Finance Space

Changes in the federal student aid program that took effect Tuesday will lessen interest rates for some students while increasing the amount they can borrow.

Among the biggest changes, the interest rate on new, subsidized Stafford loans to undergraduates drops from 6.8 percent to 6 percent. Subsidized Stafford loans are awarded to lower-income students, and the government picks up interest payments while students are still in school.

The rates are slated to continue to decline in stages over the next five years, part of congressional measures approved last year to increase student aid. Earlier this year, responding to the credit crunch, Congress also approved $2,000-per-year increases in what students can borrow from unsubsidized Stafford loans, which students can take out regardless of income.

Piling of debt burden has all the potential to create adverse financial situations. If timely and adequate steps are not taken to eliminate debt burden, it may lead to extreme financial situations like bankruptcy. For this reason only, consolidation of debt burden is gaining importance and popularity with the rise in debts and related incidents among the Britons. According to a recent survey, near about 40% of the Britons suffer from bad credit problems and debt piling.

BALTIMORE -

The Maryland Department of Business and Economic Development said investors began applying Tuesday for $6 million in biotechnology tax credits.

The program encourages investors to provide seed and early stage funding to qualified, privately held Maryland biotechnology companies. The department said the program has leveraged more than $24 million in private investment since it began in 2006.

The Maryland Biotechnology Investment Tax Credit program provides tax credits equal to 50 percent of an eligible investment. Companies must be less than 12 years old, headquartered in Maryland, employ fewer than 50 people and be certified by the state agency.

State officials have approved tax credits for NetJets Inc. and its sister company as the aviation business readies for a $200 million expansion in Columbus.

The Ohio Tax Credit Authority approved the tax credits for the New Jersey-based private aviation company, which are tied to creating and retaining nearly 2,800 jobs in the region. NetJets and FlightSafety International were awarded 75 percent credits for 15 years to help them expand their Columbus operations.

The four most dangerous words in investing are widely believed to be “this time it’s different.”

“But this time it is,” said Mohamed El-Erian, co-chief executive and co-chief investment officer of Pacific Investment Management Co. Pimco is the world’s largest bond fund company, with $812 billion in assets.

What’s different is the financial world has turned upside down, El-Erian told attendees at the 20th annual Morningstar conference in Chicago last week. Money managers must drastically shift their investment approaches to stave off financial disaster in the next few years.

The U.S. Small Business Administration has introduced two new online courses to help small business owners with basic principles of finance and borrowing.

The new courses are:

* “Finance Primer: Guide to SBA’s Loan Guaranty Programs” gives an overview of the SBA’s loan programs and can help entrepreneurs avoid common mistakes, such as securing the wrong type of financing, miscalculating the amount of financing required and underestimating the cost of borrowed money.
* “How to Prepare a Loan Package” includes links to related information and to places where entrepreneurs can get direct support.