Student loan forgiveness is a loan program offered to students who may want to eliminate their loans in exchange for taking up certain careers.
You will, however, find that a lot of students are not even aware of such programs.
There are various types of student loan forgiveness programs, therefore, it requires a bit of research first before you can apply.
Some of the most popular loan forgiveness programs are the following.
Most of these student loan forgiveness programs are supported by the Federal government.
If you take part in a federal program like Perkins or Stafford for example, then you will have part of your debt removed from the lender-records.
If you are a medical student who is working in a certain region or in a certain field that has got a specific medical shortage skill, then you may also qualify for this program.
These are only a few examples of some student loan forgiveness programs that you may need to know.
The program that you qualify for will depend on the program you are studying.
It is advisable to do some research first in order to make an informed decision.
What they don’t want you to know is that most default student loans are uncollectable.
An asset-backed security is a security whose value and income payments are derived from and collateralized (or “backed”) by a specified pool of underlying assets.
The pool of assets is typically a group of small and illiquid assets that are unable to be sold individually.
Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization.
This allows the risk of investing in the underlying assets to be diversified.
Each security will represent a fraction of the total value of the diverse pool of underlying assets.
The pools of underlying assets can include common payments from credit cards, auto loans, and mortgage loans, to esoteric cash flows from aircraft leases, royalty payments and movie revenues.
Learn about an asset-backed security.
The process through which an issuer creates a financial instrument by combining other financial assets.
Then marketing different tiers of the repackaged instruments to investors.
The process can encompass any type of financial asset and promotes liquidity in the marketplace.
Student loan-backed securities are a perfect example of securitization.
By combining mortgages into one large pool, the issuer can divide the large pool into smaller pieces based on each individual mortgage’s inherent risk of default, and then sell those smaller pieces to investors.
The process creates liquidity by enabling smaller investors to purchase shares in a larger asset pool.
Using the student loan-backed security example, individual retail investors are able to purchase portions of a student loan as a type of bond.
Without the securitization of mortgages, retail investors may not be able to afford to buy into a large pool of Student loans.
This process also converts a negotiable instrument into a non-negotiable instrument.
Curated from Education Center 2000
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