Category Archives: Finance

Alexander’s Loan-Repayment Overhaul

Source: Andrew Kreighbaum, Inside Higher Ed, February 19, 2019

Proposal to automatically deduct loan payments as a share of borrowers’ paychecks promises big improvements but raises questions over some new complications, too.

Student advocates have for years complained about the complex set of options borrowers must navigate to repay their student loans. Student loan borrowers are faced with a dizzying nine repayment plans based on their income, in addition to a standard 10-year loan-repayment plan.

There’s a growing consensus that Congress should reduce those options to one income-based option on top of the standard plan.

Senator Lamar Alexander, the chairman of the Senate education committee, would go one step further, calling for loan payments to be automatically deducted from borrowers’ paychecks. ….

…. While the proposal to reduce the myriad repayment options for borrowers already has broad support among higher ed interest groups, getting buy-in for making student loan payments work more like payroll taxes is more uncertain.

Jessica Thompson, director of policy and planning at the Institute for College Access and Success, said streamlining the repayment plans available to borrowers is “an overdue change.” But she said paycheck withholding for loan payments is “in reality a lot more complicated than it sounds.” ….

Emerging Iterations on State Free College Policy in the 2019 Legislative Sessions

Source: Sarah Pingel, Education Commission of the States, January 31, 2019

State legislatures are officially in full swing, with 44 states plus the District of Columbia in session. At Education Commission of the States, we’re cleaning our glasses and diving into the thousands of pieces of education-related legislation spilling into our inboxes. Not surprisingly, free college maintains its position on state legislators’ minds. We are already tracking 45 pieces of legislation in 19 states plus the District of Columbia…..

Not-for-profit healthcare and higher education – US – New accounting standard for operating leases is credit neutral

Source: Rita Sverdlik, Lisa Martin, Lisa Goldstein, Diane F. Viacava, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, January 23, 2019
(subscription required)

New guidance from the Financial Accounting Standards Board (FASB) related to operating leases took effect January 1. Under the new standard, issuers will include the net present value (NPV) of operating leases on the balance sheet. This change does not affect issuers’ credit quality because our assessments already consider operating leases in a manner similar to the new FASB standard. However, in a few limited circumstances, the accounting change will affect issuers’ compliance with financial covenants in bond and bank agreements and temporarily elevate credit risk.

Health Care Providers’ Credit Quality To Suffer If ACA Lawsuit Ruling Is Not Overturned

Source: S&P Global Ratings, December 17, 2018
(subscription required)

Last week a federal judge in Texas struck down the Affordable Care Act as unconstitutional in a lawsuit brought by 20 state attorneys general. In S&P Global Ratings’ view, if this ruling is not overturned the credit quality of many health care providers, insurers, and states could be hurt….

When Political Mega-Donors Join Forces: How the Koch Network and the Democracy Alliance Influence Organized U.S. Politics on the Right and Left

Source: Alexander Hertel-Fernandez, Theda Skocpol and Jason Sclar, Studies in American Political Development, Advance Access, Published online: October 22, 2018
(subscription required)

From the abstract:
As economic inequalities have skyrocketed in the United States, scholars have started paying more attention to the individual political activities of billionaires and multimillionaires. Useful as such work may be, it misses an important aspect of plutocratic influence: the sustained efforts of organized groups and networks of political mega-donors, who work together over many years between as well as during elections to reshape politics. Our work contributes to this new direction by focusing on two formally organized consortia of wealthy donors that have recently evolved into highly consequential forces in U.S. politics. We develop this concept and illustrate the importance of organized donor consortia by presenting original data and analyses of the right-wing Koch seminars (from 2003 to the present) and the progressive left-leaning Democracy Alliance (from 2005 to the present). We describe the evolution, memberships, and organizational routines of these two wealthy donor collectives, and explore the ways in which each has sought to reconfigure and bolster kindred arrays of think tanks, advocacy groups, and constituency efforts operating at the edges of America’s two major political parties in a period of intensifying ideological polarization and growing conflict over the role of government in addressing rising economic inequality. Our analysis argues that the rules and organizational characteristics of donor consortia shape their resource allocations and impact, above and beyond the individual characteristics of their wealthy members.

Tracking Trump’s Conflicts of Interest – Details and news coverage of the Trump Family’s business and financial dealings

Source: Sunlight Foundation, 2018

This database is part of the Sunlight Foundation’s ongoing “Tracking Trump’s Conflicts of Interest” project, funded by the Lodestar Foundation. As we continue to learn about the First Family’s business holdings, this database will be updated. Learn more about the project or our methodology and download the data. Get involved and help with the updates by contacting us here.

CMS’s proposed changes to outpatient services, if finalized, would hurt hospital margins

Source: Diana Lee, Daniel Steingart, Jessica Gladstone, Jonathan Kanarek, Kendra M. Smith, Peter H. Abdill, Moody’s, Sector Comment, August 8, 2018
(subscription required)

On July 25, The Centers for Medicare and Medicaid Services (CMS) proposed several changes to the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System, which, if finalized, would generally be credit negative for both not-for-profit and for-profit hospitals. Changes include: (1) site neutral clinic visits, (2) expansion of 340B policy changes to off-campus departments of hospitals, and (3) adding certain nonsurgical procedures as covered procedures at ambulatory surgical centers. While on their own, these proposed changes would not be material to overall sector credit quality, the effects would vary by hospital. In general, the proposal to move certain cardiac procedures to ASCs, if finalized and if adopted by clinicians, would likely have the broadest and most significant effect on the hospital sector. Additionally, to the extent that commercial payors follow suit, each of these changes would have more meaningful effects…..

Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society

Source: Deborah Thorne – University of Idaho, Pamela Foohey – Indiana University Maurer School of Law, Robert M. Lawless – University of Illinois College of Law, Katherine M. Porter – University of California – Irvine School of Law, August 5, 2018

From the abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.

RAND Hospital Data Web-Based Tool

Source: RAND, 2018

From the summary:
Medicare-certified hospitals and other institutional providers are required to submit an annual cost report to a Medicare Administrative Contractor. Cost reports contain provider information such as facility characteristics, utilization data, cost and charges by cost center (in total and for Medicare), Medicare settlement data, and financial statement data. The Centers for Medicare & Medicaid Services (CMS) maintains the cost report data in the Healthcare Provider Cost Reporting Information System (HCRIS). The RAND Hospital Data tool is an effort to enhance CMS HCRIS data to make them more accessible and useful to a broad audience of academics, analysts, and hospital executives and their consultants. The tool provides users with data sets that are conveniently packaged and documented and that include value-added fields derived from HCRIS data, such as measures of occupancy and profitability. The goal of the tool is to make analytic tasks easier for those who work regularly with the data and to broaden the set of users.

How Does Last-Dollar Financial Aid Affect First-Year Student Outcomes? Evidence from the Bridging the Gap Study

Source: Keith Wardrip, Eileen Divringi, and Kyle DeMaria, Federal Reserve Bank of Philadelphia, Community Development and Regional Outreach, May 2018

This report examines the early impacts of a financial aid program that reduces or eliminates tuition and campus fee costs for lower- and middle-income New Jersey residents. The program boosted enrollment among lower-income students, improved students’ perception of college affordability, and reduced student financial stress. However, it is unclear whether first-year improvements in academic performance are attributable to the program.