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Museum raises $80M toward Detroit bankruptcy deal

By WTOP Staff

COREY WILLIAMS
Associated Press

DETROIT (AP) — The Detroit Institute of Arts says it has pledges for about 80 percent of the $100 million it promised toward an effort involving the state of Michigan and major foundations to prevent the sale of art and soften cuts to city retirees during Detroit’s bankruptcy.

It announced nearly $27 million in new donations and grants from prominent businesses Wednesday, including $10 million from billionaire Roger Penske and his Penske Corp.

Other donations announced Wednesday include $5 million from Detroit-based utility DTE Energy, and $5 million from Dan Gilbert’s Quicken Loans and Rock Ventures. Blue Cross Blue Shield of Michigan, Meijer Inc., Comerica Bank, the JPMorgan Chase Foundation, Consumers Energy and the Delta Air Lines Foundation also made pledges.

General Motors, Ford and Chrysler in June said they are kicking in $26 million as part of the museum’s $100 million pledge toward a “grand bargain” that is a key piece to the city’s restructuring plans heading into next month’s bankruptcy trial. Other pieces include $195 million from the state to Detroit’s two retirement systems and about $366 million from more than a dozen foundations. Over 20 years, the total value would be $816 million.

Home to paintings and sculptures by Van Gogh, Pieter Bruegel the Elder, Renoir and other masters, the DIA is one of the nation’s top art museums. Much of the art is considered an asset of the city, which purchased many of the pieces years ago during more prosperous times.

Syncora, a bond insurer, is among some creditors that believe the sale of art should at least be explored to help pay the city’s debts.

“The art … needs to be considered as an asset to determine the appropriate treatment of creditors,” said James Sprayregen, a partner and head of restructuring for Chicago-based Kirkland & Ellis, which is representing Syncora in Detroit’s bankruptcy. “The way the grand bargain is structured, it doesn’t do that.”

Sprayregen says Syncora’s bankruptcy claim is approximately $400 million.

An advisory company hired by the DIA and the city has said 60,377 pieces in the museum, collectively, could be worth more than $4.6 billion, but could fetch only about $1.1 billion in a forced liquidation. An earlier appraisal by an auction house placed the value of 2,800 city-owned pieces at between $454 million and $867 million.

“The $800 million-plus that has been contributed, in all likelihood would have been at least as good as if you had tried to liquidate (the art),” Mayor Mike Duggan said after Wednesday’s announcement. “The DIA is essential to this city and it will be protected for the long run. But more importantly, we’re protecting retiree pensions for a long time.”

With the grand bargain money, non-uniformed retirees would see their pensions cut by 4.5 percent and cost-of-living allowances erased. Some cost-of-living payments for retired police and firefighters would be eliminated.

A majority of approximately 32,000 retirees and city workers needed to vote “yes” on the city’s plan of adjustment for restructuring its debt, or the grand bargain money would disappear and steeper pension cuts would be inevitable. Results of that vote are expected to be released next week.

“It is a historic time for our city when such a diverse group of individuals, government, corporations and foundations come together to take this positive step in the process of revitalizing Detroit,” Penske said. “It sets the tone for the work yet to be done. I am optimistic about the future of the city and its citizens.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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