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  • Chuck Schumer Fast Facts | CNN

    Chuck Schumer Fast Facts | CNN

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    CNN
     — 

    Here’s a look at the life of Chuck Schumer, the US Senate majority leader and Democratic senator from New York.

    Birth date: November 23, 1950

    Birth place: Brooklyn, New York

    Birth name: Charles Ellis Schumer

    Father: Abe Schumer, exterminator

    Mother: Selma (Rosen) Schumer

    Marriage: Iris Weinshall (1980-present)

    Children: Jessica, Alison

    Education: Harvard University, A.B., 1971; Harvard Law School, J.D., 1974

    Religion: Jewish

    He was valedictorian at James Madison High School in Brooklyn and received a perfect 1600 score on the SAT test. He edited his high school newspaper, and at one point considered pursuing a career in chemistry. His parents encouraged him to go to medical school, but he opted for law school instead.

    He funded his Harvard education by selling class rings while in school.

    For more than three decades, Schumer shared an aging row house in Washington with Congressional colleagues, including Dick Durbin and George Miller. He lived in the row house during the week and returned to his family home in Brooklyn on weekends.

    Writer/actress Amy Schumer is his second cousin, once removed.

    1975-1980 – New York state assemblyman.

    1981-1999 – US representative from New York 9th District (formerly 10th District and 16th District).

    1987-1988 – Sponsors the Fair Credit and Charge Card Disclosure Act, which requires credit card companies to list detailed information about fees and interest rates when soliciting new customers. The credit card disclosures are nicknamed “Schumer Boxes.”

    1993-1994 – Sponsors the Brady Handgun Violence Prevention Act, which requires background checks and a five-day waiting period for handgun purchases. Sponsors the Religious Freedom Restoration Act, meant to prevent the government from interfering with an individual’s right to express his or her faith. Also, cosponsors the Violent Crime Control and Law Enforcement Act, a measure that provides funding to expand police departments, increases prison capacity and allows judges to impose longer sentences for violent crimes. The crime bill includes an assault weapons ban, prohibiting the sale of certain types of military-style semi-automatic rifles for 10 years.

    1998 – Wins election to US Senate.

    2004 – Wins reelection to the US Senate.

    2004 – Leads an unsuccessful push to renew the assault weapons ban.

    2005-2008 – Chairs the Democratic Senatorial Campaign Committee.

    2007-2008 – Introduces the Keeping the Internet Devoid of Sexual Predators Act, requiring registered sex offenders to give law enforcement their email addresses and social media accounts so their online activity can be tracked.

    2007-2010 – Chairs and vice chairs the US Senate’s Joint Economic Committee.

    2009 – Cosponsors the Matthew Shepard and James Byrd Hate Crimes Prevention Act, broadening the definition of hate crimes to include acts of violence against individuals based on their actual or perceived gender, disability, sexual orientation or gender identity.

    2009-present – Serves on the US Senate Committee on Rules and Administration.

    2010 – Wins reelection to US Senate.

    2011-present – Chairman of the US Senate’s Democratic Policy and Communications Committee.

    2013 – Works on immigration reform as a member of the bipartisan “Gang of Eight.” The group’s bill, the Border Security, Economic Opportunity and Immigration Modernization Act of 2013, passes the Senate. The House, however, declines to vote on the package, which creates a pathway to citizenship for undocumented immigrants.

    August 3, 2015 – Holds a joint press conference with his cousin, actress and comedian Amy Schumer, to announce gun control legislation promoting stricter state background check laws. The press conference takes place 11 days after a deadly mass shooting at a screening of Schumer’s comedy, “Trainwreck,” in Louisiana. Schumer’s bill, the Fix Gun Checks Act of 2016, stalls in the Senate.

    August 6, 2015 – Expresses his opposition to the nuclear deal with Iran in a statement. He says that he is concerned about a 24-day delay for inspectors to access facilities and other limitations on inspections.

    November 8, 2016 – Wins reelection to the US Senate.

    November 16, 2016 – Senate Democrats choose Schumer to succeed Harry Reid as leader in the chamber.

    January 3, 2017 – On his first day as Senate minority leader, Schumer tells CNN that Senate Democrats plan to hold President-elect Donald Trump accountable but will also work with him if he supports legislation that is true to the Democratic Party’s principles.

    March 2, 2017 – Schumer calls on Attorney General Jeff Sessions to resign in the wake of a report that Sessions met with the Russian ambassador to the US during the presidential campaign, contradicting his testimony during his Senate confirmation hearing. Sessions does not resign but recuses himself from involvement in the investigation into alleged Russian meddling in the 2016 election.

    September 6, 2017 – Schumer meets with Trump and other congressional leaders in the Oval Office. During the meeting, Trump agrees to endorse a plan to attach hurricane relief money to a three-month extension of the debt ceiling that was proposed by Schumer and House Minority Leader Nancy Pelosi.

    January 19, 2018 – Schumer meets with Trump at the White House to discuss a deal that could avert a looming government shutdown. Schumer offers to increase military spending and fully fund border security measures in exchange for a pledge to protect beneficiaries of the Deferred Action on Childhood Arrivals program (DACA). Trump ultimately rejects the deal. The failed negotiations lead to a brief shutdown that White House officials label the “Schumer Shutdown.”

    June 27, 2018 – Schumer introduces a bill, the Marijuana Freedom and Opportunity Act, that would decriminalize and regulate marijuana at the federal level.

    November 11, 2018 – Schumer says that Democrats may combine a must-pass spending bill with a measure protecting the Robert Mueller special counsel investigation into Russian election meddling.

    November 10, 2020 – Schumer is reelected as a Senate party leader.

    January 20, 2021-present – Senate majority leader.

    July 14, 2021 – Schumer and a group of other Senate Democrats introduce draft legislation that would decriminalize marijuana at the federal level by striking it from the federal controlled substances list.

    November 8, 2022 – Wins reelection to the US Senate.

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  • How to choose the best student loan repayment plan | CNN Politics

    How to choose the best student loan repayment plan | CNN Politics

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    Washington
    CNN
     — 

    Millions of borrowers are required to make their monthly student loan payment for the first time in three-plus years in October, but there are several repayment plans available that could make the transition easier.

    Borrowers will be on the same payment plan they were before the pandemic pause started in March 2020, but they may want to consider switching to a different plan if their financial situation has changed.

    Plus, there’s also a new repayment plan, known as SAVE (Saving on a Valuable Education), that launched this summer and could potentially lower monthly payments for millions of borrowers.

    Borrowers can use Federal Student Aid’s online “Loan Simulator” to compare their estimated payments under different repayment plans. They can switch plans at any time, for free, by contacting their student loan servicer or by submitting an application to Federal Student Aid.

    Here are some things to consider when exploring your payment options:

    Standard 10-year plan: When entering repayment for the first time, borrowers are automatically enrolled in the Standard Repayment Plan. These payments are based on how much debt a borrower has and sets a fixed monthly amount to ensure it’s all paid off, with interest, in 10 years.

    Income-driven plans: If a borrower is struggling to afford monthly payments, an income-driven plan – of which there are four types, including the new SAVE plan – may be a good option. These plans calculate monthly payments based on a borrower’s income and family size and are meant to keep payments affordable for low-income borrowers. Monthly bills could be as low as $0.

    Other non-income-related plans: The extended and graduated repayment plans could also lower a borrower’s monthly payment without calculating the amount based on income. They could be a good option for people who will eventually earn high salaries. The extended plan will spread payments over as many as 25 years. The graduated plan usually has a 10-year term, but payments start small and grow over time.

    Income-driven repayment plans could be good options for borrowers who feel as though their monthly payment is too high on the 10-year standard plan or on the extended and graduated plans. The four plans are called SAVE, Pay As You Earn, Income-Based Repayment and Income-Contingent Repayment.

    Under these income-driven plans, a borrower is required to pay a certain portion of their discretionary income, or what income is left after paying for family necessities such as rent, food and clothes.

    Generally, monthly payments under an income-driven plan go up when a borrower’s income goes up – or payments go down when a borrower has less discretionary income. Borrowers are required to recertify every year, which means payments will adjust if their income or family size has changed.

    The newest income-driven plan, SAVE, offers the most generous terms when it comes to lowering a borrower’s monthly bill. Once fully phased in next year, it will require some borrowers with undergraduate loans to pay just 5% of their discretionary income, down from the 10% required by most income-driven plans. SAVE also includes an interest subsidy so that debts don’t grow while a borrower makes payments.

    Borrowers enrolled in income-driven repayment plans may also see their remaining student loan debt forgiven after making enough qualifying payments. The time to forgiveness varies by borrower and plan but won’t be longer than 25 years’ worth of payments.

    Eligibility for the income-driven repayment plans depends on what kind of federal student loans a borrower has, their income and when the loans were taken out. Most federal student loan borrowers are eligible for SAVE.

    Borrowers enrolled in the Standard Repayment Plan will usually pay the least amount over time. That’s because they will be finished paying in 10 years, leaving less time for interest to accrue.

    Borrowers may pay even less over time if they “prepay.” They are allowed to pay an extra amount, in addition to what’s required, at any time. Because of interest, this could also lower the total amount they end up paying under the Standard Repayment Plan.

    Parents who borrow to help finance their child’s education may have federal Parent PLUS loans, which are not eligible for all of the repayment plans.

    Like with other loans, borrowers with Parent PLUS loans are enrolled in the Standard Repayment Plan by default and are eligible to switch into the graduated and extended plans.

    Parent PLUS loans are not eligible for income-driven plans – but there is a workaround. If borrowers first consolidate their Parent PLUS loans into a Direct Consolidation Loan, they are then allowed to enroll in one type of income-driven plan – the Income-Contingent Repayment Plan – according to the Institute of Student Loan Advisors, a nonprofit that offers free student loan assistance.

    Parent PLUS borrowers will not be able to enroll in the newest income-driven plan, SAVE, even if they consolidate.

    It’s worth noting that the Income-Contingent Repayment Plan will close next year to new borrowers, except to those with consolidation loans that repaid a Parent PLUS loan, according to Department of Education rules.

    Marriage could result in a significant increase for borrowers enrolled in an income-driven plan because a spouse’s income will be included in the payment calculation.

    But some married borrowers who file taxes separately can shield their spouse’s income to get a lower monthly student loan payment. This is true under the SAVE, Income-Based Repayment and Income-Contingent Repayment plans.

    Borrowers enrolled in the 10-year standard plan won’t see a change after getting married.

    The Public Service Loan Forgiveness program could be a great option for borrowers with a lot of student loan debt who work for a nonprofit organization or the government.

    Qualifying borrowers will see their remaining student debt canceled after making 120 monthly payments. But they must be enrolled in the SAVE, Pay as You Earn, Income-Based or Income-Contingent plans.

    Borrowers with older, federally owned Federal Family Education Loans (FFEL) are not normally eligible for the Public Service Loan Forgiveness Program. But under a one-time waiver, those borrowers could get credit for past payments if they consolidate their FFEL loans by the end of 2023.

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  • What happens if you don’t pay your student loans? | CNN Politics

    What happens if you don’t pay your student loans? | CNN Politics

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    Washington
    CNN
     — 

    Student loan payments are due in October for the first time in three-plus years – but for the next 12 months, borrowers will be able to skip payments without facing the harsh financial consequences of defaulting on their loans.

    The Biden administration is providing what it’s called an “on-ramp period” until September 30, 2024. During that time, a borrower won’t be reported as being in default to the national credit rating agencies, which can damage a person’s credit score.

    Think of it as a grace period for missed payments. But interest will still accrue, so borrowers aren’t off the hook entirely.

    Here’s what borrowers need to know:

    Any federal student loan borrower who was eligible for the pandemic-related payment pause, which took effect in March 2020, is eligible for the “on-ramp” period. That includes borrowers with federal Direct Loans, Federal Family Education Loans and Perkins Loans held by the Department of Education.

    Borrowers don’t need to apply for the benefit.

    Normally, a federal student loan becomes delinquent the first day after a payment is missed. Loan servicers will report the delinquency to the three national credit bureaus if a payment is not made within 90 days.

    A loan goes into default after a borrower fails to make a payment for at least 270 days, or about nine months, which can result in further financial consequences.

    A default can further damage your credit score, making it harder to buy a car or house. It could take years to establish good credit again. Borrowers could also see their federal tax refund or even a portion of their paycheck withheld.

    Once in default, the borrower can no longer receive deferment or forbearance and would lose eligibility for additional federal student aid. At that point, the loan holder can also take the borrower to court.

    Because the pandemic payment pause has ended, interest restarted accruing on September 1 after interest rates were effectively set to 0% for three-plus years.

    That means if a borrower misses a payment now, he or she could end up owing more debt over time due to interest.

    As interest builds up, a borrower’s loan servicer may also increase monthly payment amounts to ensure the debt is paid off on time. (This won’t happen to borrowers enrolled in income-driven plans, which calculate payments based on income and family size.)

    And unlike during the pause, a missed payment means that a borrower will miss out on a month’s worth of credit toward student loan forgiveness under certain repayment plans.

    For borrowers enrolled in the Public Service Loan Forgiveness program, for example, each month during the pause still counted toward the 120 monthly payments required to be eligible for debt forgiveness.

    Before missing a payment, it might be worth considering switching into an income-driven repayment plan that could lower monthly payments.

    A new income-driven repayment plan launched this summer, called SAVE (Saving on a Valuable Education), offers the most generous terms and will likely offer the smallest monthly payment for lower-income borrowers.

    Under SAVE, a single borrower earning $32,800 or less or a borrower with a family of four earning $67,500 or less will see their payments set at $0.

    Borrowers can apply for a new repayment plan whenever they want, for free, but should allow at least four weeks for the change to take effect.

    Borrowers who fell into default before the pandemic pause started in March 2020 can apply for the Department of Education’s “Fresh Start” program.

    If borrowers use Fresh Start to get out of default, their loans will automatically be transferred from the Department of Education’s Default Resolution Group to a loan servicer and returned to an “in repayment” status, and the default will be removed from their credit report.

    To claim these benefits, log in to myeddebt.ed.gov or call 800-621-3115. The process should take about 10 minutes, according to the Department of Education.

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  • How Biden’s SAVE student loan repayment plan can lower your bill | CNN Politics

    How Biden’s SAVE student loan repayment plan can lower your bill | CNN Politics

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    Washington
    CNN
     — 

    While the Supreme Court struck down President Joe Biden’s student loan forgiveness program in late June, a separate and significant change to the federal student loan system is moving ahead.

    Eligible borrowers can now enroll in a new income-driven repayment plan that could lower their monthly bills and reduce the amount they pay back over the lifetime of their loans.

    If borrowers apply this summer, the changes to their bills would take effect before payments resume in October after the yearslong pandemic pause.

    Once the plan, which Biden is calling SAVE (Saving on a Valuable Education), is fully phased in next year, some people will see their monthly bills cut in half and remaining debt canceled after making at least 10 years of payments.

    Unlike Biden’s blocked one-time forgiveness program, the new repayment plan will provide benefits for both current and future borrowers who sign up for it.

    But the benefits will come at a cost to the government. Estimates vary, depending on how many borrowers end up enrolling in the plan, ranging from $138 billion to $475 billion over 10 years. As a comparison, Biden’s student loan forgiveness program was expected to cost about $400 billion.

    The SAVE repayment plan has gone through a formal rulemaking process at the Department of Education. The agency has previously created several other income-driven repayment plans in the same manner without facing a successful legal challenge.

    Some parts of the SAVE plan will be implemented this summer and others will take effect in July 2024. Here’s what borrowers need to know.

    Currently, there are several different kinds of income-driven repayment plans for borrowers with federal student loans. The new SAVE plan will essentially replace one of those, known as REPAYE (Revised Pay As You Earn), while the others are phased out for new borrowers.

    Under these plans, payments are based on a borrower’s income and family size, regardless of how much outstanding student debt is owed.

    There is also a forgiveness component. After making at least 10 years of payments, a borrower’s remaining balance is wiped away.

    Borrowers must have federally held student loans to qualify for the SAVE repayment plan. These include Direct subsidized, unsubsidized and consolidated loans, as well as PLUS loans made to graduate students.

    Parents who took out a federal PLUS loan to help their child pay for college are not eligible for the new repayment plan.

    Borrowers with Federal Family Education Loans, known as FFEL, or Perkins Loans that are held by a commercial lender rather than the government will need to consolidate into a Direct loan in order to qualify.

    Private student loans do not qualify for the new SAVE repayment plan or any other federal repayment plan.

    Borrowers can apply for the SAVE plan by submitting a recently updated application for income-driven repayment plans found here.

    The application may be available intermittently during an initial beta testing period, according to the Department of Education. If the application is not available, try again later.

    Applications submitted during the beta period will not need to be resubmitted once a full website launches later this summer.

    Borrowers can expect to receive an email confirmation after applying.

    People who are already enrolled in the REPAYE repayment plan will be automatically switched to the SAVE plan.

    Borrowers can log in to StudentAid.gov and go to their My Aid page to see what repayment plan they are enrolled in.

    The Department of Education says that it will process applications submitted this summer before payments resume in October.

    “It may take your servicer a few weeks to process your request, because they will need to obtain documentation of your income and family size,” according to the department’s website.

    Under the SAVE plan, monthly payments can be as small as $0.

    Other income-driven repayment plans already offer a $0 monthly payment for some borrowers. But the new SAVE plan lowers the qualifying threshold.

    A single borrower earning $32,800 or less or a borrower with a family of four earning $67,500 or less will see their payments set at $0 if enrolled in SAVE.

    Increase in protected income threshold: Like in existing income-driven repayment plans, a borrower’s discretionary income, generally what’s left after paying for necessities like housing, food and clothing, will be shielded from student loan payments.

    The new SAVE plan recalculates discretionary income so that it’s equal to the difference between a borrower’s adjusted gross income and 225% of the poverty level. Existing income-driven plans calculate discretionary income as the difference between income and 150% of the poverty level.

    This change will result in lower payments for borrowers.

    Interest limit: Under the new payment plan, unpaid interest will not accrue if a borrower makes a full monthly payment.

    That means that a borrower’s balance won’t increase even if the monthly payment doesn’t cover the monthly interest. For example: If $50 in interest accumulates each month and a borrower has a $30 payment, the remaining $20 would not be charged.

    Lower payments for married borrowers: Married borrowers who file their taxes separately will no longer be required to include their spouse’s income in their payment calculation for SAVE. This could lower monthly payments for two-income households.

    Automatic recertification: Borrowers will now be able to allow the Department of Education to access their latest tax return. This will make the application process easier because borrowers won’t have to manually provide income or family size information. It will also allow the department to automatically recertify borrowers for the payment plan on an annual basis.

    Cut payments in half: Payments on loans borrowed for undergraduate school will be reduced from 10% to 5% of discretionary income.

    Borrowers who have loans from both undergraduate and graduate school will pay a weighted average of between 5% and 10% of their income based upon the original principal balances of their loans.

    For example, a borrower with $20,000 from their undergraduate education and $60,000 from graduate school will pay 8.75% of their income, according to a fact sheet provided by the Biden administration.

    Shorter time to forgiveness: Currently, borrowers who pay for 20 or 25 years under an income-driven repayment plan will see their remaining balance wiped away.

    Under the new SAVE plan, those who borrowed $12,000 or less will see their debt forgiven after paying for just 10 years. Every additional $1,000 borrowed above that amount would add one year of monthly payments to the required time a borrower must pay.

    Borrowers who consolidate their loans will receive partial credit for their previous payments toward forgiveness.

    Borrowers will also automatically receive credit toward forgiveness for certain periods of deferment and forbearance, as well be given the option to make additional “catch-up” payments to get credit for all other periods of deferment or forbearance.

    Automatically enroll struggling borrowers: Borrowers who are 75 days late on their payments will be automatically enrolled in the best income-driven plan for them, as long as they have agreed to allow the Department of Education to securely access their tax information.

    This story has been updated with additional information.

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  • Biden’s student loan policies continue to face legal challenges | CNN Politics

    Biden’s student loan policies continue to face legal challenges | CNN Politics

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    CNN
     — 

    Legal challenges are continuing to target some of President Joe Biden’s student loan policies.

    While the president’s major student loan forgiveness program was blocked by the Supreme Court in late June, the Biden administration is also facing lawsuits over some of its other policy changes aimed at making it easier for borrowers to pay back their loans.

    On Monday, the US 5th Circuit Court of Appeals temporarily blocked new provisions that were meant to be implemented in July, which would make it easier for borrowers to get their debts erased when they’re misled or defrauded by their college under a rule known as borrower defense to repayment.

    The rule has been in place for decades. But the lawsuit targets new provisions – including one allowing for automatic debt discharges a year after a college’s closure date and another that bans colleges from requiring borrowers to agree to mandatory arbitration – which are now blocked.

    The emergency injunction request was made by Career Colleges and Schools of Texas, a group of for-profit universities. The appeals court order did not explain the reasoning for the decision but said that the case will be heard on November 6.

    Student loan borrowers may still submit applications for debt relief under the borrower defense rule during this time, but the Department of Education “will not adjudicate or process affected applications under the new regulations while the court’s order is in place,” according to the agency’s website.

    Aaron Ament, president of the nonprofit National Student Legal Defense Network, warned that “countless students are at risk of being taken advantage of by higher ed profiteers” until the protections are restored.

    Meanwhile, in a separate lawsuit filed last week, two conservative groups sued to stop the Biden administration from carrying out a one-time adjustment to some borrowers’ accounts, which was aimed at more accurately counting certain payments made previously under an income-driven repayment plan.

    These plans calculate payments based on a borrower’s income and family size – regardless of the person’s total outstanding debt. Generally, they lower monthly payments to help borrowers avoid defaulting on their loans and wipe away remaining balances after qualifying payments are made for 20 to 25 years.

    What the administration has referred to as “fixes” are expected to result in the cancellation of $39 billion worth of federal student loan debt for 804,000 borrowers, according to the Department of Education.

    The lawsuit, which was filed by the New Civil Liberties Alliance on behalf of the conservative groups Cato Institute and the Mackinac Center for Public Policy, argues that one-time adjustment “is substantively and procedurally unlawful” – similar, it says, to the broader student loan forgiveness program struck down by the Supreme Court.

    The Department of Education announced in July – weeks after the other forgiveness program was blocked – that it would begin to notify the 804,000 borrowers of their forthcoming debt cancellation.

    But the one-time adjustment had been planned for more than a year. First announced in April 2022, the move was meant to help borrowers whose payments were miscounted and were already eligible for debt relief under an income-driven repayment plan.

    The changes followed a Government Accountability Office report that found that the Department of Education had trouble tracking borrowers’ payments and hadn’t done enough to ensure that all eligible borrowers receive the forgiveness to which they are entitled. In fact, 7,700 loans in repayment, or about 11% of loans analyzed, could have potentially already been eligible for forgiveness.

    In a statement sent to CNN, the Department of Education said the lawsuit “is nothing but a desperate attempt from right wing special interests to keep hundreds of thousands of borrowers in debt, even though these borrowers have earned the forgiveness that is promised through income-driven repayment plans.”

    This latest legal challenge does not appear to immediately impact the Biden administration’s new income-driven repayment plan known as SAVE (Saving on a Valuable Education), which launched last week.

    Once the SAVE plan is fully phased in, which is expected to happen next year, some borrowers could see their monthly bills cut in half and remaining debt canceled after making at least 10 years of payments.

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  • Nevada GOP Senate candidate raised money to help other candidates — the funds mostly paid down his old campaign’s debt instead | CNN Politics

    Nevada GOP Senate candidate raised money to help other candidates — the funds mostly paid down his old campaign’s debt instead | CNN Politics

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    CNN
     — 

    Nevada Republican Senate candidate Sam Brown created a political action committee to “help elect Republicans” but most of its funds were spent paying down debt from his failed previous campaign. The group donated less than 7% of its funds to the candidates it was set up to support, according to campaign finance records – a move one campaign finance expert likened to using the PAC as a “slush fund.”

    Brown formed the Duty First PAC in July 2022, saying the organization would help Republicans take back Congress. A month earlier, Brown lost the Republican Senate primary to Adam Laxalt after raising an impressive $4.4 million for his upstart campaign, but his campaign was left with more than $300,000 in debt.

    Now Brown is running again in Nevada as a top recruit of Senate Republicans.

    A former Army captain, Brown made lofty promises when launching his PAC, Duty First.

    “With your support, we will: Defeat the socialist Democrats. Help elect Republicans who believe in accountability to the Constitution and service to the people. Stand with the #DutyFirst movement, chip in with a grassroots contribution today,” he said in a tweet announcing the PAC.

    “We’ll ensure that the socialist agenda of the Democrats does not win in November, and the Republicans continue to be held accountable to defending our Constitution and defending our conservative principles. The country’s counting on us,” Brown said in an accompanying video for the PAC’s launch in July 2022.

    Since then, the PAC raised a small amount – just $91,500 – and used the majority of their money – $55,000 – to repay debt from Brown’s failed campaign for Senate, which Brown had transferred over. Campaign finance experts told CNN this falls into a legal gray area.

    Of the $90,000 spent so far, just $6,000 made its way to five Nevadan Republican candidates’ committees. An additional payment for $1,000 was listed as going directly to congressional candidate Mark Robertson as a contribution but lists the amount as being directly paid to the candidate at his home – not to his committee.

    Instead, the Duty First PAC made over a dozen debt payments. A combined $23,000 was spent on website and software services used by Brown’s Senate campaign. Another $11,275 went towards paying down the failed campaign’s credit card, with an additional $3,000 spent on credit card interest fees.

    Duty First paid off over $1,200 in credit card debt accrued at a country club near where Brown previously lived in Dallas, Texas, and ran for the state house in 2014. A spokesman for the Brown campaign said in an email to CNN the “facility fee” charges were for a fundraiser “hosted by supporters of Sam’s campaign.”

    The most recent FEC filing shows Brown is now trying to dispute over $80,000 in remaining debt from the previous campaign, which the spokesman said “will be resolved in due course.” A majority of the disputed debt owed is for direct mail services used by Brown’s previous campaign.

    Duty First PAC is also responsible for eventually repaying Brown $70,000 that he personally loaned his committees.

    The spokesperson for Brown’s campaign defended the PAC’s spending.

    “The PAC promised to support conservative candidates in Nevada, and it did exactly that by donating to every Republican candidate in Nevada’s federal races during the 2022 general election,” they said.

    According to a CNN analysis of Duty First PAC’s FEC filings, of all the money raised, less than 7% went to candidates. When considering Brown’s personal loans, debt the PAC took on from Brown’s campaign, and expenditures, fewer than 2% of the PAC’s funds went towards candidates in 2022

    The money not spent on debt went to a variety of consulting and digital marketing expenses. The PAC spent $1,090 on a storage unit, more than it donated to the winning campaign of Republican Rep. Mark Amodei.

    Despite this, Brown played up his PAC’s donations to candidates in interviews and in posts on social media.

    “I have pledged to help defeat the Democrats in Nevada,” he added in an email, announcing the launch of the PAC.

    The PAC’s donations were from grassroots donors, who typically donated $50 or less.

    Just a day before the 2022 midterm election, Brown announced donations to several candidates running for office in Nevada.

    Records with the FEC show the 2022 donations to House candidates were made on October 31, while the donation to Laxalt’s Senate campaign was made in early September.

    “The Duty First PAC proudly supports conservatives fighting for Nevada,” he said in a tweet after making the donations on November 7, 2022. “This past week, we donated funds to the four Republicans working to take back the House. Join us in supporting them right now!”

    Later, following the 2022 midterms in a late November interview on a local Nevada radio station, Brown played up the PAC’s work and said it would continue to work between election cycles.

    “Duty First is here to kind of work between the cycles, so to speak and help candidates who are running,” Brown said. “In fact this cycle, you know, we had raised money and supported all of our Republican federal candidates, Adam Laxalt, as well as the four Congressionals.”

    “And so, it’s our way of pushing back against the Democrat agenda and their representation,” Brown said. “But, also, it gives Duty First supporters and people that believe in our mission, a sort of platform to remind Republicans what we’re about.”

    Campaign finance experts CNN spoke to said Brown marketing the Duty First PAC as a way for people to financially support conservative candidates was a “creative way” for Brown to pay off old campaign debts behind the scenes.

    “It creates a situation where contributors to a PAC may think that PAC is doing one thing, which is supporting political candidates, when in fact what it’s doing is being used to pay off long standing debts from a previous campaign,” said Stephen Spaulding, vice president of policy at Common Cause and former advisor to an FEC commissioner.

    Since the FEC has not issued an advisory opinion that would “apply to that candidate and any other candidate that has a very similar situation,” Spaulding said transferring debts between campaign committees and PACs is a gray area in campaign finance law. In Brown’s case, his candidate committee was rolled into a PAC, Sam Brown PAC, that was associated with his candidacy, which the campaign finance experts agree is a common maneuver for candidates. But what struck the experts as odd was that Brown terminated the Sam Brown PAC, and transferred his outstanding loans and debts to the Duty First PAC.

    Brown’s 2024 candidate committee, Sam Brown for Nevada, is an entirely new committee with its own FEC filings, despite having the same name as his previous committee. This committee, formed in July 2023, is not affiliated with the Duty First PAC, nor is it obligated to pay off the remaining $271,000 in previous campaign debt and loans.

    “Unfortunately, Sam Brown, like too many other politicians, has given almost no money to other candidates and, instead, has used his PAC as a slush fund,” said Paul S. Ryan, executive director at Funders’ Committee for Civic Participation. “Many donors would understandably be upset if they learned their money wasn’t used to help elect other candidates like Brown – the reason they made their contributions,” he added.

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  • US watchdog teases crackdown on data brokers that sell Americans’ personal information | CNN Business

    US watchdog teases crackdown on data brokers that sell Americans’ personal information | CNN Business

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    Washington
    CNN
     — 

    The US government plans to rein in the vast data broker industry with new, privacy-focused regulations that aim to safeguard millions of Americans’ personal information from data breaches, violent criminals and even artificial intelligence chatbots.

    The coming proposal by the Consumer Financial Protection Bureau would extend existing regulations that govern credit reports, arrest records and other data to what the agency describes as the “surveillance industry,” or the sprawling economy of businesses that traffic in increasingly digitized personal information.

    The potential rules, which are not yet public or final, could bar data brokers from selling certain types of consumer information — including a person’s income or their criminal and payment history — except in specific circumstances, the CFPB said.

    The push could also see new restrictions on the sale of personal information such as Social Security numbers, names and addresses, which the CFPB said data brokers often buy from the major credit reporting bureaus to create their own profiles on individual consumers.

    Issued under the Fair Credit Reporting Act, the regulations would seek to ensure that data brokers selling that sensitive information do so only for valid financial purposes such as employment background checks or credit decisions, and not for unrelated purposes that may allow third parties to use the data to, for example, train AI algorithms or chatbots, the CFPB said.

    The announcement follows an agency study into the data broker industry this year that found widespread concerns about how consumer data is being collected, used and shared. The inquiry received numerous submissions from the public warning about the disproportionate risks that unregulated data sharing can have on minorities, seniors, immigrants and victims of domestic violence.

    “Reports about monetization of sensitive information — everything from the financial details of members of the U.S. military to lists of specific people experiencing dementia — are particularly worrisome when data is powering ‘artificial intelligence’ and other automated decision-making about our lives,” CFPB Director Rohit Chopra said in a statement. “The CFPB will be taking steps to ensure that modern-day data brokers in the surveillance industry know that they cannot engage in illegal collection and sharing of our data.”

    The CFPB’s proposal will first be floated with a group of small businesses for feedback before being publicly unveiled in a formal rulemaking, the agency said.

    The CFPB isn’t the only US agency clamping down on the massive data industry. Last year, the Federal Trade Commission proposed a sweeping set of regulations that may restrict how all businesses collect and use consumer data, taking aim at what FTC Chair Lina Khan has described as the “persistent tracking and routinized surveillance of individuals.”

    The agency initiatives reflect how Congress has continually failed to produce a comprehensive, national-level consumer privacy law, despite years of lawmaker negotiations and the rise of privacy regulations overseas that increasingly affect US businesses.

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  • Biden cancels $72 million in student loan debt for borrowers who went to for-profit Ashford University | CNN Politics

    Biden cancels $72 million in student loan debt for borrowers who went to for-profit Ashford University | CNN Politics

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    Washington
    CNN
     — 

    Even though President Joe Biden’s student loan forgiveness program was blocked by the Supreme Court earlier this year, his administration is moving forward with more targeted student debt cancellations allowed under existing programs.

    The Department of Education said Wednesday that it is canceling $72 million in federal student loan debt for more than 2,300 borrowers who attended the for-profit Ashford University in California.

    Altogether, the Biden administration has approved the cancellation of more than $116 billion of student loan debt for over 3.4 million people – about 1.1 million of whom are borrowers who were misled by a for-profit college and granted relief under a program known as borrower defense to repayment.

    This student debt forgiveness program has been in place for decades and allows people to apply for debt relief if they believe their college misled or defrauded them.

    “My administration won’t stand for colleges taking advantage of hardworking students and borrowers. As long as I am president, we will never stop fighting to deliver relief to borrowers who need it – like those who attended Ashford University,” Biden said in a statement.

    The Department of Education found that Ashford University made “numerous substantial misrepresentations” to borrowers between March 1, 2009, and April 30, 2020. The school is now known as the University of Arizona Global Campus.

    The Education Department’s review was based on evidence presented in court by the California Department of Justice during its successful lawsuit against the school and its parent company at the time, Zovio.

    The court ruled in favor of the state in March 2022, ordering a penalty of more than $22.37 million – which is the subject of an ongoing appeal.

    “As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” James Kvaal, the US under secretary of education, said in a press release.

    Borrowers whose debt relief applications have been approved due to this action can expect to receive an email in September. They will not have to make any payments on the loans being discharged when monthly payments resume in October after the expiration of the pandemic-related pause.

    Last year, Biden announced a plan to cancel up to $20,000 of federal student loan debt for low- and middle-income borrowers. The proposal would have forgiven roughly $420 billion for tens of millions of borrowers, but it was knocked down by the Supreme Court and never took effect.

    The Biden administration has been successful in other efforts to provide narrower student debt relief. Not only has it made it easier to apply for debt cancellation under the borrower defense program, but it also expanded eligibility for the Public Service Loan Forgiveness program, which wipes away outstanding debt for public sector workers after they make 10 years of qualifying payments.

    In August, the administration launched a new income-driven repayment plan, known as SAVE (Saving on a Valuable Education), that will reduce monthly payments and the amount paid back over time for eligible student loan borrowers.

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  • Fortnite players can now apply for a portion of its $245 million FTC settlement | CNN Business

    Fortnite players can now apply for a portion of its $245 million FTC settlement | CNN Business

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    New York
    CNN
     — 

    Millions of Fortnite users can now claim their small part of the $245 million that the game’s parent company agreed to pay as part of a settlement with the US Federal Trade Commission.

    Epic Games in December settled allegations with the FTC that it used deceptive tactics that drove users to make unwanted purchases in the multiplayer shooter game that became wildly popular with younger generations a few years ago. The FTC said Tuesday it has now opened the claims process for the more than 37 million potentially affected users who could qualify for compensation.

    Epic Games agreed in December to pay a total of $520 million to settle US government allegations that it misled millions of players, including children and teens, into making unintended purchases and that it violated a landmark federal children’s privacy law.

    In one settlement, Epic agreed to pay $275 million to the US government to resolve claims that it violated the Children’s Online Privacy Protection Act by gathering the personal information of kids under the age of 13 without first receiving their parents’ consent. In a second and separate settlement, Epic also agreed to pay $245 million as refunds to consumers who were allegedly harmed by user-interface design choices that the FTC claimed were deceptive.

    The FTC said in a statement Tuesday that the Fortnite maker “used dark patterns and other deceptive practices to trick players into making unwanted purchases” and also “made it easy for children to rack up charges without parental consent.”

    (“Dark patterns” refer to the gently coercive design tactics used by countless websites and apps that critics say are used to manipulate peoples’ digital behaviors.)

    The FTC is now notifying users who may be eligible to receive part of that $245 million settlement fund. Affected users may receive an email from the FTC over the next month with a claim number, or they can go directly to the settlement site and file a claim using their Epic account ID.

    Here’s who can apply: Users who were charged in-game currency for items they didn’t want between January 2017 and September 2022, parents whose children made charges to their credit cards on Fortnite between January 2017 and November 2018 or users whose accounts were locked sometime between January 2017 and September 2022 after they complained to their credit card company about wrongful charges. Claimants must be 18 years old; for younger users, their parents can submit a claim on their behalf.

    Users have until January 17, 2024, to submit a claim to be included in the settlement class. It is not yet clear how much the individual settlement payments will be.

    Epic’s agreement with the FTC also prohibits the company from using dark patterns or charging consumers without their consent, and forbids Epic from locking players out of their accounts in response to users’ chargeback requests with credit card companies disputing unwanted charges.

    Epic said in a blog post in December when it reached the agreement that, “no developer creates a game with the intention of ending up here.” It added, “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

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  • Biden administration seeks to remove medical bills from credit reports | CNN Politics

    Biden administration seeks to remove medical bills from credit reports | CNN Politics

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    CNN
     — 

    Millions of Americans with unpaid medical bills would no longer have that debt show up on credit reports under proposals being considered by the Consumer Financial Protection Bureau.

    The agency, which is soliciting feedback from small businesses that may be affected, expects to issue a proposed rule next year, the bureau said Thursday.

    If the rule is finalized, consumer credit companies would be barred from including medical debt and collection information on reports that creditors use to make underwriting decisions.

    Creditors would only be able consider non-medical information when evaluating borrowers’ loan applications. And debt collectors would no longer be able to use the listing of medical debt on credit reports as leverage to pressure consumers into paying questionable bills, the bureau said.

    “Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” said CFPB Director Rohit Chopra. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”

    Roughly 20% of Americans reported having medical debt, according to a 2022 report from the bureau. But Chopra stressed that many health care bills contain mistakes.

    “Families are often barraged with a string of confusing and error-ridden bills, and too many of us have ended up in a doom loop of disputes between insurance companies and health care providers,” he said. “These bills, even ones where the patient doesn’t owe anything further, can end up being reported on the patient’s credit report.”

    The proposals under consideration are the latest step in the bureau’s efforts to curb the impact of medical debt on consumers. CFPB and other agencies are also looking into medical billing practices, including costly products such as medical credit cards and installment loans.

    The White House has also sought to help lessen Americans’ medical debt burden as part of its effort to help people contend with inflation and higher costs of living. Last year, it laid out a four-point plan to help protect consumers, including having the bureau investigate credit reporting companies and debt collectors that violate patients’ and families’ rights.

    Medical debt has lowered people’s credit scores, which affects their ability to buy a home, get a mortgage or own a small business, Vice President Kamala Harris said in a call with reporters on Thursday.

    “We know credit scores determine whether a person can have economic health and well-being, much less the ability to grow their wealth,” she said. “Today, we are offering a solution to fix this problem … Together, these measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future.”

    Also last year, the three largest credit reporting agencies – Equifax, Experian and TransUnion – announced they would remove nearly 70% of medical debt from consumer credit reports.

    The agencies no longer include medical debt that went to collections on consumer credit reports once it has been paid off. That eliminated billions of dollars of debt on consumer records.

    In addition, unpaid medical collection debt no longer appears on credit reports for the first year, whereas the previous grace period was six months. That gives people more time to work with their health insurers or providers to address the bills. And medical collection debt of less than $500 is no longer included on credit reports.

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  • What markets are watching after digesting the US jobs data | CNN Business

    What markets are watching after digesting the US jobs data | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    In an unusual coincidence, the US jobs report was released on a holiday Friday — meaning stock markets were closed when the closely-watched economic data came out.

    It was the first monthly payroll report since Silicon Valley Bank and Signature Bank collapsed. It also marked a full year of jobs data since the Federal Reserve began hiking interest rates in March 2022.

    While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient.

    Investors have had a long weekend to chew over the details of the report and will likely skip the typical gut-reaction to headline numbers.

    What happened: The US economy added 236,000 jobs in March, showing that hiring remained robust though the pace was slower than in previous months. The unemployment rate currently stands at 3.5%.

    Wages increased by 0.3% on the month and 4.2% from a year ago. The three-month wage growth average has dropped to 3.8%. That’s moving closer to what Fed policymakers “believe to be in line with stable wage and inflation expectations,” wrote Joseph Brusuelas, chief economist at RSM in a note.

    “That wage data tends to suggest that the risk of a wage price spiral is easing and that will create space in the near term for the Federal Reserve to engage in a strategic pause in its efforts to restore price stability,” he added.

    The March jobs report was the last before the Fed’s next policy meeting and announcement in early May. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out.

    At the same time Wall Street is beginning to see bad news as bad news. A slowing economy could mean a recession is forthcoming.

    Markets are still largely expecting the Fed to raise rates by another quarter point. So how will they react to Friday’s report?

    Before the Bell spoke with Michael Arone, State Street Global Advisors chief investment strategist, to find out.

    This interview has been edited for length and clarity.

    Before the Bell: How do you expect markets to react to this report on Monday?

    Michael Arone: I think that this has been a nice counterbalance to the weaker labor data earlier last week and all the recession fears. This data suggests that the economy is still in pretty good shape, 10-year Treasury yields increased on Friday indicating there’s less fear about an imminent recession.

    There’s this delicate balance between slower job growth and a weaker labor market without economic devastation. I think this report helps that.

    As it relates to the stock market, I would expect the cyclical sectors to do well — your industrials, your materials, your energy companies. If interest rates are rising, that’s going to weigh on growth stocks — technology and communication services sectors, for example. Less recession fears will mean investors won’t be as defensively positioned in classic staples like healthcare and utilities.

    Could this lead to a reverse in the current trend where tech companies are bolstering markets?

    Yes, exactly. It’s difficult to make too much out of any singular data point, but I think this report will hopefully lead to broader participation in the stock market. If those recession fears begin to abate somewhat, and investors recognize that recession isn’t imminent, there will be more investment.

    What else are investors looking at in this report?

    We’ve seen weakness in the interest rate sensitive parts of the market — areas that are typically the first to weaken as the economy slows down. So things like manufacturing, things like construction. That’s where the weakness in this jobs report is. And the services areas continue to remain strong. That’s where the shortage of qualified skilled workers remains. I think that you’re seeing continued job strength in those areas.

    What does this mean for this week’s inflation reports? It seems like the jobs report just pushed the tension forward.

    it did. I expect that inflation figures will continue to decelerate — or grow at a slower rate. But I do think that the sticky part of inflation continues to be on the wage front. And so I think, if anything, this helps alleviate some of those inflation pressures, but we’ll see how it flows through into the CPI report next week. And also the PPI report.

    Is the Federal Reserve addressing real structural changes to the labor market?

    The Fed was confused in February 2020 when we were in full employment and there was no inflation. They’re equally confused today, after raising rates from zero to 5%, that we haven’t had more job losses.

    I’m not sure why, but from my perspective, the Fed hasn’t taken into consideration the structural changes in the labor force, and they’re still confused by it. I think the risk here is that they’ll continue to focus on raising rates to stabilize prices, perhaps underestimating the kind of structural changes in the labor economy that haven’t resulted in the type of weakness that they’ve been anticipating. I think that’s a risk for the economy and markets.

    A few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry.

    After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

    Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

    Since then, things have gotten worse, CNN’s Julia Horowitz reports.

    In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. A bank run is what toppled Silicon Valley Bank last month, roiling financial markets and raising fears of a recession.

    “We’re watching it pretty closely,” said Michael Reynolds, vice president of investment strategy at Glenmede, a wealth manager. While he doesn’t expect office loans to become a problem for all banks, “one or two” institutions could find themselves “caught offside.”

    Signs of strain are increasing. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

    High-profile defaults are making headlines. Earlier this year, a landlord owned by asset manager PIMCO defaulted on nearly $2 billion in debt for seven office buildings in San Francisco, New York City, Boston and Jersey City.

    Dig into Julia’s story here.

    Tech stocks led market losses in 2022, but seemed to rebound quickly at the start of this year. So as we enter earnings season, what should we expect from Big Tech?

    Daniel Ives, an analyst at Wedbush Securities, says that he has high hopes.

    “Tech stocks have held up very well so far in 2023 and comfortably outpaced the overall market as we believe the tech sector has become the new ‘safety trade’ in this overall uncertain market,” he wrote in a note on Sunday evening.

    Even the recent spate of layoffs in Big Tech has upside, he wrote.

    “Significant cost cutting underway in the Valley led by Meta, Microsoft, Amazon, Google and others, conservative guidance already given in the January earnings season ‘rip the band- aid off moment’, and tech fundamentals that are holding up in a shaky macro [environment] are setting up for a green light for tech stocks.”

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  • ‘We are in limbo:’ Student loan borrowers still face months of uncertainty about Biden’s forgiveness program | CNN Politics

    ‘We are in limbo:’ Student loan borrowers still face months of uncertainty about Biden’s forgiveness program | CNN Politics

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    Washington
    CNN
     — 

    More than 40 million federal student loan borrowers could be eligible for up to $20,000 in debt forgiveness, but they will likely have to wait several more months before the Supreme Court rules on whether President Joe Biden can implement his proposed relief program.

    The Supreme Court heard oral arguments last week in two cases challenging Biden’s student loan forgiveness program, but justices aren’t expected to issue their decision until late June or early July.

    When the ruling comes will also determine when federal student loan payments, which have been paused due to the pandemic since March 2020, will restart.

    Some borrowers have been anxiously waiting for years to see if Biden would fulfill his campaign pledge to cancel some federal student loan debt. The president finally announced a forgiveness plan last August.

    But after 26 million people applied, the program was blocked by lower courts in November – before any debt could be canceled.

    “In some ways, it feels like we are one step closer now that they’ve heard the oral arguments, but until a decision is made, it still feels like we are in limbo,” said Lindsay Clausen, who has about $68,000 in student loan debt and works as an instructional designer at a university.

    Clausen, 33, filed for relief from Biden’s forgiveness program last fall as soon as the application was open, hoping the forgiveness would help her and her husband save for a new home and expand their family.

    “I felt relief, and then it was like a rug was pulled from underneath me,” Clausen said.

    “Whichever way SCOTUS (Supreme Court of the US) decides to rule, it will at least be nice to have an answer,” she added.

    The Biden administration has estimated that more than 40 million federal student loan borrowers would qualify for some level of debt cancellation, with roughly 20 million who would have their balance forgiven entirely, if the forgiveness program is allowed to move forward.

    But not everyone with a federally held student loan would qualify.

    Individual borrowers who earned less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 annually in those years could see up to $10,000 of their federal student loan debt forgiven. Those with higher incomes would be excluded.

    If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness. Pell grants are a key federal aid program that help students from the lowest-income families pay for college, but these borrowers are still more likely to struggle paying off their student loans.

    Student debt cancellation would deliver financial relief to millions of Americans, potentially helping them buy their first homes, start businesses or save for retirement.

    But those who have already paid off their student loans, or chose not to borrow money to go to college to begin with, would get nothing. And the estimated $400 billion cost of canceling some debt would shift to all taxpayers.

    At last week’s hearing, several of the conservative justices questioned whether that tradeoff is fair, while liberal Justice Sonia Sotomayor pushed back, arguing how many borrowers “don’t have friends or families or others who can help them make these payments.”

    The back-and-forth on fairness touches on one of the biggest complaints about the nation’s higher education system: many people feel they need to go to college, and as a result borrow money, to get ahead.

    Angel Enriquez, a 30-year-old meteorologist with about $61,000 in student loan debt, is one of those people.

    Angel Enriquez poses for a portrait at Bizzell Memorial Library at the University of Oklahoma on June 3, 2022.

    His parents, immigrants from Mexico, couldn’t afford to help him pay for college. Enriquez was wait-listed at a state school that had a meteorology program, so he instead enrolled at a more expensive school out of state. He is now pursuing a master’s degree, which he felt he needed to stand out in a competitive industry.

    “When you talk about fairness, it’s a complicated argument,” Enriquez said.

    “But if you talk to someone who comes from poverty, or someone who’s a person of color, they are going to benefit from the forgiveness program the most because they’re the ones that have to jump through extra financial hoops in order to get where everyone else in the educated country is,” he said.

    For some students, college degrees do not deliver the step up in the world they hoped for.

    Even though Blake Goddard worked part-time jobs while in college, he still had to borrow nearly $90,000 for his bachelor’s degree in network communications management from DeVry University. In an effort to land a higher-paying job in the information technology industry, he then earned his master’s degree, borrowing another $44,000.

    Despite those degrees, most of his jobs have been temporary contract positions, and many of his co-workers opted for getting lower-cost IT industry certifications rather than a four-year degree.

    Blake Goddard poses for a portrait in his home on June 10, 2022.

    Meanwhile, the Department of Education has found that DeVry University, a for-profit college, misled at least 1,800 borrowers with false advertising about job placement rates.

    While Goddard, 45, considers himself “one of the lucky ones” who would qualify for $20,000 of debt relief, the cancellation wouldn’t make too much of a dent in his more than $150,000 balance.

    His debt, Goddard said, is “so detrimental” to his American dream, which was to buy a house and have a family.

    “I was stupid enough to fall for it,” Goddard said about taking out student loans.

    “I wish we could make it so nobody else in this country falls into the same trap,” he added.

    Now, he’s committed to helping others avoid borrowing so much money for college and volunteers with an organization that helps students pursue careers in STEM fields.

    One criticism of Biden’s one-time forgiveness program is that it would do nothing to address the cost of college for future students.

    A more permanent solution to the college affordability problem would have to be created by Congress, but lawmakers have failed to pass any sweeping measure. A provision to make community college free was dropped from Biden’s Build Back Better agenda before it came to a vote in the House in 2021.

    The Biden administration is also working on changes to existing federal student loan repayment plans, which don’t need congressional approval, and that aim to make it easier for borrowers to pay for college.

    The Department of Education is currently finalizing a new income-driven repayment plan to lower monthly payments as well as the total amount borrowers pay back over time. In contrast to the one-time student loan cancellation program, the new repayment plan could help both current and future borrowers.

    Additionally, in July, changes will be made to the Public Service Loan Forgiveness program, which allows certain government and nonprofit employees to seek federal student loan forgiveness after making 10 years of qualifying payments. The changes will make it easier for some borrowers to receive debt forgiveness.

    If the Supreme Court ultimately gives the student loan forgiveness program the green light, it’s possible the government will begin issuing some debt cancellations fairly quickly. The administration has said it already approved 16 million applications for relief.

    But several of the conservative justices expressed skepticism last week about whether Biden has the power to implement his student loan forgiveness program.

    Lawyers for the government have remained confident that their plan is legal. They point to a 2003 law passed after the September 11, 2001, terrorist attacks that grants the secretary of education power to make sure people are not worse off in respect to their student loans in the event of a national emergency.

    “I’m confident we’re on the right side of the law,” Biden told CNN a day after the oral arguments when asked if he was confident the administration would prevail in the case. “I’m not confident of the outcome of the decision yet.”

    If the Supreme Court strikes down Biden’s student loan forgiveness program, it could be possible for the administration to make some modifications to the policy and try again – though that process could take months.

    The pandemic pause on payments will remain in effect until either 60 days after the Supreme Court’s decision, or late August – whichever comes first.

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  • CFPB: What it does and why its future is in question | CNN Business

    CFPB: What it does and why its future is in question | CNN Business

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    New York
    CNN
     — 

    The US Supreme Court decided this week to hear a case that will consider the constitutionality of funding for the Consumer Financial Protection Bureau and, in doing so, test the constraints of US regulators’ power. The case would be heard in the fall, with a decision likely by summer 2024.

    But what is the CFPB? How does its work affect your wallet? And why is its future potentially at risk?

    The agency was created after the 2008 financial meltdown, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That law was passed in the wake of the 2007 subprime mortgage crisis and the Great Recession that followed.

    The broad purpose of the CFPB is to protect consumers from financial abuses and to serve as the central agency for consumer financial protection authorities.

    Prior to its creation, as the agency notes on its site, “[c]onsumer financial protection had not been the primary focus of any federal agency, and no agency had effective tools to set the rules for and oversee the whole market.”

    The CFPB has regulatory authority over providers of many types of financial products and services, including credit cards, banking accounts, loan servicing, credit reporting and consumer debt collection.

    It is charged with implementing and enforcing consumer protection laws, making rules and issuing guidance for consumer financial institutions. And it is the place consumers can go to lodge complaints about financial products and services.

    Importantly, Dodd-Frank also gave the agency new authority to determine whether any given consumer financial product or service is unfair, deceptive or abusive and therefore unlawful.

    While there are critics of the agency’s current structure and funding, it has saved consumers money, made it easier for them to seek redress and to get better clarity and more tailored responses from companies when they have a problem with their accounts, loans or credit reports.

    “It has completely changed the consumer financial marketplace. Overall it has had a tremendous impact on making it more fair and transparent,” said Lauren Saunders, associate director of the National Consumer Law Center.

    For instance, the CFPB has taken action against bank overdraft policies. “Arguably, the focus on overdraft practices has led some banks to eliminate or reduce their overdraft fees,” said Christine Hines, legislative director of the National Association of Consumer Advocates.

    And it has gone after institutions for saddling consumers with pointless products, excessive fees and punitive terms.

    Both Hines and Saunders made a special note of CFPB’s actions against Wells Fargo, after the agency found the bank had been engaging in multiple abusive and unlawful consumer practices across several financial products between 2011 and 2022 — from auto loans to mortgage loans to bank accounts.

    Last month, the agency required the bank to pay more than $2 billion to customers who were harmed by such practices, plus a $1.7 billion fine that will go into a relief fund for victims.

    “More than 16 million accounts at Wells Fargo were subject to their illegal practices, including misapplied payments, wrongful foreclosures, and incorrect fees and interest charges,” the agency said in a blog post.

    In the area of mortgages, “CFPB has written rules to implement new protections so that mortgage lenders don’t make loans with tricks and traps that lead people to lose their homes,” Saunders said.

    It also has created other safeguards, including rules on how service providers should communicate with borrowers who want to find alternatives to foreclosure, Hines noted.

    Currently, the agency is in the midst of an effort to curb excessive or “junk” fees on a range of consumer financial products, such as credit card late fees.

    Critics of the CFPB have been trying for years to limit its power and independence, attacking the way the agency is structured and funded. Like federal banking regulators, its funding is not determined by lawmakers in Congress as part of the annual appropriations process. Rather, it gets its money from the Federal Reserve System’s earnings.

    “This nontraditional funding source limits congressional oversight of the agency and is the subject of legal challenges,” according to the Congressional Research Service.

    The latest challenge — arising from a federal appeals court ruling that CFPB’s funding violates the Constitution’s Appropriations Clause and separation of powers — is what the Supreme Court will take up in its October term.

    While it’s impossible to predict how the justices will rule, should they decide to uphold the appeals court ruling, that will put in doubt how the agency will be funded going forward, and whether it can continue to function effectively.

    It’s also unclear whether the agency’s actions and rule-making over the past 11 years would be invalidated, nor what impact it would have on banks and other financial institutions that have set up systems to be in compliance with CFPB rules and safe harbors.

    “The agency would be unable to do anything if the funding is invalidated. And prior rules could be challenged as the agency did not have a legal funding source that it could use to write those rules,” Cowen Washington Research Group analyst Jaret Seiberg said in a note to clients.

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  • Biden administration tells student loan forgiveness applicants it is ‘confident’ in face of Supreme Court skepticism | CNN Politics

    Biden administration tells student loan forgiveness applicants it is ‘confident’ in face of Supreme Court skepticism | CNN Politics

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    CNN
     — 

    The Biden administration is projecting confidence about the fate of President Joe Biden’s student loan cancellation program in a message to applicants, even in the face of skepticism from conservative Supreme Court justices in Tuesday’s high-stakes oral arguments.

    Education Secretary Miguel Cardona said in an email sent to millions of borrowers who applied for debt cancellation that the administration “mounted a powerful case” in support of Biden’s executive action.

    “Our Administration is confident in our legal authority to adopt this plan, and today made clear that opponents of the program lack standing to even bring their case to court,” Cardona wrote in the email update obtained by CNN.

    The email update to applicants reflects a position administration officials have maintained in the wake of the oral arguments. But it also implicitly lays out the administration’s view of the political dynamics of a move that has became an immediate partisan flashpoint. As applicants and administration officials alike settle in for what will likely be months of waiting for a final decision, the update sent to roughly 7 million people also provides a window into the reach the administration would have to frame the debate – and consequences – should the program be struck down.

    Cardona’s message comes as millions of borrowers remain in limbo as they await a Supreme Court decision on whether Biden’s action to cancel up to $20,000 in student loan debt will stand.

    White House officials, who closely monitored the oral arguments in two challenges, have maintained the position that they will ultimately prevail in the cases that challenge Biden’s authority to discharge millions of dollars in federally held loans. While they remain confident on the merits, sources continue to highlight the view inside the administration that the plaintiffs lack standing to bring the challenges – which would render the arguments over the authority itself moot.

    One source familiar told CNN that the White House remains confident that things will go their way, simply saying: “We’ll win.”

    A particular flashpoint in the hearing was the states’ arguments that the loan forgiveness program’s potential harms to MOHELA – the Missouri-created entity that services loans in the state – gives Missouri standing.

    Justice Amy Coney Barrett stood out among the conservatives for asking particularly pointed questions of the GOP states about their standing arguments, setting her apart as a potential pickup vote for the court’s three liberal members.

    “If MOHELA is an arm of the state, why didn’t you just strong-arm MOHELA and say you’ve got to pursue this suit,” Barrett asked Nebraska Solicitor General James Campbell.

    The question was one of several directed at Campbell, who represented the group of Republican-led states that argue the administration exceeded its authority, about the states’ standing claims.

    Another source familiar said that Barrett’s comments only raised optimism within the administration.

    But as several conservative justices leveled sharp questions related the government’s authority on the matter, Cardona’s update appeared intended to assuage overarching concerns.

    It also previewed a political contrast officials will likely elevate should Supreme Court strike down Biden’s actions – one White House officials have repeatedly pressed as the challenges have made their way through the courts.

    “While opponents of this program would deny relief to tens of millions of working- and middle-class Americans, we are fighting to deliver relief to borrowers who need support as they get back on their feet after the economic crisis caused by the pandemic,” Cardona wrote.

    Biden’s plan would cancel as much as $10,000 in federal student loan debt for people earning less than $125,000 a year, or less than $250,000 for married couples. Individuals on Pell Grants could see up to $20,000 forgiven. In all, more than 40 million federal borrowers would qualify for some level of debt cancelation, with roughly 20 million who would have their balance forgiven entirely.

    The Biden administration received 26 million applications for the program, which has been frozen as the court battles have played out, and more than 16 million applications had already been approved.

    Cardona reiterated that a pause on federal loan payments, which was implemented during the Trump administration in response to the pandemic and was set to restart at the same time cancellation was implemented, remain on hold as the Supreme Court deliberations play out.

    “While we await the Supreme Court’s decision, the pause on student loan payments remains in effect,” Cardona wrote. “Payments will resume 60 days after the Supreme Court announces its decision.”

    If the litigation is not resolved by June 30, payments are scheduled to resume 60 days after that date. If it has not made a decision or resolved the litigation by June 30, payments will resume 60 days after that.

    The Supreme Court’s decision is expected to come this summer.

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  • Inflation is doing a crab walk and Fed officials fear its pinch | CNN Business

    Inflation is doing a crab walk and Fed officials fear its pinch | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    The possibility of a 2023 market rally ground to a halt last week amid an onslaught of unfortunate inflation and economic data that spooked investors and increased the likelihood that the Federal Reserve will continue its economically painful rate hikes campaign for longer than Wall Street hoped.

    All major indexes notched their largest weekly losses of 2023 on Friday. The S&P 500 fell by 2.7%. The Dow Jones Industrial Average sank 3%, and the tech-heavy Nasdaq fell 3.3%.

    What’s happening: It appears that after months of steady decline, the pace of inflation is going sideways. January’s Personal Consumption Expenditures price index – the Fed’s favored inflation gauge – came in hotter than expected on Friday.

    Prices rose a whopping 5.4% in January from a year earlier, the Commerce Department’s Bureau of Economic Analysis reported. In December, prices rose 5.3% annually.

    In January alone, prices were up 0.6% from the prior month, a higher monthly gain from December’s increase of 0.2%.

    This inflationary crab walk is almost certainly causing Fed officials to rethink their policy.

    A paper presented Friday at the Booth School of Business Monetary Policy Forum in New York argued that disinflation will likely be slower and more painful than markets anticipate.

    “Significant disinflations induced by monetary policy tightening are associated with recessions,” said the paper. “An ‘immaculate disinflation’ would be unprecedented.” (Immaculate, in this instance, refers to the possibility of inflation falling quickly to the Fed’s 2% goal without any serious economic damage).

    Several Fed presidents, governors and top economists were on hand at the Booth School forum to discuss the paper and monetary policy on Friday. The majority of those speaking expressed deep concern about the stubbornness of inflation and general market reaction.

    Inflation won’t quit: Cleveland Fed President Loretta Mester said that while price growth has moderated from its recent high, the overall pace of inflation remains too high and could be more persistent than her colleagues currently anticipate.

    “I anticipate further rate increases to reach a sufficiently restrictive level, then holding there for some, perhaps extended, time,” echoed Boston Fed President Susan Collins at the conference.

    Collins referred to inflation as “recalcitrant,” a loaded million-dollar word that means uncooperative, or defiant to authority.

    Fed Governor Philip Jefferson struck a more befuddled stance on Friday, observing that inflation continues to baffle economists. “The inflationary forces impinging on the US economy at present represent a complex mixture of temporary and more long-lasting elements that defy simple, parsimonious explanation,” he said. Parsimonious being another million-dollar word for frugal.

    Economists stressed that more pain lies ahead. “It’s important that markets understand that ‘no landing’ is not an option,” said Peter Hooper, vice chair of research at Deutsche Bank, an author of the report.

    While recent data has signaled that the US economy remains strong, “by the time we get to the middle of this year we expect to see some bad news coming and the sooner the markets get that message the more helpful it will be to the Fed,” he said.

    The final word: Former Bank of England Governor Lord Mervyn King summed up what many were thinking on Friday: Given the complexity of the current monetary situation, he said, “I wouldn’t want to give advice to any central banks about what we should do.”

    Researchers at the Federal Reserve Bank of New York have issued a dire warning: If President Joe Biden’s student loan forgiveness plan doesn’t come to fruition, the US could face another credit crisis.

    Some background: The Covid-19 crisis triggered a sudden shift in student loan policy and a new openness to forgiveness. In March 2020, Congress passed the CARES Act, which automatically paused required payments on all federally held student loans.

    That forbearance has since been extended eight times and is set to end as late as August, 40 months after it began.

    The Biden Administration had announced an unprecedented debt cancellation proposal which would provide relief to more than 40 million borrowers. An analysis by the New York Fed found that roughly $441 billion of federal student loans are eligible for forgiveness under the proposal, canceling about 30% of all outstanding federal student loan debt.

    That forgiveness proposal is now on hold after an injunction by the 8th US Circuit Court of Appeals. On Tuesday, The Supreme Court of the United States will hear the case with its decision expected by June 2023.

    What’s on the line: If the Biden Administration’s forgiveness plan survives the court challenge, it will mark the largest mass discharge of consumer debt in modern history, according to the New York Fed. About 40% of those with federal student loan debt would have a zero balance; even more would have a much smaller monthly payment.

    But, “if payments resume without debt relief, we expect both student loan default and delinquencies to rise and potentially surpass pre-pandemic levels,” warned Fed researchers.

    “We note a stark increase in new credit card and auto loan delinquency for borrowers with eligible student loans over the past few quarters, growing at a faster pace than those without student loans and those with ineligible loans,” they wrote.

    Those missed payments suggest that some federal student loan borrowers are having trouble meeting their monthly debt obligations. “We expect these delinquency patterns to worsen if federal student loan payments resume without relief,” said the report.

    The data “may be suggestive of problems to come, a sign of economic distress that may appear particularly concerning when the burden of student loan payments resumes.”

    Future concerns: If student loan borrowers expect future debt cancellation, they may borrow even more, said researchers, which would increase debt balances even more sharply. “Absent direct policies to address this growing burden, taxpayers may be again called to for relief in the future,” they concluded.

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  • Biden administration releases data breaking down student loan relief applications by congressional district | CNN Politics

    Biden administration releases data breaking down student loan relief applications by congressional district | CNN Politics

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    CNN
     — 

    The Department of Education released a breakdown of federal student loan forgiveness applications by congressional district on Friday, providing a new window into the demographics of borrowers seeking relief across both Republican and Democratic-represented districts.

    The new data is being released as the fate of President Joe Biden’s debt relief plan remains in limbo, with the US Supreme Court set to soon hear cases challenging its legality later this month. The initiative would offer up to $20,000 of individual debt forgiveness to millions of low- and middle-income borrowers, but ongoing legal challenges have meant that no one has received relief – including millions of borrowers whose applications have already been approved.

    The White House says the plan is vital in order to provide targeted debt relief to certain federal student-loan borrowers affected by the Covid-19 pandemic. But many Republicans say that the relief will make inflation worse and argue it’s unfair to individuals who didn’t take out student loans or have already paid them off. They’ve also criticized the administration’s legal justification for issuing the relief through executive authority.

    The Department of Education received about 26 million applications for debt relief by the time a federal district court judge blocked the program in November. More than 16 million of those borrowers’ applications were fully approved and more than 40 million borrowers would qualify for the program, according to the administration.

    “Across the country, in every congressional district there is a strong desire for the Biden-Harris Administration’s one-time debt relief program,” a Department of Education official said about the new data. “In every single congressional district, at least half of eligible borrowers either applied or were deemed auto-eligible for debt relief, and that was only in the one month that the application was available before the program got blocked because of lawsuits.”

    In every congressional district, the official said, at least 30% of eligible borrowers were approved to have their debt discharged before the program was blocked. Some 81% of all applications for relief came from the bottom 80% of congressional districts when broken down by average income, the official added.

    A new Politico analysis of additional zip code data from the department obtained though a public records request also shows that borrowers living in lower-income areas applied for relief at a higher rate compared to those who live in wealthier neighborhoods, and most applications came from places where the per-capita income is under $35,000. Non-White majority zip codes accounted for more forgiveness applications per capita than majority-White zip codes.

    Friday’s data build on earlier numbers released by the Department of Education which showed a state-by-state breakdown of student loan forgiveness applications, which were published shortly after independent auditors questioned the estimated cost of the program.

    The the latest release coincides with the Supreme Court planning to hear two cases pertaining to Biden’s student loan forgiveness program later this month, including one from several Republican-led states.

    Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina say that the Department of Education did not have the legal authority to issue such a cancellation. They argue that it violates the separation of powers and that Biden is using the pandemic as a pretext to mask his true goal of fulfilling a campaign promise to erase student-loan debt.

    They put forward several theories that they say allow them to get into court to challenge a program they argue unlawfully invokes Covid “to assert power beyond anything Congress could have conceived.”

    Another case being heard by the high court this month was brought by two individual borrowers – Myra Brown and Alexander Taylor – who are not qualified for full debt relief forgiveness and who say they were denied an opportunity to comment on Education Secretary Miguel Cardona’s decision to provide targeted student loan debt relief to some.

    Earlier this month, 126 House Republicans – led by Education and the Workforce Committee Chairwoman Virginia Foxx of North Carolina and South Carolina Rep. Jeff Duncan – filed an amicus brief opposing the debt forgiveness effort.

    According to the White House data, in Foxx’s district, approximately 61% of borrowers, some 46,300 people, applied or were automatically eligible for relief. In Duncan’s district, about 59% of borrowers, 51,400 people, applied or were automatically eligible for relief.

    A number of members in Republican leadership, including Majority Leader Steve Scalise, Majority Whip Tom Emmer, Conference Chair Elise Stefanik and Policy Committee Chair Gary Palmer also signed onto the brief.

    House Speaker Kevin McCarthy did not sign onto the brief, but he has been critical of the president’s plan.

    McCarthy’s home state of California, the most populous state in the nation, has 2.3 million people who have applied or were automatically eligible for relief – the most out of any state. Approximately 60% of borrowers in the speaker’s district applied or were automatically eligible for relief, with 31,600 borrowers already fully approved for relief out of 49,800 who have applied or were automatically eligible.

    Representatives for Foxx, Duncan, Scalise, Emmer, Stefanik, Palmer and McCarthy did not respond to CNN’s request for comment on the new data.

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  • China’s property crash is prompting banks to offer mortgages to 70-year-olds | CNN Business

    China’s property crash is prompting banks to offer mortgages to 70-year-olds | CNN Business

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    Hong Kong
    CNN
     — 

    The property market in China is so depressed that some banks are resorting to drastic measures, including allowing people to pay off mortgages until they are 95 years old.

    Some banks in the cities of Nanning, Hangzhou, Ningbo and Beijing have extended the upper age limit on mortgages to between 80 and 95, according to a number of state media reports. That means people aged 70 can now take out loans with maturities of between 10 and 25 years.

    China’s property market is in the midst of a historic downturn. New home prices had fallen for 16 straight months through December. Sales by the country’s top 100 developers last year were only 60% of 2021 levels.

    Analysts say the new age limits, which aren’t yet official national policy, aim to breathe life into the country’s moribund property market while taking into consideration China’s rapidly aging population, said Yan Yuejin, a property analyst at E-House China Holdings, a real estate services firm, in a recent research note.

    “Basically, it’s a policy tool to stimulate housing demand, as it can alleviate the debt payment burden and encourage home buying,” he added.

    The new mortgage terms are like a “relay loan.” If the elderly borrower isn’t able to repay, his or her children must carry on with the mortgage, he said.

    Last month, China reported that its population shrank in 2022 for the first time in more than 60 years, a new milestone in the country’s deepening demographic crisis with significant implications for its slowing economy. The number of people aged 60 or above increased to 280 million by the end of last year, or 19.8% of the population.

    The mortgage borrower’s age plus mortgage length should not usually exceed 70 years, according to previous rules published by the banking regulator. China’s average life expectancy is around 78.

    The China Banking and Insurance Regulatory Commission hasn’t commented publicly about the new terms.

    But bank branches across the country are setting their own terms on these multi-generational loans.

    According to the Beijing News, a branch of Bank of Communications in the city said borrowers as old as 70 can take out home loans lasting 25 years, which means the upper age limit on its mortgages has been lifted to 95.

    But there are also prerequisites: The mortgage needs to be guaranteed by the borrower’s children, and their combined monthly income must be at least twice the monthly mortgage payment.

    Separately, a branch of Citic Bank has extended the upper age limit on its mortgages to 80, the paper said, citing a bank client manager.

    Calls to the Beijing branches of Citic Bank and Bank of Communications were not answered.

    Hong Hao, chief economist at Grow Investment Group, said this was a “drastic” measure and “could be a marketing gimmick to attract the elderly to pay [mortgages] for the younger generation.”

    Yan from E-House said the main beneficiary of the move might not be the elderly, but middle-aged borrowers between 40 and 59. Under the extended payment cutoff age, those people could get a mortgage for 30 years — the maximum length allowed in China.

    Compared with previous terms, it means those borrowers could pay less each month.

    “It is obviously a way to alleviate the debt payment burden,” said Hong.

    According to calculations by E-House, if a bank extends the upper age limit to 80, borrowers aged from 40 to 59 can get 10 additional years on their mortgages. Assuming their mortgage is one million yuan ($145,416), then their monthly payment can be reduced by 1,281 yuan ($186), or 21%.

    Chinese households have grown reluctant to purchase new homes in the past year, as the now-defunct Covid curbs, falling home prices and rising unemployment have discouraged would-be buyers. Last summer, protests that erupted in dozens of cities were staged by people refusing to pay mortgages on unfinished homes, dealing a further blow to market sentiment.

    Authorities have rolled out a flurry of stimulus measures to try to revive the housing market, including several cuts to lending rates and measures to ease the liquidity crisis for developers — so that they can resume stalled construction and deliver pre-sold homes to buyers as quickly as possible.

    Other than Beijing, some banks in Nanning, the provincial capital of Guangxi province, have raised the upper age limit on mortgages to 80, according to the city’s official newspaper Nanguo Zaobao.

    In the eastern cities of Ningbo and Hangzhou, several local lenders are advertising age limits of 75 or 80, a relaxation from previous rules, according to reports by government-owned Ningbo Daily and Hangzhou Daily.

    “If the applicant is too old to meet the loan requirement, they can have their children as the guarantor,” a lender was quoted as saying.

    But Wang Yuchen, a real estate lawyer at Beijing Jinsu Law Firm, warned such mortgages were “risky.”

    It’s understandable that many cities are trying to revive their housing markets by reducing the monthly debt payment and enlisting more elderly people into the pool of home buyers, he said in a written commentary on his WeChat account.

    “But the elderly have relatively poor repayment ability. On the one hand, it could affect their quality of life in old age, as they continue carrying the mortgage debt mountain and work for the bank until the last moment of their lives,” he said. “On the other hand, the associated risks may be transferred to their children, increasing their financial pressure.”

    “For some home buyers, choosing this way to purchase a house is probably because of their lack of funds. But it’s risky to do so at this time,” he said, adding that the property market is in a structural downturn and the government is still working to curb speculation.

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  • Americans are becoming ‘reluctant’ to make larger purchases, new Fed report shows | CNN Business

    Americans are becoming ‘reluctant’ to make larger purchases, new Fed report shows | CNN Business

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    Minneapolis
    CNN
     — 

    As retail sales took a bit of a breather in December, so did the credit cards.

    US consumers’ outstanding credit grew by $11.56 billion to end the year, according to Federal Reserve data released Tuesday. It’s the lowest monthly gain since January 2021 and well below economists’ expectations of $25 billion.

    For much of 2022, consumer debt levels grew at record rates as pandemic-induced pent-up demand ran up against a period of rampant inflation.

    However, as the year drew to a close — and the Federal Reserve jacked up interest rates to combat inflation — that bullish spending activity was curtailed.

    “Long story short, we’re seeing a more cautious consumer,” Ted Rossman, senior industry analyst with Bankrate, told CNN.

    “Consumer spending certainly isn’t falling off a cliff, but we are seeing ample evidence that Americans are becoming more reluctant to make certain purchases, especially larger expenses and acquiring physical goods,” he said. “Services spending has been more robust, perhaps still owing to pent-up demand that stacked up during the pandemic for things like traveling and dining out.”

    Revolving credit balances, which is mostly credit cards, grew by 7.3% in December, according to Tuesday’s report. That’s the lowest month-on-month increase since the summer of 2021, Rossman noted.

    Still, those balances growing in a month when spending was down likely shows the toll taken by higher interest rates, Rossman said.

    The average credit card charges a record-high 19.95%, Rossman said, citing Bankrate data that also showed that 46% of card holders are carrying a balance from month to month. That’s up from 39% a year before.

    “Even if spending may be tailing off a bit, high inflation and higher interest rates are making balances harder to pay off,” he said. “More people are putting necessities on credit cards and financing these expenses over time.”

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  • Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

    Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

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    CNN
     — 

    President Joe Biden announced new progress Wednesday on his administration’s “competition agenda,” specifically taking aim at junk fees while calling on Congress to pass legislation targeting hidden fees across multiple industries.

    These costs can “drain hundreds of dollars a year from the pockets of hardworking American families, especially folks who are already struggling to make ends meet — but not anymore after today,” Biden said at the fourth meeting of the Presidential Competition Council on Wednesday.

    The proposed legislation in partnership with the Consumer Financial Protection Bureau, called the Junk Fee Protection Act, would target four types of excessive fees:

    • excessive online concert, sporting event and entertainment ticket fees
    • airline fees for families sitting together on flights
    • exorbitant early termination fees for TV, phone and internet services
    • surprise resort and destination fees

    In brief remarks before the meeting, Biden had called out credit card late fees in particular as “a junk fee if there ever was one,” saying the new guidance from the CFPB would reduce these fees.

    “Today’s rule proposes to cut those fees from $31 on average to $8,” he added. “That change is expected to save tens of millions of dollars for Americans, roughly $9 billion a year in total savings.”

    Biden called on Congress to pass the junk fee legislation, saying it would give “hardworking Americans just a little bit more breathing room.” It’s part of a plan, he added, to build “an economy that’s competitive and an economy that works for everyone.”

    Rohit Chopra, director of the CFPB, noted before the announcement that “over a decade ago, Congress banned excessive credit card late fees.”

    “But companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” he added in a statement to CNN. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”

    Another fee category that frustrates many customers is event tickets sold online, for which additional fees are frequently high — and typically appear late in the checkout process when a customer is about to make the purchase.

    For example, earlier this year, lawmakers grilled Live Nation president and CFO Joe Berchtold following a ticket sales debacle over exorbitant ticketing fees. Although the company said Wednesday it supports reform, it also said it opposes the proposed legislation.

    “We stand ready to work with the President and Congress on many common sense ticketing reforms, while also speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.

    Biden’s Transportation Department also took steps last fall during the previous meeting of the Competition Council to reduce “unnecessary hidden fees,” from airline and travel sites that the the President warned were “weighing down family budgets.”

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  • Federal student loan office has lots to do but no new money to do it | CNN Politics

    Federal student loan office has lots to do but no new money to do it | CNN Politics

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    Washington
    CNN
     — 

    Big headaches for student loan borrowers could be on the horizon.

    Their monthly payments could restart as early as this summer after a three-year pause. And the federal office that oversees the student loan system is operating under the same budget as last year – which could complicate any efforts to make sure the repayment process goes smoothly, as well as the office’s plans to overhaul the system.

    When Congress passed the government’s annual budget in December, the Federal Student Aid office got about $800 million less than what the Biden administration had asked for. After granting steady increases in previous years, lawmakers left funding for the office’s operations flat at about $2 billion.

    Republican lawmakers touted how Congress provided no new funding to help implement President Joe Biden’s controversial student loan forgiveness plan – which is currently tied up in the courts. If the Supreme Court allows the forgiveness program to move forward, it would also be a huge lift for the Federal Student Aid office.

    “I think it’s particularly unfortunate for borrowers that the political fight over loan forgiveness has resulted in flat funding this year,” said Jonathan Fansmith, assistant vice president of government relations at the American Council on Education, an advocacy group for colleges and universities.

    “Wherever the cracks start to show, borrowers are going to be impacted,” Fansmith added.

    The Federal Student Aid office, which has about 1,400 employees and provides about $112 billion in grant, work-study and loan funds annually, has a lot on its plate.

    The office oversees the $1.6 trillion federal student loan portfolio but has also taken on additional work to revamp the federal student aid application form, known as the FAFSA, and to overhaul some federal student loan programs. Last week, it announced a plan to start making significant changes to its income-driven repayment program this year.

    “I think certainly a number of their priorities will either not get done on the timeline that they had originally hoped for, or not get done at all,” said Michele Shepard, senior director of college affordability at The Institute for College Access and Success, an advocacy group.

    But the Department of Education says it can still meet the timelines it has set.

    “The several hundred-million-dollar shortfall will of course have an impact on these important bipartisan priorities, but we will continue to do everything we can with the available resources to better serve students and protect taxpayer dollars,” the department said in a statement sent to CNN.

    Still, that means the Federal Student Aid office would be doing more work with less money. Here are some of the tasks it is expected to tackle this year:

    Federal student loan borrowers have not had to make any payments since March 2020, thanks to a pandemic-related pause that has been extended by both the Trump and Biden administrations several times.

    Most recently, Biden extended the pause after his student loan forgiveness program was halted by federal courts. The administration had told borrowers debt relief would be granted before payments restarted.

    The payment pause will now last until 60 days after litigation over Biden’s student loan forgiveness program is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, payments will resume 60 days after that.

    Bringing roughly 44 million borrowers back into repayment at one time is an unprecedented task. Many people may be confused about how much they owe, when to pay and how. Missing payments can result in monetary fees.

    The government contracts with several outside organizations, such as MOHELA and Nelnet, to handle servicing the federal student loans. But it’s up to the Federal Student Aid office to communicate with the servicers about when payments restart and how.

    “To be kind, the quality of student loan servicing has not been stellar,” Fansmith said.

    “If you multiply all of these issues, even if small, by 44 million borrowers, it’s a massive national problem,” he added.

    In late February, the Supreme Court will hear arguments in two cases concerning Biden’s student loan forgiveness program, which could deliver up to $20,000 of debt relief for millions of low- and middle-income borrowers.

    A decision on whether the program is legal and can move forward is expected by June. Until then, it is on hold and no debt will be discharged under the program.

    Biden’s student loan forgiveness program has faced several legal challenges since the president announced it in August. The Department of Education had received about 26 million applications for debt relief by the time a federal district court judge struck down the program on November 10.

    The legal back-and-forth has created confusion for borrowers around the status of the program. Adding to the uncertainty, about 9 million people received an email from the Department of Education in the fall that mistakenly said their application for student loan forgiveness had been approved.

    The Biden administration has plans to overhaul some of its student loan repayment programs and the Federal Student Aid office is charged with rolling those out.

    In July, the Department of Education plans to implement permanent changes to the Public Service Loan Forgiveness program to make it easier for government and nonprofit workers to qualify for debt relief after making 10 years of payments. The program has long been plagued with loan servicing problems.

    Big changes to the department’s income-driven repayment plans are also in the works, aimed at reducing monthly debt burdens as well as the total amount borrowers pay over the lifetime of their loans.

    The new regulations are expected to cap payments at 5% of a borrower’s discretionary income, down from 10% that is offered under most current income-driven plans. As a result, single borrowers making less than $30,600 per year would not need to make any payments under the proposal, up from the current $24,000 threshold.

    The changes would also forgive remaining balances after 10 years of repayment, instead of 20 or 25 years, as well as cover the borrower’s unpaid monthly interest.

    The Department of Education said last week that it expects to start implementing some of these provisions later this year.

    Each year, as part of its normal work, the Federal Student Aid office processes millions of FAFSA applications from students. Generally, the form is released in October for the following academic year.

    Every college student needs to fill out the FAFSA in order to qualify for federal student loans, grants and work-study aid. But it has long been criticized as too long and complicated.

    Congress passed a law in 2021 that simplifies the FAFSA form, and the Federal Student Aid office has been working on implementing the changes – which financial aid experts hope will be done before October this year.

    The office was supposed to have had the changes already done, but the effective date was pushed back by a year.

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