Ameritech Financial: Stock Buybacks Less Important to Student Loan Borrowers Than Paying Monthly Bills

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Aug 28, 2018, 08:00 ET

ROHNERT PARK, Calif., Aug. 28, 2018 /PRNewswire/ -- The trend of large companies buying back their own shares extends to the student loan industry. The practice, which creates higher stock prices by reducing the number of outstanding shares, increases companies' earnings per share, without, according to some, improving the economy, and directs resources away from hiring new employees or investing in company infrastructure or research and development. Very few, if any, of those weighed down by student loan debt have enough extra money to invest to directly benefit from stock buybacks. For millions of these borrowers, just paying monthly student loan payments and household expenses is extremely challenging.

Ameritech Financial, a document preparation firm, is focused on helping those overwhelmed by student loan debt navigate the sometimes overly complex process of applying for and maintaining enrollment in federal programs, such as income-driven repayment plans (IDRs).

"Stock buybacks are a way for large companies to add value to their share prices, benefiting investors," said Tom Knickerbocker, executive vice president of Ameritech Financial. "For most of our clients who come to us overburdened by student loan debt, investing in the stock market is far less important than getting to the end of the month to pay all the bills. That's why we help them find the right IDR, and hopefully lower their monthly payment based on income and family size."

Buybacks are attractive for investors and those who are compensated in shares of stock. Apple, for example, recently announced a record $100 billion buyback. According to a recent article, Navient, a company that student loan borrowers rely upon to service their student loan debt, bought back $2.75 billion from 2014 to 2017, including particularly high levels, over five percent, of its outstanding shares over the last 12 months.

Proponents of stock buybacks say that investment in innovation, jobs and worker compensation is underestimated since shareholders who have secured profits turn around and invest these proceeds in smaller public and private firms, supporting economic growth throughout the economy. Critics say that CEOs paid largely in shares directly profit from stock buybacks. The CEO of Navient, Jack Remondi, earned nearly $6.5 million in total compensation in 2017, nearly $3 million of that in stock rewards, despite low rates of customer satisfaction.

Though there may be differences of opinion on the relative merits of stock buybacks for the overall economy, many student loan borrowers are focused on keeping up with their monthly bills. According to recent estimates, nearly 40 percent of borrowers are expected to default on their student loans by 2023. Ameritech Financial remains committed to helping as many of these borrowers as possible, returning them to personal profitability by guiding them through the process of securing IDRS so that their household budgets can become manageable.

"While stock buybacks happen on grander financial stages, we work with one borrower at a time," said Knickerbocker. "We find just the right program for each borrower, then make sure all the i's are dotted and the t's are crossed."

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Ameritech Financial Newsroom

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
[email protected]

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SOURCE Ameritech Financial