What are the advantages and risks?
A) Read the heading and subtitle (here). What do they refer to?
Check your understanding of...
securitisation = creating tradable securities, such as bonds, that are backed by the income generated by an asset, a loan etc.
what's something worth = what's the value of something
to divest something = to take something away from someone
a foray = a sudden attack
a threshold = a starting point or figure
to be/ to have a debt = to owe money/ to be in a situation when you need to return borrowed money
tranches = portions of money
a mooted sale = a sale which is argued about
the chancellor of the exchequer = is a politician responsible for the British economy
a loan book = the complete value of the loans held by a bank or finance company
B) Now read the rest of the article and answers these questions.
1. According to the heading and subtitle, how many student's loans are being sold and what are they worth?
2. Why do the authors of the article use the expression to fire the starting gun?
3. Why will the securities be lower than the 4 billion loans figure?
4. What is the threshold of earnings for the graduate in debt?
5. Where is this student loans bond securitisation already used?
6. Why are the loans risky?
7. What do 9% and 0.25 refer to in the article?
8. Which financial organisations are involved and what are their responsibilities? 10. Why are the plans controversial?
11. Did Australia go ahead with its plan to securitise its student debts?
12. What does the UK chancellor of the exchequer hope to achieve from this scheme?
13. Will the sale of the debt affect students with loans?
14. Who is Sorana Vieru and what's her opinion on the sale?
15. Who is Martin Lewis and what's his opinion?
16. What's your opinion of the sale of student debt?
Send your comments to [email protected]
Check your understanding of...
securitisation = creating tradable securities, such as bonds, that are backed by the income generated by an asset, a loan etc.
what's something worth = what's the value of something
to divest something = to take something away from someone
a foray = a sudden attack
a threshold = a starting point or figure
to be/ to have a debt = to owe money/ to be in a situation when you need to return borrowed money
tranches = portions of money
a mooted sale = a sale which is argued about
the chancellor of the exchequer = is a politician responsible for the British economy
a loan book = the complete value of the loans held by a bank or finance company
B) Now read the rest of the article and answers these questions.
1. According to the heading and subtitle, how many student's loans are being sold and what are they worth?
2. Why do the authors of the article use the expression to fire the starting gun?
3. Why will the securities be lower than the 4 billion loans figure?
4. What is the threshold of earnings for the graduate in debt?
5. Where is this student loans bond securitisation already used?
6. Why are the loans risky?
7. What do 9% and 0.25 refer to in the article?
8. Which financial organisations are involved and what are their responsibilities? 10. Why are the plans controversial?
11. Did Australia go ahead with its plan to securitise its student debts?
12. What does the UK chancellor of the exchequer hope to achieve from this scheme?
13. Will the sale of the debt affect students with loans?
14. Who is Sorana Vieru and what's her opinion on the sale?
15. Who is Martin Lewis and what's his opinion?
16. What's your opinion of the sale of student debt?
Send your comments to [email protected]