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In a statement, the Poway district pointed out that the bond issue was the fifth part of a plan to modernize the 24 oldest schools in the district, adding that while that bond "has a total repayment ratio of 9.3 times the principal amount," the overall borrowing program has a repayment ratio of just 4.2.
To put that into perspective, a 30-year mortgage at the same 6.8 percent interest rate would require $1.35 in lifetime interest payments for each dollar borrowed, or a repayment ratio of 2.35.
The legislation reduces the maximum maturity of capital appreciation bonds, so-called CABs, to 25 years from 40 years and limits a school district's repayment ratio to no more than $4 in interest and principal for every $1 borrowed.
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Under the new rules, programs would lose their eligibility to dispense federal student aid — and as a practical matter, be shut down — if, over the next four years, their graduates fail to meet new benchmarks for loan repayment and ratio of debt to income.
The bank's projected post-repayment capital ratios look sturdy enough, but credit losses remain high.
Last week, the Department of Education replied: "Plaintiff's assertion that… information on a program's repayment rate and debt-to-income ratios will not be meaningful to students, is nonsense".
That proposal curtails federal aid to vocational programs whose former students have a loan repayment rate of less than 35 percent or a high debt-to-income ratio.
A study of 600 MFIs indicated that MFIs' willingness to offer microinsurance is positively correlated to a rise in the financial expense ratio, loan repayments in arrears, years of operation, number of borrowers, woman borrower ratio, life insurance penetration ratio, and family size.
It proposes curtailing federal aid to vocational programs whose former students have a loan repayment rate of less than 35 percent or a high debt-to-income ratio.James Kvaal, deputy undersecretary of education, says loan repayment rates give a better picture of hardship than the traditional default rate.
The repayment rate is 99.04 per cent".
Its repayment rate is over 95%.
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