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Sears Needs Much More Than Another $100 Million Loan

By U.S. News & World Report

In its latest attempt to avoid bankruptcy, Sears Holdings Corp. (Nasdaq: SHLD) has reached back into the pockets of CEO Eddie Lampert once again to secure a $100 million loan. Unfortunately for Sears investors, the company’s latest desperate injection of capital to make it through the critical holiday shopping season does little to change its bleak long-term outlook.

The new loan comes from Lampert’s hedge fund ESL Investments, which may also provide another $100 million for Sears if the company can prove it has enough collateral by December. The latest loans are part of a $500 million credit facility that is backed by the mortgages on 61 of Sears’ remaining properties.

[See: 8 Luxury Retail Stocks Worth a Look.]

While Sears desperately needs the cash, investors are well aware that Lampert isn’t providing the funding out of the kindness of his heart. The latest loan comes with an 11 percent interest rate. Lampert currently owns about 54 percent of Sears via ESL Investments.

Sears stock has been trapped in a death spiral since Lampert took over as CEO in January 2013, losing more than 80 percent of its value. The New York Post estimates ESL has managed to generate more than $1 billion in profits from its various Sears investments over the years.

Sears has tried to stay afloat by closing its least profitable stores and selling non-core assets, but there’s little evidence that what is left of the company is any better off. In its most recent earnings report in August, Sears reported an 11.5 percent year-over-year decline in same-store sales. The number missed analyst expectations of a 7.1 percent decline by a wide margin. The drop in same-store sales is particularly discouraging given that the remaining stores are supposedly Sears’ most profitable locations.

With the latest loan, Sears may have successfully delayed its inevitable bankruptcy by pulling yet another financial rabbit out of a hat. Its long-term bulls on Wall Street, however, are few and far between.

[See: 8 Times When You Should Sell a Stock.]

“As much as Sears deserves credit for the various actions it has been taking to shore up the company, there is no denying that this is a miserable set of numbers,” GlobalData managing director Neil Saunders said following the earnings report, according to CNBC. “The bottom line is that as a retail proposition, Sears is fundamentally broken.”

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Sears Needs Much More Than Another $100 Million Loan originally appeared on usnews.com

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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