Only 39 percent are paying down balances. An estimated 5.4 million borrowers have at least one student loan account past due.
Roughly 85 percent of outstanding student loan debt is owed to the federal government. The remaining 15 percent that's counted as private student debt is owed to various non-federal lenders, ranging from banks to loan companies like Sallie Mae Corp. to non-profits and state-affiliated agencies (under the Durbin bill, loans from any government-funded entity still wouldn't be dischargeable, only those from truly private lenders).
Generally, it's these private loans that bring borrowers to the door of bankruptcy lawyers like Barrett. Private student loans often lack the protections of federal ones, and have rates that typically start higher and can shoot up. A recent survey of bankruptcy attorneys found 81 percent reporting more clients with student debt in recent years, and roughly half reporting a significant increase.
Barrett says he's seeing more recent college graduates who couldn't get a job after graduation or who, if they did, faced garnishment of entry-level wages.
Before the 2005 law passed, lenders would "try to work with (borrowers) on a payment plan," Barrett says. "They had the threat, if we don't make it so this person can afford to live and eat and get to work and dress for work, then they're going to file for a bankruptcy plan and we're going to get hit.
"Now, they'll hit you with a garnishment — and if you can't make ends meet, tough."
Private lenders haven't always enjoyed a spot at the front of the line of bankruptcy creditors.
Until 1976, all education loans were dischargeable in bankruptcy. That year Congress began requiring borrowers to wait at least five years before they could discharge federal student loans. Since 1998, borrowers have been unable ever to discharge federal student loans, and in 2005 the then-Republican-controlled Congress made private loans almost impossible to discharge. Essentially, borrowers must prove they can't repay and will never be able to, but the standard is vague. And litigating in bankruptcy court may be impossible financially for someone in those circumstances.
With federal loans, the concern was that making it too easy to walk away from debts would put taxpayer dollars at risk.
With private loans, the lender protections were justified by fears that otherwise lenders wouldn't extend students the capital they needed to cover tuition bills. Student loans offer no security or collateral. Lenders are betting on a borrower's education to produce future earnings. Put differently, a bank can repossess your car but not your brain.
Changing the law "would force our members to raise borrower rates or elevate their already strict underwriting standards and essentially make it harder to make the loans," said a spokeswoman for the Education Finance Council, which represents nonprofit and state-based providers of non-federal loans, in a statement issued on behalf of president Vince Sampson. A Moody's report also suggested younger student borrowers might be especially tempted by an easier bankruptcy filing, not appreciating the long-term credit damage.
But such arguments swim upstream against a lot of historical data.
Before 1976, when student loans were dischargeable in bankruptcy, there's little evidence borrowers abused the practice. A federal study from that time estimated less than 1 percent of all matured student loans were discharged in bankruptcy.
Experts like Deanne Loonin of the National Consumer Law Center say bankruptcy is demoralizing, humiliating and difficult, and nobody undertakes it lightly.
"I wasn't raised to say, 'I'll go file bankruptcy,'" said Devin Stang, who is 41. The family's student debt totals $25,000 in federal loans and about $37,000 in private ones, much of it from taking required continuing education credits to keep up their teaching licenses and job prospects at a time of widespread layoffs.
Surrendering one of their two cars in bankruptcy will limit the Stangs' work options, Barrett says. And digging out will be even harder because, even after their other debts are clear, the private student lenders could garnishee up to 25 percent of wages.
If they could discharge their private loans in the same manner as credit card debts, "away we'd go on our lives," Stang said.
There's also little evidence that changing the law would affect the availability of private student loans. In fact, private student lending was expanding rapidly before 2005, when the loans were dischargeable. Then Congress awarded lenders stronger collection powers — but private student lending fell by two-thirds in just a few years, coinciding with the broader credit crunch.
A leading financial aid expert, Mark Kantrowitz of the website Finaid.org, doesn't buy the lenders' argument. He says changing the law might slightly increase fees, but lenders make their decisions based on credit scores and macro-economic factors.
Al Lord, the CEO of Sallie Mae., the largest private lender, which originated $2.7 billion in education loans last year, has predicted changing the law would affect the availability of credit for young people. But he said in a 2010 earnings call that the financial impact on Sallie Mae would be "small" and "not particular troublesome," in part because almost all its new loans — 85 percent at the time — have co-borrowers.
In a statement, Sallie Mae said the company would support reforms allowing students who have made a "good-faith effort" for five to seven years to discharge student loans in bankruptcy, but specified it would want the reform to apply to both federal and private loans (there's no proposal on the table to make federal loans dischargeable).
Even if changing the law did make private loans disappear, some advocates think that wouldn't be so bad.
In fact, new lending has already fallen sharply recently, and it hasn't kept people out of college; enrollment is way up. Students who might have gotten private loans five years ago, but can't now, are apparently choosing less expensive schools or borrowing more of what they need from the federal government, which accounts for more than 90 percent of new loan volume now.
A study by the Project on Student Debt, a foundation-supported research group, found that half of students who took out private loans in 2007-2008 failed to borrow their maximum eligibility in federal Stafford loans. Those students could have — and almost certainly should have — borrowed more from Washington first (undergraduates can cumulatively borrow up to $31,000 in federal Stafford loans, and in some cases, as much as $57,500). Now, they're doing so.
Finally, if the spigot of private loans cut off, it might temper college cost increases. Colleges would find it harder to get away with charging more than what students can borrow from the government.
"These private loans are toxic," said Williams, of the student advocacy group. If students still can't afford a college without one, he said, they should probably consider another college.

4 life lessons to learn from the Tea Bag






Did you know how the tea bag was born? The story goes that Thomas Sullivan, a tea merchant in New York created the tea bag -- almost by accident. He put some samples of his tea into exquisite silk bags and sent them to friends. One friend didn't bother to pull out the tea from the bag and just dunked it into hot water. He loved the tea. And an idea was born! It's probably true of a lot of great ideas around us. They were created by accident, not design. They came to life because someone dared to do something different. As you sip your next cup of tea, here are some lessons to take away from the humble tea bag. Here are four lessons to help make your life the perfect brew!

 1. What counts is what's inside the tea bag You will notice that some tea bags have very nice-looking labels, while others have very ordinary looking ones. Some have delicate silk tassels while others have ordinary strings. But here's the thing to remember: The quality of the beverage is determined by the tea inside the bag -- not by the label or the string. What's true for tea bags is true for all of us too. The titles, the clothes we wear and the cars we drive are like the label and the string. They may make you look nice. But what really matters is the kind of person you are, deep down within. Your beliefs and your attitude -- that's what defines the person you are. The tea masters know that to make a great drink, they need to focus on the tea. Not on the label and the string. Focus on being a good human being. Fix your attitude. Get your values right. And don't fret about the small stuff.

2. A tea bag must be porous Imagine you have the best tea leaves in the world. And you put it into a bag that's impermeable. It won't work. You just won't be able to make a cup of tea. For the tea bag to work, it needs to be porous. You need the tea leaves and the water to come in contact. In our lives too, we cannot survive and thrive in isolation. Be careful not to build a wall around yourself that prevents people from reaching out to you. You need to be able to touch other people too. Else, all that's inside of you will remain wasted -- untouched by all the good around you, and unable to impact all that's around you. The tea was meant to mingle with the water, Just as all of us were designed to work with other people, with teams, with society at large.

 3. The real flavor comes through only when the tea bag gets into hot water If you take a cup of lukewarm water and put a tea bag in it -- you won't know how strong the tea is. To get the best flavour, you need to put the tea bag into hot water. And then the real strength will show! Likewise, the true character of a person actually shines through in adversity. How does a person behave under pressure, when he is in 'hot water'? The hot water test is a good one -- to judge the quality of the tea, and the true character of human beings.

  4. Good tea bags look forward to hot water They know it will give them a chance to show their true worth. So next time you see a challenge, a tough situation, think like a tea bag and dive headlong into it. It may be the opportunity you've been waiting for to show what you are capable of. Some of us are so scared of the hot water that we stay away from it. Too scared of getting scalded? Afraid of failure?. Don't let that happen to you! Give yourself a chance to show the world what you are really all about! Next time you pick up a cup of tea, enjoy the moment. And think of the lessons too!

Sunday, April 22, 2012

Public Speaking


Here are some important public speaking tips to help you develop your skills and become far more effective as a public speaker.

  • Ensure your speech will be captivating to your audience as well as worth their time and attention. Videotape your presentation and analyze it. Emphasize your strong points during your presentation.
  • Present the desired image to your audience. Be solemn if your topic is serious. Appear relaxed, even if you feel nervous. Remember, you don’t look as nervous as you feel.
  • Establish rapport with your audience. If a microphone is available, adjust and adapt your voice accordingly.
  • Maintain sincere eye contact with your audience. If what you have prepared is obviously not getting across to your audience, change your strategy mid-stream if you are well prepared to do so.
  • Allow yourself and your audience a little time to reflect and think.
  • Check out the location ahead of time to ensure seating arrangements for audience, whiteboard, blackboard, lighting, location of projection screen, sound system, etc. are suitable for your presentation.
  • Tell audience ahead of time that you will be giving out an outline of your presentation so that they will not waste time taking unnecessary notes during your presentation.
  • Humour : Tell jokes if you’re good at telling jokes. If you aren’t good, it is best to leave the jokes behind. There’s nothing worse than a punch line that has no punch.
  • Tell stories : Stories make you a real person not just a deliverer of information. Use personal experiences to bring your material to life. No matter how dry your material is, you can always find a way to humanise it. Keep audience interested throughout your entire presentation. Remember that an interesting speech makes time fly, but a boring speech is always too long to endure even if the presentation time is the same.
  • Using Public Speaking Environment – Try not to get stuck in one place. Use all the space that’s available to you. If your space is confined (say a meeting room or even presenting at a table) use stronger body language to convey your message.
  • Mistakes – Mistakes are all right. Recovering from mistakes makes you appear more human. Good recovery puts your audience at ease – they identify with you more.

Saturday, April 21, 2012

Food frauds


8 Food frauds on your shopping list

By Kelli B. Grant, SmartMoney
Most consumers know to ignore emails alerting them to foreign lottery winnings and to steer clear of "designer" bags sold on street corners. But experts say even scam-savvy shoppers may be falling prey to fraud at a surprising place: the grocery store.
Food fraud -- the adulteration, dilution or mislabeling of goods stocked on the shelf -- is part of a growing trend of faux household goods . Although there is little data on the frequency of food fakery, experts say there's growing awareness of the problem. The lack of information on the subject recently prompted the U.S. Pharmacopeial Convention -- a nonprofit that sets standards used by the FDA -- to establish a Food Fraud Database. And a new study in the Journal of Food Science analyzed the top offenders identified by the database, including olive oil, milk and honey. "We're seeing similar trends in food to other items -- if it can be faked, it probably is," says Tara Steketee, the senior manager for brand protection at OpSec Security, an anti-counterfeiting consulting firm. "There are actually counterfeit tomatoes, believe it or not." (In that example, she says, garden-variety tomatoes get marketed as the more expensive heirloom ones.)
The growing number of imported foods consumed by Americans makes it harder to identify the frauds, experts say. A recent FDA-commissioned Institute of Medicine study found the quantity of imported foods and drugs nearly tripled over the past 10 years. Currently, imports account for 85% of seafood, 39% of fruits and nuts and 18% of vegetables. That leads to great variety, but also increased risk from less rigorous food safety practices in other countries, says Clare Narrod, the risk analysis program manager for the University of Maryland's Joint Institute for Food Safety and Applied Nutrition, who served on the committee preparing the Institute of Medicine study. Criminals may also re-route a problem product through other countries in an attempt to evade U.S. bans.
Food is also one of the easier products to fake because the distinctions from the real deal are often subtle. "The biggest challenge with food products is that they're natural, and there's an infinite number of variation in natural products," says John Spink, associate director of the Anti-Counterfeiting and Product Protection Program at Michigan State University, who authored the new Journal of Food Science study. Criminals are counting on shoppers not tasting differences between wines, and not noticing that their supposedly wild salmon isn't quite as pink as it should be when cooked. As more cooks experiment with high-end olive oils, artisanal meats and heirloom produce, passing off a cheap ingredient as its fancier counterpart grows more profitable, too.
Avoiding fakes comes down largely to being an informed shopper and buying from trustworthy sources. Branded products tend to have more supply-chain safeguards, says Narrod. "It's their reputation on the line, so they have things in place," she says. It can also help to buy products with shorter supply chains which tend to be local or minimally processed, Spink says. And if the taste of an item seems off, or you get sick, it's worth alerting both the store and the local public health department.
Because they're ingested, fraudulent foods carry more significant health concerns than other fakes. Consumers with allergies could have a reaction, says Amy Kircher, associate director of the National Center for Food Protection and Defense. Some substituted items aren't meant for human consumption, and others contain toxic ingredients like lead or melamine.
Here are eight foods researchers say shoppers may unwittingly buy fraudulent versions of.

Olive Oil

Accounting for 16% of the database's recorded cases, olive oil is the food most subject to fraud, according to the Journal of Food Sciences study. In most cases, experts say, consumers are merely getting a bad deal -- regular olive oil instead of pricier extra virgin, say, or a less expensive variety from Greece instead of Italy as the label proclaims. But in rare cases, varieties of non-food-grade oil may be added in, posing a health risk, Steketee says. In one of the more famous cases, more than 600 people in Spain died in 1981 after consuming "olive oil" that was actually a non-food-grade rapeseed oil intended as an industrial lubricant. She suggests sticking to brands you know and sources you trust.

Milk

Adulterated milk is typically watered down and then laced with melamine, which increases the protein content to hide the dilution, Spink says. "Consumers may consume the product and may not be aware of the quality variation," he says. In fact, milk is the second most common ingredient subject to adulteration, at 14% of cases in the U.S. Pharmacopeial Convention's Food Fraud Database. The 2008 Chinese milk scandal was the most high-profile incident, with the resulting outbreak killing six infants and sickening more than 300,000 consumers. Steketee says the problem is still more widespread abroad, with U.S. consumers needing to be more cautious about powdered milk and similar products of unknown origin.

Honey

The Journal of Food Sciences study pegged honey as a top fake, representing 7% of food fraud cases. Last year, Food Safety News tests also found that 75% of store honey doesn’t contain pollen. People are still buying a bee-made product, but all the pollen has been screened out, says Andrew Schneider, a food safety journalist who wrote the reports for Food Safety News. A lack of pollen makes it tough to determine its geographic origin -- and also means regulators don't recognize the product as honey, he says. Why the misdirection? Separate Food Safety News tests found a third of the faux honey imports from Asia were contaminated with lead and antibiotics. For the real deal, Schneider suggests buying from a local beekeeper. A National Honey Board spokesman says the group disputes the Food Safety News findings, and says regulations do allow for pollen to be filtered out as part of the removal of particles such as bee parts and other organic debris.

Fruit Juice

Fraudsters find it easy to dilute expensive juices without a notable change in taste or consistency, says Kircher. Orange juice represents 4% of cases in the U.S. Pharmacopeial Convention's Food Fraud Database, and apple juice, 2%. Consumers buying one of those common juices might get more water for their money, while an expensive one like pomegranate may be cut with apple juice. Consumers should be especially careful to read labels and pick a trusted brand when buying into the latest super-fruit craze, she says. It takes time to build up supply of a newly hot fruit, so those products are more likely to be adulterated.

Baby Formula

Although not a top offender in the Food Fraud database, experts say baby formula poses considerable food fraud risk. Formula is one of the most common targets for organized retail theft, and criminals often tamper with the sell-by codes to move expired product, Spink says. Adulterated milk, which can make it into formula, also poses a concern here, Steketee says. Parents' best bet, they say, is to buy from a major retailer rather than less-monitored venues such as flea markets and online auctions. And don't buy any package that has a blurred-out expiration date or otherwise looks tampered with, she says.

Spices

There's ample fraud opportunity in expensive goods that are purchased in small quantities and used in small doses as it's unlikely one's using enough to notice something isn't quite right, Spink says. Saffron represents 5% of food fraud cases and vanilla extract, 2%. Turmeric, star anise, paprika and chili powder each account for another 1%. Some are dangerous swaps, others, a waste of money. Shoppers buying paprika may be getting the flavorless leftovers of spices that have already been processed for extracts. Chinese star anise, for example, may be substituted with toxic Japanese star anise. Experts suggest being cautious about buying from markets or bulk bins without knowing the spice's origin.

Alcohol

Just a few weeks ago, a New York wine dealer was arrested for allegedly trying to sell rare -- but counterfeit -- wines for $1.3 million. Collectively, wines, spirits and liquors represent just 2% of cases in the USPC's Food Fraud database. Most faux wines are just a cheaper vintage and a bad bargain, but adulterated spirits are potentially more dangerous, says Steketee. Fake vodkas in particular have made the news in recent months, with contaminants such as anti-freeze and other dangerous chemicals. Counterfeiters are likely to focus most of their attention on the packaging, so consumers should keep an eye out for logos and bottles that don't look quite right, she says.

Fish

"It's easy to sell a piece of fish as one species when in reality it's another species," says Kircher. Farmed fish also get advertised as more expensive wild versions. Sometimes, it gets even more creative than a simple mislabel. Scallops, for example, might actually be punched out circles from a whitefish fillet, she says. Faux fish represented the top fraud in the Journal of Food Sciences study of media and other public records, at 9% of cases. And some may be unhealthy. A recent Consumer Reports study included a "grouper" sample that was really tilefish, a species that contains enough mercury to make the FDA's list of foods that pregnant women and young children should avoid. Experts suggest buying whole fish when possible which are harder to fake.

Thursday, April 5, 2012

Words of Wisdom

Generosity is giving more than you can, and pride is taking less than you need. In truth you owe not to any man.You owe all to all men.
 Reality has no continuity; it is from moment to moment,
ever new, ever fresh. What has continuity can never be creative.Reality is not to be spoken of; and
when it is, it is no longer reality..
Teach me to be like the ripe orange which, though crushed and bitten, fails not to impart
its innate sweetness..
 When negative thought such as hatred or anger are present, even a friend is seen as an enemy, but when all negative thoughts disappear even an enemy becomes a friend.
 The solution to the problem of suffering lies in understanding the Divine Will and having a vivid awareness of the divine purpose and being subservient
to serve this purpose.
 As compassion grows stronger so does the willingness to commit yourself to the welfare of all beings.
If you are able, you should help others. If you are not able you should at least not harm others...
 To realize the purpose of life in mundane world, one must know the character of our total environment as well as the purpose of life and must connect it with the needs of our human nature in its universal search for happiness..
 True love and compassion exists when the suffering of all others becomes unbearable – whether they be friends, mere acquaintances or even enemies.
 The desire to do harm, to hurt another, whether by a word, by a gesture, or more deeply, is strong in most of us;
 it is common and frighteningly pleasant. Inward turmoil drives us to seek outward protection; and the more one defends oneself, the greater the attack on others
 The ultimate objective of a learned man should be to know the truth but this could have been possible not only through the accumulation of knowledge but also through the implementation of that knowledge in practical life. There should be coordination between speech, understanding and knowing of an educated person.
 Reward and punishment exist only when there is no humility. Humility is not an end result of spiritual practices and denials. Humility is not an achievement, it is not a virtue to be cultivated. A cultivated virtue
is not the abnegation of the self, but a negative assertion of the self..
 I will conquer pride by humility, hate by love, excitement by calmness, selfishness by generosity, evil by good,
ignorance by knowledge, and restlessness by the peace of meditation on Thee..
 BEST REGARDS