How the US government may be partly to blame for skyrocketing tuition

Students take a university entrance examination at a lecture hall in the Andalusian capital of Seville, southern Spain, September 15, 2009. Students in Spain must pass the exam after completing secondary school in order to gain access to university. REUTERS/Marcelo del Pozo (SPAIN EDUCATION SOCIETY)

#AceFinanceReport – Aug.04: Federal student loans may be causing college tuition to spike, according to a recent paper from the Federal Reserve Bank of New York.

Federal student loan limits changed in a few different ways from 2007-2011 that allowed students to borrow more money from the government, the New York Fed paper points out.

Average tuition also nearly doubled during this period, going from about $6,950 in 2001 to more than $10,000 in 2012 (prices given by the New York Fed in 2012 dollars).

The paper found that schools that were more reliant on federal loan subsidies disproportionately increased their sticker price tuition during this period.

Specifically, the New York Fed paper looked at three different types of student loans:

  • Subsidized loans, for students who demonstrate financial need
  • Unsubsidized loans, for students who don’t demonstrate financial need (these loans are more expensive than subsidized loans)
  • Pell Grants, which are based on financial need and do not have to be repaid

The New York Fed paper states that Pell Grants and subsidized loans raise “sticker price tuition of about 55 and 65 cents on the dollar, respectively.” Additionally according to the paper, unsubsidized loans raise tuition by 30%.

Below, you can see how tuition has risen as more federal student aid has become available:

College Tuition Federal Student Aid Chart

Check out the full New York Fed paper here >>

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Original Article: http://feedproxy.google.com/~r/businessinsider/~3/rENVj29–mk/federal-student-loans-may-cause-high-college-tuition-prices-2015-8

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Anyone on Social Security is probably about to get some bad news

Checkout Aisle Grocery Store

#AceNewReport – Aug.04: FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

A social security cost of living adjustment looks unlikely in 2016 (Investment News)

In October, the Social Security Administration will announce the cost of living adjustment for 2016. An increase is unlikely for 2016 and some earners at the higher end are likely to see benefits decrease as Medicare premiums continue to rise.

According to Investment News, it’s unlikely there will be a cost of living adjustment because of slowing inflation over the past year. This is likely to cause high-income retirees to see a drop in benefits because they aren’t protected from an increase in Medicare premiums.

Pimco received a Wells Notice (Bloomberg)

Pimco says it received a Wells Notice from the US Securities and Exchange Commission related to its disclosure over securities in its Total Return Bond Fund ETF. According to Bloomberg, the investigation is looking into “whether the total return ETF purchased small lots of bonds at discounts, then marked them up when valuing holdings to artificially boost returns.”

The ETF has gained approximately 20% since its inception in March 2012, outpacing the 12% gain the owners of the mutual fund have enjoyed over that time.

A company’s former CEO was indicted for murder and the stock is crashing (Business Insider)

Jerrod Menz, the former president of AAC Holdings has been indicted on a second degree murder charge along with three former employees and a current employee. The indictment stems from a 2010 death of a patient at American Addiction Centers, which AAC is the parent company to. According to a statement released by the company, “Defending ourselves against the indictment could potentially entail costs that are material and could require significant attention from our management.” The stock was down as much as 53%.

ETF use is growing among RIAs (Think Advisor)

The retail investor is finally warming up to the use of exchange traded funds. ETF assets jumped by $265 billion in the second quarter, accounting for an increase of 14%. According to Think Advisor, long-term mutual funds saw their total asset value increase just 6%.

Van Eck Global buys two ETFs (Financial Advisor)

Van Eck has announced the acquisition of the Yorkville High Income MLP ETF (YMLP) and the Yorkville High Income Infrastructure MLP ETF (YMLI). Terms of the transaction were not disclosed. Brandon Rakszawski, product manager at Van Eck Global, noted, “This presented us an opportunity to provide MLP exposure to our existing client base and shareholders of all levels.”


Original Article: http://feedproxy.google.com/~r/businessinsider/~3/dcAUbbzxrcA/financial-advisor-insights-august-4-2015-2015-8

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MARKETS:’ Stocks fall as Dow faces 4th day of losses; Apple sinks ‘

#AceMarketsNews Aug.04: Investors were looking ahead to Friday’s employment report for June and what the data will mean for the timing of a potential interest rate hike by the Federal Reserve.

Overseas, Greek stocks suffered a second day of losses as Greek banking stocks once again fell by around 30%, the daily limit.

The Athens Stock Exchange in Greece closed down 1.2% to 659.94 after being down as much as 4.9% in early trading Tuesday. That comes on top of the 16% drop on Monday.

Other European stock markets were mixed as Germany’s DAX rose 0.1%, France’s CAC 40 dropped 0.2% and Britain’s FTSE 100 was flat.

Asian stocks were slightly lower as weak Chinese manufacturing weighed on sentiment and investors looked to a U.S. jobs report later this week that could cement expectations for a Fed interest rate hike.

Japan’s Nikkei 225 index lost 0.1% while Hong Kong’s Hang Seng index lost 0.02%. China’s Shanghai Composite initially fell before recovering and closed up 3.7%.

U.S. stocks ended lower Monday as the price of oil tumbled below $46 a barrel.

http://www.usatoday.com/story/money/markets/2015/08/04/stocks-tuesday/31097771/

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MARKETS: Asian shares shake off losses, oil firms watch crude prices tumbling

#AceMarketsNews – Aug.04: TOKYO (Reuters) – Asian shares extended gains on Tuesday, shrugging off downbeat economic data overnight that had pressured Wall Street, focusing instead on a key U.S. jobs report that could give valuable pointers to the timing of the Federal Reserve’s planned interest rate increase.

Crude oil prices firmed after plunging overnight, with U.S. crude adding about 0.8 percent to $45.52 a barrel. Brent gained 0.3 percent to $49.66 after skidding 5 percent to six-month lows.

But financial spreadbetters expected subdued openings in Europe, with Britain’s FTSE 100 seen opening down by 25-30 points, or 0.3 percent lower. Germany’s DAX was seen opening down by 30-39 points, or 0.3 percent lower, while France’s CAC 40 was expected to open down by 20 points, or 0.4 percent lower.

“European equities are set to slip on the open,” Jonathan Sudaria, dealer at Capital Spreads, said in a note. “Overnight markets were a mixed bag with the U.S. down and Asia up, but Europe has decided to take its cue from the U.S.”

MSCI’s broadest index of Asia-Pacific shares outside Japan turned positive and extended gains late in the session as China shares rose, while Japan’s Nikkei stock index pared losses and ended down about 0.1 percent.

The Shanghai Composite Index rose more than 3 percent and the CSI300 index added 2.8 percent. Beijing has taken a raft of steps to support Chinese share markets after they lost more than 30 percent of their value since peaking in June, keeping investors cautious despite the gains.

“The market is still very volatile … investors are likely to be quiet and see what the next step of the government will be,” said Patrick Yiu, a director of CASH Asset Management in Hong Kong.

“The overall market momentum is not likely to pick up anytime soon and the economy in China is still very weak,” added Yiu.

U.S. equities markets stumbled overnight, after manufacturing data from China and the U.S. both disappointed.

The Institute for Supply Management’s index of national factory activity slipped to 52.7 in July, falling short of expectations that it would match last month’s reading of 53.5.

The weak reading, and fears of disinflation stemming from the rout in oil prices, led investors to pare bets that the Fed’s long-awaited interest rate hike will come as early as September.

Friday’s employment data is expected to show the U.S. economy created 225,000 new jobs in July, according to economists polled by Reuters. The unemployment rate is expected to hold steady at 5.3 percent.

“If we get some certainty about the strength of the U.S. economy and the likelihood of policy normalization by the Fed, and if a rate hike seems justifiable, that is positive for sentiment for global risk-on because a lot of people have been bracing for this,” said Stefan Worrall, director of cash equities at Credit Suisse.

The dollar edged down about 0.1 percent on the day against its Japanese counterpart to 123.90 yen, while the euro was slightly higher at $1.0958.

Commodity currencies stabilized after facing pressure from crude oil’s tumble.

The Canadian dollar edged up after earlier notching a fresh 11-year low of C$1.3176 per U.S. dollar. Canadian markets will reopen on Tuesday after they were shut for a public holiday on Monday.

The Australian dollar soared 1.2 percent to $0.7375, moving away from last week’s six-year low of $0.7234 after the Reserve Bank of Australia held its cash rate unchanged at a record low 2.0 percent as expected, and also toned down its calls for a weaker currency.

The Aussie also got a lift from Australian retail sales data, which showed a better-than-expected 0.7 percent rise in June, beating expectations of 0.5 percent growth.

Spot gold edged up about 0.2 percent to 1,088.06 per ounce, but remained not far from a 5-1/2-year low as expectations that the Fed is set to raise interest rates this year undermined the metal.

(Additional reporting by Hideyuki Sano in Tokyo, and James Pomfret and Donny Kwok in Hong Kong; Editing by Shri Navaratnam and Eric Meijer)

Asian shares shake off losses, oil firms

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MARKETS: #GREECE Greek banking stocks plunge again as debt crisis dominates

#AceMarketsNews – Aug.04: ATHENS (Reuters) – Greece’s banking stocks plunged for the second day in a row on Tuesday, dragging the main Athens index down and reflecting the country’s continuing financial and economic woes.

The banking index, comprising the four major lenders, was down 29.2 percent, virtually at its 30 percent daily limit for losses. It hit the limit on Monday.

The overall Athens General Index was down around 4 percent after opening higher. Some non-financial stocks gained. Gaming group OPAP was up 3.5 percent and Aegean Airlines (AGNr.AT> gained 2.7 percent.

No spillover was evident to other European markets. Many investors have cut their exposure to Greece and are focusing more on the state of core markets such as Germany and France.

The Athens index lost 16.2 percent on Monday, the worst fall on record, wiping out nearly 8 billion euros (5.62 billion pounds) of market value as investors worried about a new bailout from the European Union and reacted to Greece’s worsening economy.

Some believe the rout will soon end.

“The nearly 30 percent drop in early (banking) trades should attract buyers later in the session, helping the banking index balance out at higher levels than this,” said Takis Zamanis, chief trader at Beta Securities.

Trading in Athens resumed on Monday after being suspended for five weeks as part of capital controls imposed to stem a debilitating outflow of euros that threatened to cause a banking collapse and force the indebted country out of the euro zone.

Although Athens is in new bailout talks with its European Union partners the threat of political and economic instability remains.

The economy, meanwhile, has reversed course and is heading into recession again.

On Monday, a survey showed Greek manufacturing activity plunged to a record low as new orders plummeted and the three-week bank shutdown caused serious supply problems.

Greece’s economic sentiment also hit its lowest level in almost three years in July, a monthly report by the IOBE think tank showed.

(Reporting by George Georgiopoulos, Editing by Jeremy Gaunt and John Stonestreet)

Greek banking stocks plunge again as debt crisis dominates

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UK MARKETS: Earnings-day blues drags UK shares down

#AceMarketsNews – Aug.04: LONDON (Reuters) – Top UK shares opened on a downbeat note on Tuesday, with a mixed bag of corporate earnings and weakness in the technology sector offsetting reports of activist stake-building.

Earnings-day blues drags UK shares down

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