Student loan reform signed into law

President Obama has signed into law the student loan reform that was attached to the health care bill. It’s a huge triumph against bank lobbyists and a significant victory for students who have been victimized by aggressive loan techniques used by the banks that are similar to the tactics they used for credit cards. Millions of young Americans are saddled with debt with onerous interest rates and penalties.

The new law is also a victory for taxpayers who no longer have to subsidize bankers preying on students.

The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students and use much of the nearly $68 billion in savings over 11 years to expand Pell Grants and make it easier for students to repay outstanding loans after graduating. The law also invests $2 billion in community colleges over the next four years to provide education and career training programs to workers eligible for Trade Adjustment aid.

The law will increase Pell Grant grants along with inflation in the next few years, which should raise the maximum grant to $5,975 from $5,550 by 2017, according to the White House, and it will also provide 820,000 more grants by 2011. Including money from last year’s stimulus program and regular budget increases, the White House said Mr. Obama has now doubled spending on Pell Grants.

Students who borrow money starting in July 2014 will be allowed to cap their repayments at 10 percent of their income above basic living requirements, instead of 15 percent. Moreover, if they keep up their payments, they will have any remaining debt forgiven after 20 years instead of 25 years – or after 10 years if they are in public service, such as teaching, nursing or serving in the military.

Mr. Obama portrayed the overhaul of the student loan program as a triumph over an “army of lobbyists,” singling out Sally Mae, which he said spent $3 million to stop the changes. “For almost two decades, we’ve been trying to fix a sweetheart deal in federal law that essentially gave billions of dollars to banks,” he said. He said the money “was spent padding student lenders’ pockets.”

Hopefully this will enable more Americans to chase the American Dream.

Learning to be an entrepreneur

Is the life of an entrepreneur for everyone? Probably not, as it can be rather demanding and it’s hard to imagine living that life unless you have a passion for business or for the service or product you choose.

The next question involves whether you can learn to be an entrepreneur. Some people may want to do it, but they really aren’t prepared to make a successful go of it.

The subject of entrepreneurship is becoming very popular at business schools as this notion is being tested.

Twenty years ago teaching people how to start their own businesses was a sideshow at B-schools, of scant interest to future consultants and Wall Streeters. Today entrepreneurship education is everywhere. More than two-thirds of U.S. colleges and universities — well over 2,000, up from 200 in the 1970s — are teaching it, and they offer it to all comers: social workers, farmers, and even musicians. The field is thriving, but have we figured out yet the best way to teach this stuff? If not, are we at least getting better at it? And can you even teach someone to be an entrepreneur?

This makes perfect sense, as many entrepreneurs have a passion for their product but have little experience running a business, while many business professionals can’t grasp some of the risk assessments that entrepreneurs make every day. It’s amazing how spending your own money focuses the mind!

What’s taught in these courses?

By developing in students the proper attitude toward risk, for instance. Entrepreneurship isn’t about the love of living on the edge; that’s pure myth. “You’re all about de-risking your idea,” says Fairbrothers. He means one, identifying, unblinkingly, what could go wrong; and two, taking whatever steps necessary to slash the odds that it will. You do that by relentless learning — about your market, your customers, your competitors, and if you’re truly new at this, about the nuts and bolts of business.

If you take a close look at this proposition, you would thing that every business student should be required to take a course in entrepreneurship. Understanding risk is critical to any endeavor, and this notion should be drilled into every person in your organization, whether you’re simply a manager or an entrepreneur.

Tough time for jobs in California

Forbes has several articles asking tough questions about the job market in California. The sad truth is that California is losing jobs to other states and other countries, as the high tax burden and cost of living makes it difficult for employers to commit to the state.

Now, you have to take into account the agenda at Forbes. While the business magazine is excellent, the ideological bent is very clear. The publication favors free markets and loathes taxes. While you would expect that from most business writers and publications, Forbes sometimes takes that to an extreme.

That said, they often make compelling arguments when presenting cases where business development is hindered by taxes and regulation, and California has become the poster-child for many of these problems.

In one provocative article, a Forbes writer argues that California is becoming more like France.

A friend of mine who is a successful venture capitalist shared a depressing observation over dinner recently: “California is like France,” he said. “I try not to hire here, and I certainly would not launch a company here. But the wine is good.”

*******

Listen up Sacramento, your tax base is moving elsewhere.

“California has competition,” says Mehta. This is starting to show. A report recently released by the Bureau of Labor Statistics shows Silicon Valley lagging. Tech employment fell nearly 17% between 2001 and 2008, while nationally those types of jobs grew 4%. Silicon Valley’s 11.8% unemployment level is higher than the nation’s.

“It’s a combination of taxes and talent,” says Mehta. “Taxes and expenses here are high, and we can get the talent or move it elsewhere. This wasn’t the case 10 years ago.”

Another article details how employers like McAfee are moving employees outside the state.

The dysfunctional nature of California politics is now catching up to the state. Meanwhile, other states are seizing the opportunity with incentives and other aggressive tactics to brings in jobs. Will California wake up?

Online resources for your business

Anyone can be an armchair entrepreneur these days. You can run so many aspects of your business through the Internet.

One area that makes a ton of sense is online printing. Remember the old days when you had to schlep back and forth to suppliers like printers, or wait for proofs to arrive in the mail? Even recently many people used places like Kinko’s for simple stuff like their business cards.

Now, you can do everything online, from laying out your printed product to seeing the final proof. With many vendors you can do the whole thing without needing to speak with a single person, though that is always an option as well.

One exercise you should do right away is to list all of the vendors you worked with in the last year. In each case, see if there’s an online alternative. I’ll bet you’ll be able to replace many of them with cheaper alternatives.

Naturally, there are times when personal relationships matter, along with reliability and quality. That said, you might be shocked by the price and convenience savings available, so at least you’ll have a point of reference for future negotiations.

Watching expenses with prepaid credit cards

If you have a small business, the thought of giving some of your employees a credit card for expenses can be terrifying. Sure, they may be trustworthy, but it becomes something you have to monitor, and sometimes the problem can get out of hand and you don’t catch it for months.

One solution would be to use prepaid credit cards for your employees. This way, you don’t have to worry about them exceeding the limit on the card, and it forces you to monitor the situation and pay attention to expenses.

In this economy, you need to use every tool at your disposal to monitor costs. Having your employees fill out reports isn’t enough, as you’re often too busy to look over them closely. With this system you can minimize mistakes.

Lessons from the king-sized success (and failures) of Donald Trump

People who want to learn about success often forget that many of these lessons are also about how to face gigantic problems and solve them. As Oscar Wilde famously said “Who are afraid to fail are afraid to succeed.” There is no better person to learn from than Donald Trump.

As a kid, Trump was obsessed with baseball to the exclusion of almost everything else so his parents had to send him to the New York Military Academy to sort him out. It worked and Trump pulled up his socks, graduating from one of the best business schools in the country, the Wharton School of business at the University of Pennsylvania. After an apprenticeship with his father, a successful real estate developer, Trump was ready to take off on his own. Trump has always thought big and told Millionaire Magazine “Always do something that you like, always do something that you enjoy doing, or you will never be successful. You will never be good at it,” However, it is Trump’s success in overcoming his gigantic problems that make him truly unique.

Trump made a multibillion dollar fortune only to see most of it wiped out in the real estate market crash. He was staring down the brink of the precipice with total debts of over $9.2 billion. His superlative negotiating skills and his astute business moves enabled him to recover. In his own words: “It’s always a great asset to be able to get along with people.” Over the years, despite some very tricky deals, I’ve generally been able to get along with people. You always have to let the other side think that they are also getting something out of the transaction. And, it’s often true that the best deals are the ones that everybody benefits from.”

Trump would be a winner anywhere, but he happened to choose the real estate business. He was also a master at using debt and keeping his options open. Certainly, one lesson you can learn from him on using debt is to investigate the use of elastic loans.

Keep your credit standing high

A credit standing has many advantages. In the first place, you will gain access to a whole range of sources of affordable debt who will welcome you as a customer. In the second place, you will be able to obtain the best possible terms and interest rates in the market because of your credit history. Finally, your credit score says much about you as a person so whether you are dealing with a landlord with a potential employer, your credit history will speak for you.

In the last few years of profligate lending, the easy availability of credit seduced many people into borrowing far more than they could afford to repay. For many of these people, debt consolidation is now being touted as a magic wand to waft all the problems away. Nothing could be further from the truth. Debt consolidation is a platform on which to reorganize your personal debt on a one time basis, but it cannot be a long-term fix, unless you are prepared to rein in the sort of spending that led to your problems.

If you would like to take control of your life, a debt consolidation is a good way to look at your personal debt and to reorganize it. If you are like the average American, the chances are that you will have debt outstanding on several credit cards and possibly some personal loans. All of these are high-cost debt because they carry a high interest rate. You should aim at obtaining one single debt consolidation loan to pay off all these bits and pieces and to provide you with a single monthly repayment. If you are in a position to use your home equity as collateral, you should be able to obtain this loan on favorable terms and conditions thus potentially saving you thousands of dollars in interest.

Finally, having regained control of your life, aim to keep it that way, and a lifelong high credit standing will follow.

HP EliteBook 2740p Touch-Enabled Convertible Tablet

HP has unveiled its first multi-touch tablet for business users with the HP EliteBook 2740 p. The laptop, which is convertible into a tablet, weighs only 3.8 pounds and has two optional displays. You can either choose a 12.1 inch diagonal 1280×800 LED display or an outdoor view display for use in natural light with low reflection and high contrast.

HP’s tablet is equipped with an Intel Core i7 or i5 processor and optional vPro management technology. It also offers Intel HD integrated graphics, up to 8GB of DDR3 memory, up to 320GB of hard drive space or up to 160GB of solid state drive storage, and an external DVD burner as an option.

The 2740p also incorporates a 2MP web camera, microphone, stereo speakers, a keyboard that is resistant to spills, two pointing devices (touchpad and pointstick), 802.11n Wi-Fi, Bluetooth, the optional HP un2420 EV-DO/HSPA mobile broadband module, Ethernet LAN, a 56k modem, three USB ports, ExpressCard and Secure Digital slots, Firewire and a VGA port.

HP confirms that the EliteBook meets the military standards for (MIL-STD 810G) vibration, dust, humidity, altitude and temperatures. The optional HP 2740 Ultra-Slim Expansion Base can be used as a dock for the notebook to connect with peripherals without needing to plug and unplug. This expansion base includes a DVD+/-RW drive, and an eSATA port, allowing for connection to an external RAID array, HDD and optical drives.

Since battery life is important for business users, you can opt for a six cell Li-ion prismatic battery with a battery life of five hours. You can combine this battery with a HP 2700 Ultra-Slim Battery and the total battery life will increase to 11 hours.

HP EliteBook 2740p, which runs on Windows 7.0, should be available in the US next month at a starting price of $1599.

For-profit college scams

You need to read this article from The New York Times if you’re considering going to a trade school or for-profit college.

One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools.

At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition exceeding $30,000 a year.

But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid. Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty. And the schools are harvesting growing federal student aid dollars, including Pell grants awarded to low-income students.

The article goes on to quote a woman who left her job with one of these schools as she became concerned with deceptive recruiting tactics.

It’s stunning to me that these schools are charging $20,000 to $30,000 per year. Unfortunately, it’s another example of good intentions gone bad and the fact that Congress is bought and sold every day. We want to help kids and adults pay for school to improve themselves and find a career, but with all that money comes a new industry that preys on people looking for a new option in life.

Be careful so you don’t end up in a situation where you’re loaded up with debt that you can’t pay back.

One option we should consider is limiting financial aid from the government to public colleges, non-profit schools and accredited private schools.

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