Airlines, College, Bankruptcy, Stocks, Theft, Investing
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The Department of Transportation plans to re-examine its regulations about bumping passengers, which haven't changed since 1978. Under current rules, if an airline can't convince enough volunteers to get off overcrowded flights, it must give up to $400 to anyone who doesn't get a seat and fly them to their destination for free. The exact amount depends on the price of the ticket and the length of the delay.
The number of passengers bumped rose from 0.88 per 10,000 passengers in 1999 to 1.04 last year, according to a review conducted by the University of Nebraska at Omaha Aviation Institute and the W. Frank Barton School of Business at Wichita State University. The airline most likely to bump a passenger was TWA; Delta had the lowest rate.
The price tag for tuition and board at Princeton University this fall will be $34,000, but students won't have to take out loans to help pay for their education. The college has overhauled its financial aid program and will hand out grants and campus jobs instead of loans to students who can't pay full tuition. In addition, students are now required to contribute only 5 percent of their savings; previously it was 35 percent.
Other top schools are following Princeton's lead, though none have yet gone as far. Harvard University and Massachusetts Institute of Technology will hand out additional grants to students to cut down on loan amounts. Harvard will now give an average of $20,000 a year, MIT about $19,000. Tuition and board at all three schools are roughly the same.
Tightening the rules on who can get relief from debt should hold down the costs of borrowing for everyone else, the banking and credit card industry claims. Those changes appear imminent, since a conference committee is now working out differences between bankruptcy reform bills passed in March by the House and Senate, and President Bush is expected to sign the resulting legislation.
Consumers seeking Chapter 7 relief, which gives debtors a fresh start by wiping out most of what they owe, would have to qualify under stricter rules. Filers with enough income to pay at least 25 percent of their unpaid bills over five years would be pushed into Chapter 13 bankruptcy, which requires repayment of at least part of the debt.
Buying stock on margin can be risky, so the US Securities and Exchange Commission has launched an online calculator to help investors understand the dangers. When you buy stocks on margin, you put up part of the cash and borrow the rest from your broker. You come out ahead if the stock price rises, but if it drops below a predetermined level, the broker can either call on you to deposit more cash in your accountor sell off your securities without consulting you first. The SEC's new tool will help you estimate your chances of getting a margin call, based on the stocks you own and how much you borrowed. You can find the calculator at www.sec.gov. Click on "Interactive Tools" under the "Investor Information" heading.
Phoenix is the newest hot spot for auto thefts, followed by Miami and Detroit, according to the National Insurance Crime Bureau. Also in the top 10 cities for car thieves: Jersey City, NJ; Tacoma, WA; Las Vegas; Fresno, CA; Seattle; Jackson, MS; and Flint, MI.
Border and port cities remain prime targets of auto thieves, who ship stolen vehicles overseas or drive them across the border into Mexico or Canada. The insurance group suggests that you equip your car with more than one kind of protection, such as alarms, immobilizing devices, and tracking devices, especially if you live in one of the cities listed above.
Several stock funds that shut their doors when eager investors swelled their coffers are reopening now that the market has cooled. Rising redemption rates have prompted eight funds so far this year to open to new investors in an effort to increase their asset base. Morningstar, the investment research firm, gives high marks to only three of them, as this table shows.
|Fund||Morning star rating||2001 1st quarter total return||2000 total return||1999 total return||Expense ratio|
|Vanguard Capital Opportunity Fund 800-662-7447||*****||7.9 %||18.0%||97.8%||0.62|
|Vanguard Primecap Fund 800-662-7447||*****||10.9||4.5||41.3||0.51|
|Fremont US Micro-Cap Fund 800-548-4539||*****||13.7||10.6||129.5||1.57|
|FPA Capital Fund 800-982-4372||***||3.2||3.1||14.2||0.86|
|SSgA Small Cap Fund 800-647-7327||**||10.6||4.5||3.6||1.07|
|Van Wagoner Micro-Cap Growth Fund 800-228-2121||**||48.4||18.2||207.9||1.95|
|Van Wagoner Emerging Growth Fund 800-228-2121||*||59.7||20.9||291.2||1.79|
|Firsthand Technology Innovators Fund 888-883-3863||Not rated||41.1||37.9||212.3||1.93|
Operating costs and past performance are the strongest predictors of which bond mutual funds will reap healthy returns and which are likely to tank, suggest researchers for Schwab Center for Investment Research. They looked at corporate, government, and municipal bond funds from 1992 through 1999 and found that 70 percent of the top-performing funds had below-average expenses and had been rated above-average in performance within their categories for the previous three years. According to the report, published in April in the Journal of Financial Planning, performance was not significantly affected by the length of the manager's tenure, the size of the fund, the turnover rate, or the presence of a load.
In the current market, net assets in bond funds are rising, while stock funds are losing ground, according to the Investment Company Institute. Morningstar, the investment research firm, reports that bond funds returned an average of 6.26 percent for the 12 months ending in April.
Yvonne Wollenberg. Financial Beat. Medical Economics 2001;11:10.