Tag: iab-personal debt

The Grinch comes for retailers | CNN Business

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New York
CNN
—

Weaker-than-expected retail sales in November pummeled market sentiment on Thursday and raised the odds that the Federal Reserve’s inflation-fighting interest rate hikes would push the economy into recession.

What’s happening: US retail sales, which measure the total amount of money that stores make from selling goods to customers, fell 0.6% in November, the weakest performance in nearly a year. The drop concerned economists who had expected monthly sales to shrink by just 0.1%. It’s also a sharp reversal from October’s sales increase of 1.3%.

That’s a bad sign for the economy. Just last month Bank of America CEO Brian Moynihan told CNN that the continued strength of the US consumer is nearly single-handedly staving off recession. Consumer spending is a major driver of the economy, and the last two months of the year can account for about 20% of total retail sales — even more for some retailers, according to National Retail Federation data.

Market mania: The weak report means that spending faltered just as the holiday season started, a critical time for retailers to ramp up profits and get rid of excess inventory. Investors weren’t too happy about that.

Shares of Costco

(COST) closed Thursday 4.1% lower, Target

(CBDY) fell by 3.2%, Macy’s

(M) dropped 3.5% and Abercrombie & Fitch

(ANF) was down 6.2%.

The entire sector took a blow — the VanEck Retail ETF, with Amazon

(AMZN), Home Depot

(HD) and Walmart

(WMT)as its top three holdings, fell by 2.2%. The SPDR S&P Retail ETF, which follows all S&P retail stocks, was down 2.9%.

Weak sales are likely to continue, say analysts, and if they do, then retailers’ bottom lines and fourth-quarter earnings will suffer.

“The headwinds of the past year are catching up to consumers and forcing them to be more conservative in their holiday shopping this winter,” warned Morgan Stanley economist Ellen Zentner in a note.

The Fed factor: November’s report could indicate that consumers are feeling the double-punch of sky-high inflation and painful interest rate hikes from the central bank. This retail sales data adds to recessionary concerns, as it suggests that consumers may be becoming more cautious with their spending.

“Households are increasingly relying on their savings to sustain their spending, and many families are resorting to credit to offset the burden of high prices. These trends are unsustainable, and the current credit splurge is a true risk, especially for families at the lower end of the income spectrum,” said Gregory Daco and Lydia Boussour, economists at EY Parthenon.

While American bank accounts are still fairly robust, they’re beginning to dwindle. In the third quarter of 2022, credit card balances jumped 15% year over year. That’s the largest annual jump since the New York Fed began keeping track of the data in 2004.

“Against this backdrop, we expect consumers will rein in their spending further in coming months,” said Daco and Boussour. “Real consumer spending should see modest growth in the final quarter of the year, but we expect it will barely grow in 2023.”

Bottom line: If Bank of America’s Moynihan was right, the US economy is in trouble.

US mortgage rates came in lower once again this week, marking the fifth consecutive drop in a row.

The 30-year fixed-rate mortgage averaged 6.31% in the week ending December 15, down from 6.33% the week before, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.12%, reports my colleague Anna Bahney.

That’s a sharp reversal from the upward trend in rates we’ve seen for most of 2022. Those increases were spurred by the Federal Reserve’s unprecedented campaign of harsh interest rate hikes to tame soaring inflation. But mortgage rates have tumbled in the last several weeks, following data that showed inflation may have finally reached its peak.

The Fed announced on Wednesday that it will continue to raise interest rates — albeit by a smaller amount than it has been.

“Mortgage rates continued their downward trajectory this week, as softer inflation data and a modest shift in the Federal Reserve’s monetary policy reverberated through the economy,” said Sam Khater, Freddie Mac’s chief economist.

“The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand,” he added. “The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high.”

American regulators have been granted unprecedented access to the full audits of Chinese companies like Alibaba

(BABA) and JD.com

(JD) after threatening to kick the tech giants off US stock exchanges if they did not receive the data.

The announcement marks a major breakthrough in a yearslong standoff over how Chinese companies listed on Wall Street should be regulated. It will come as a huge relief for these firms and investors who have invested billions of dollars in them, reports my colleague Laura He.

“For the first time in history, we are able to perform full and thorough inspections and investigations to root out potential problems and hold firms accountable to fix them,” Erica Williams, chair of the Public Company Accounting Oversight Board, said in a statement Thursday, adding that such access was “historic and unprecedented.”

More than 100 Chinese companies had been identified by the US securities regulator as facing delisting in 2024 if they did not hand over the audits of their financial statements.

On Friday, China’s securities regulator said it’s looking forward to working with US officials to continue promoting future audit supervision of companies listed in the United States.

There are more than 260 Chinese companies listed on US stock exchanges, with a combined market capitalization of more than $770 billion, according to recent calculations posted by the US-China Economic and Security Review Commission.

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December 16, 2022
First Gen Z congressman-elect says he was denied DC apartment over bad credit | CNN Politics

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CNN
—

The congressman-elect set to become the first member of Generation Z to serve in Congress said Thursday his rental application for an apartment in Washington, DC, was denied because of his “really bad” credit.

“Just applied to an apartment in DC where I told the guy that my credit was really bad. He said I’d be fine. Got denied, lost the apartment, and the application fee. This ain’t meant for people who don’t already have money,” Maxwell Frost said in a tweet.

Frost, an Orlando-based community organizer, made history last month when he won election in Florida’s 10th Congressional District at just 25 years old. Frost surprised party leaders with his victory in a crowded primary filled with senior political figures to replace outgoing Rep. Val Demings, before comfortably winning against his Republican opponent in a solidly blue district.

In a Twitter thread, the congressman-elect expressed frustrations with relocating to the capital, saying that he has bad credit because he “ran up a lot of debt running for Congress for a year and a half” and that he did not make enough money working for Uber to pay for the cost of living.

Frost said that he quit his full time job during his race’s primary, because “I knew that to win at 25 yrs old, I’d need to be a full time candidate. 7 days a week, 10-12 hours a day. It’s not sustainable or right but it’s what we had to do.”

“As a candidate, you can’t give yourself a stipend or anything till the very end of your campaign,” he added. “So most of the run, you have no $ coming in unless you work a second job.”

CNN has reached out to Frost’s office for comment.

In comments to The Washington Post, Frost declined to identify the building, the size of his debt or credit score, but said the building where his application was rejected was in the city’s Navy Yard neighborhood, roughly a mile from the US Capitol. He said he lost the $50 application fee.

Frost is not the only incoming member of Congress to have struggled to find housing in DC.

On Twitter, he referenced New York Rep. Alexandria Ocasio-Cortez, who, in 2018 became the youngest woman elected to Congress at age 29 – and who also had a hard time as an incoming lawmaker finding affordable housing in Washington on her then-salary.

Frost pointed out that once his congressional salary kicks in, he’ll be fine, adding that “we have to do better” for others.

“I also recognize that I’m speaking from a point of privilege cause in 2 years time, my credit will be okay because of my new salary that starts next year,” Frost said. “We have to do better for the whole country.”

Members of the House and Senate earn $174,000 a year, according to the Congressional Research Service, but that salary will not begin until Frost is sworn in on January 3.

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December 9, 2022
Here’s what’s left for the Supreme Court’s final week of the term | CNN Politics

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Editor’s Note: A previous version of this story ran in early June.

CNN
—

All eyes are on the Supreme Court for its final week, as the justices will release cases on issues such as affirmative action, student loan payments, election law and LGBTQ rights.

Of the 10 cases remaining, several that most capture the public’s attention are likely to lead to fiery opinions and dissents read from the bench.

In addition, they will come down as the court finds itself in the center of a spotlight usually reserved for members of the political branches due to allegations that the justices are not transparent enough when it comes to their ethics disclosures, most recently with Justice Samuel Alito last week.

Here are some of the remaining cases to be decided:

The court is considering whether colleges and universities can continue to take race into consideration as a factor in admissions, a decision that could overturn long standing precedent that has benefited Black and Latino students.

At issue are programs at Harvard and the University of North Carolina that the schools say help them to achieve diversity on campus.

During oral arguments, the right side of the bench appeared ready to rule against the schools. Such an opinion would deliver a long-sought victory for opponents of affirmative action in higher education who have argued for decades that taking race into consideration – even in a limited manner – thwarts the goal of achieving a color-blind society.

John Roberts skewers Harvard attorney’s comparison of race and music skills as qualities in applicants

At the center of another case is a graphic designer, Lorie Smith, who seeks to expand her business and create custom websites to celebrate weddings – but does not want to work with gay couples out of religious objections to same-sex marriage.

Smith has not yet moved forward with her new business venture because of Colorado’s public accommodations law. Under the law, a business may not refuse to serve individuals because of their sexual orientation. Smith, whose company is called 303 Creative LLC, said that she is willing to work with all people, regardless of their sexual orientation, but she draws the line at creating websites that celebrate same-sex marriage because expressing such a message would be inconsistent with her beliefs.

The state and supporters of LGBTQ rights say that Smith is simply seeking a license to discriminate.

The conservatives on the court were sympathetic at oral arguments to those put forward by Smith’s lawyer. They viewed the case through the lens of free speech and suggested that an artist or someone creating a customized product could not be forced by the government to express a message that violates her religious beliefs.

Moore v. Harper has captured the nation’s attention because Republican lawmakers in North Carolina are asking the justices to adopt a long dormant legal theory and hold that state courts and other state entities have a limited role in reviewing election rules established by state legislatures when it comes to federal elections.

The doctrine – called the Independent State Legislature theory – was pushed by conservatives and supporters of Trump after the 2020 presidential election.

The North Carolina controversy arose after the state Supreme Court struck down the state’s 2022 congressional map as an illegal partisan gerrymander, replacing it with court-drawn maps that favored Democrats. GOP lawmakers appealed the decision to the US Supreme Court, arguing that the North Carolina Supreme Court had exceeded its authority.

They relied upon the Elections Clause of the Constitution that provides that rules governing the “manner of holding Elections for Senators and Representatives” must be prescribed in “each state by the legislature thereof.”

Under the independent state legislature theory, the lawmakers argued, state legislatures should be able to set rules with little to no interference from the state courts.

The justices heard oral arguments in the case last winter and some of them appeared to express some support for a version of the doctrine. The justices could, however, ultimately dismiss the dispute due to new partisan developments in North Carolina.

After the last election, the North Carolina Supreme Court flipped its majority to Republican. In April, the newly composed state Supreme Court reversed its earlier decision and held that the state constitution gives states no role to play in policing partisan gerrymandering. After that decision was issued, the justices signaled they may dismiss the case.

Anita Hill: America “has lost confidence in the Supreme Court”

The Supreme Court is also considering two challenges to President Joe Biden’s student loan forgiveness program, an initiative aimed at providing targeted debt relief to millions of student-loan borrowers that has so far been stalled by legal challenges.

Republican-led states and conservatives challenging the program say it amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

At the heart of the case is the Department of Education’s authority to forgive the loans. Several of the conservative justices have signaled in recent years that agencies – with no direct accountability to the public – have become too powerful, upsetting the separation of powers.

They have moved to cut back on the so-called administrative state.

In court, Chief Justice John Roberts as well as some other conservatives seemed deeply skeptical of the Biden administration’s plan.

A former mail carrier, an evangelical Christian, seeks to sue the US Postal Service because it failed to accommodate his request not to work on Sundays.

A lower court had ruled against the worker, Gerald Groff, holding that his request would cause an “undue burden” on the USPS and lead to low morale at the workplace when other employees had to pick up his shifts.

There appeared to be consensus, after almost two hours of oral arguments, that the appeals court had been too quick to rule against Groff.

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April 12, 2021
Biden’s student loan forgiveness program was rejected by the Supreme Court. Here’s what borrowers need to know | CNN Politics

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Washington
CNN
—

The Supreme Court struck down President Joe Biden’s student loan forgiveness program Friday, blocking millions of borrowers from receiving up to $20,000 in federal student debt relief, just months before student loan payments are set to restart after a yearslong pause.

Biden had announced the student loan forgiveness program last August, but it never took effect, having been tied up in the courts for months.

Later Friday, the president announced that his administration will pursue another pathway to providing some student debt relief, which is based on a different law than the one the now-defunct student loan forgiveness program was linked to.

This pathway requires the Department of Education to undertake a formal rule-making process, which typically takes months. Details were not released Friday on who might benefit if that process is successful.

Biden also announced that the administration will take steps to ease the transition period for borrowers when monthly student loan repayments resume in October. This “on-ramp” period will help borrowers avoid penalties if they miss a payment during the first 12 months.

The Biden administration has made it easier for many borrowers to seek federal student loan forgiveness from several existing debt cancellation programs.

New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers.

And a new income-driven repayment plan proposal is meant to lower eligible borrowers’ monthly payments and reduce the amount they pay back over time. The administration said this plan was finalized Friday and borrowers will be able to take advantage of it this summer, before loan payments are due.

The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.

Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.

Regardless of the way the Supreme Court ruled on the one-time forgiveness program, the Biden administration had said that student loan payments will be due starting in October.

Most student loan borrowers have not been required to make payments on their federal student loans since March 2020, when Congress passed a sweeping aid program to help people struggling financially because of the Covid-19 pandemic.

Since then, the pause has been extended eight times – under both the Trump and Biden administrations.

A law passed in early June that addresses the debt ceiling prohibits another extension of the pause.

But the Biden administration said Friday that it will provide a 12-month on-ramp period for borrowers reentering payment.

“Borrowers who can make payments should do so as payments will resume and interest will accrue,” Education Secretary Miguel Cardona said in a statement.

“But the on-ramp to repayment will help borrowers avoid the harshest consequences of missed, partial, or late payments like negative credit reports and having loans referred to collection agencies,” he added.

Borrowers will not be reported to credit bureaus, be considered in default or referred to collection agencies for late, missed or partial payments during the on-ramp period, according to a fact sheet from the White House.

Student loan experts recommend that borrowers reach out to their student loan servicer with any questions about their loans as soon as possible.

After such a long pause, many borrowers may be confused about how much they owe, when to pay and how. Millions of borrowers will have a different servicer handling their student loans since the last time they made a payment.

Borrowers should also reach out to their servicer if they are worried they will not be able to afford their monthly payment. They may be eligible for an income-driven repayment plan, which set payments based on income and family size, but require borrowers to submit some paperwork.

Federal student loan borrowers can check the FSA website for updates on resuming payments.

Borrowers will also have to reauthorize the automatic debit from their accounts to pay their monthly loan bill even if they authorized the withdrawals before the pause began.

The National Association of Student Financial Aid Administrators warns that borrowers may need to have patience when contacting their student loan servicer, which might be overwhelmed with a high volume of inquiries at this time.

“It is possible you may not reach your servicer via phone the first time you call, and you may need to call a few times before getting connected,” the group says.

No debt had been canceled, even though the Biden administration had received about 26 million applications for relief last year and approved 16 million of them.

The forgiveness program, estimated to cost $400 billion, would have fulfilled a campaign promise of Biden’s to cancel some student loan debt. But a group of Republican-led states and other conservative groups took the administration to court over the program, claiming that the executive branch does not have the power to so broadly cancel student debt in the proposed manner.

Critics also point out that the one-time student loan forgiveness program does nothing to address the cost of college for future students and could even lead to an increase in tuition. Some Democrats joined Republicans in voting for a bill to block the program. Both the Senate and the House passed the measure, but Biden vetoed the bill in early June.

Under Biden’s student loan forgiveness proposal, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year would have seen up to $10,000 of their federal student loan debt forgiven.

If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual would have been eligible for up to $20,000 of debt forgiveness.

Pell grants are awarded to millions of low-income students each year, based on factors including their family’s size and income and the cost charged by their college. These borrowers are also more likely to struggle to repay their student debt and end up in default.

The administration estimated that roughly 20 million borrowers would have seen their entire federal student loan balance wiped away.

An independent analysis from the Penn Wharton Budget Model found that about two-thirds of the student debt cancellation would have gone to households making $88,000 a year or less.

This story has been updated with additional information.

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April 12, 2021
The Supreme Court just handed Joe Biden a series of setbacks. It may have also given Democrats new motivation to reelect him | CNN Politics

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CNN
—

President Joe Biden wasn’t planning to take questions on Thursday. His helicopter was waiting outside on the White House’s South Lawn.

But after a 10-minute statement on the Supreme Court’s affirmative action ruling, a CNN reporter called out, “Is this a rogue court?” The president stopped in his tracks.

Pausing to think a moment, he looked over his shoulder. “This is not a normal court,” he said before leaving.

This week’s monumental rulings – striking down affirmative action in college admissions and unraveling Biden’s student debt relief plan among them – amount to serious setbacks for a president who promised as a candidate to advance racial equity and erase student debt.

They are also an urgent reminder to Democrats of the enduring consequences of elections at a moment Biden’s advisers are searching for ways to inject enthusiasm into his bid for another term.

What impact that will have on the coming election remains unknown. But Biden and his team have already begun assigning blame on Republicans for dismantling programs that have benefited young, college-educated and minority voters – all critical components of the Democratic coalition Biden will need to mobilize if he hopes to win reelection.

That three justices within the court’s conservative majority were appointed by President Donald Trump – both Biden’s predecessor and, according to polls, his most likely opponent next year – creates even more of an impetus for Biden to use the rulings as a political cudgel as his campaign heats up.

“The excesses of the Supreme Court are going to backfire,” said Rep. Ritchie Torres, a New York Democrat. “You know, the Supreme Court’s decision to overturn Roe versus Wade reduced what was supposed to be a red wave in the 2022 election cycle to nothing more than a red trickle. So not only is the Supreme Court’s decision bad law, it’s also bad politics and it’s going to come back to haunt the Republican Party.”

Speaking to a group of Democratic donors in New York City on Thursday evening, Biden sought to underscore the stakes of the court’s new supermajority, a preview of how he’ll frame the issue over the coming year.

“The Supreme Court is becoming not just conservative, but almost – it’s like a throwback. It’s like a throwback, some of the decisions they’re making,” Biden told donors in a private dining room inside the Seagram Building. “Did you ever think we’d be in a position, after 50 years of acknowledging the right of privacy in the Constitution, suggesting that there’s no such thing as the right to privacy?”

Despite his criticism of the court, Biden has rejected some liberal suggestions on reforming the panel. He opposes expanding the number of justices that sit on the court and hasn’t embraced term limits.

“If we start the process of trying to expand the court, we’re going to politicize it, maybe forever, in a way that is not healthy,” Biden said during a friendly interview on MSNBC shortly after Thursday’s decision on affirmative action.

Biden’s student loan plan, which came about last year after months of agonizing internal debate over its costs and eligibility criteria, was intended to free low- and middle-income Americans from crippling debt.

Throughout the process, Biden expressed concern at being seen as offering a handout to the wealthy. Eventually, pressure to fulfill one of his top campaign promises led to the plan to forgive up to $20,000 in student loan debt for certain borrowers.

For months the White House publicly said there was no alternative plan if the Supreme Court struck down the student debt relief program. But behind the scenes, top White House officials were working for several weeks to fulfill a simple directive from the president to “be ready in the event the Supreme Court did not do the right thing,” White House officials said.

The president’s charge to his team was described as this: “If the court ruled against the program, find other ways to deliver relief for as many working and middle-class borrowers as possible, accounting for all the legal issues.”

For the past few weeks, White House chief of staff Jeff Zients gathered his team for weekly meetings to map out all scenarios for the Supreme Court’s ruling and explore all legal avenues available to them after the president told his team to build a “fully developed response” to all possible rulings, officials said.

Zient’s office – led by deputy chief of staff Natalie Quillian, the Domestic Policy Council, National Economic Council and White House Counsel’s Office – worked with the Department of Education and the Department of Justice to come up with options the administration could take if the ruling was not in their favor.

“All of these meetings were structured around one question – how would we be able to deliver relief to as many borrowers as we could, as quickly as possible under any possible outcome of the Supreme Court,” official said.

The White House also stayed in touch with and fielded suggestions for next steps from debt relief advocate groups and congressional allies throughout the process. Lawyers from the White House, Justice Department and Education Department examined all of the recommendations, including administration action and the legal authorities available to the administration, and ultimately crafted responses for multiple scenarios.

Inside the White House, some officials had held out hope the court would uphold Biden’s student debt program, pointing to some surprising decisions over the past weeks that saw some conservative justices joining liberals on issues of voting rights and congressional redistricting.

But even Biden acknowledged after the court’s oral arguments in February he wasn’t certain the ruling would go his way.

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

His instinct was correct. The president was in the Oval Office on Friday morning when he was informed of the Supreme Court’s decision by his senior aides and then engaged in meetings stretching into the afternoon to fine-tune their response after the ruling was not in their favor.

Ultimately, the president directed his team to move forward with a new plan, which includes pursuing a new path for debt relief through the authorities in the Higher Education Act of 1965, which was promoted by some debt relief advocate groups and progressive lawmakers, as well as creating a temporary 12-month “on-ramp repayment” program for federal student loan borrowers when payments resume in October.

A day earlier, Biden was watching the news on television when the affirmative action decision was handed down by the court, according to an official. A team from the White House counsel’s office came to brief him on the ruling.

“In our conversations with the White House about why student debt cancelation was needed, it’s about reducing the racial wealth gap,” said Wisdom Cole, national director of the Youth & College division at the NAACP. “If the administration is committed to diversity, equity, and inclusion, they must use every tool in their toolkit. Every legal authority to ensure that we see relief happen.”

Demonstrating urgency in responding to the court’s actions was a key objective as the White House prepared for both rulings, according to people familiar with the matter.

Looming over the preparations was the impression left after last year’s Supreme Court term that the Biden administration was unprepared for the decision striking down the nationwide right to abortion, despite a leaked court opinion months ahead of time indicating the justices were prepared to overturn Roe v. Wade.

The White House has strongly denied it was caught flat-footed on abortion and has pointed to actions taken in the months after the decision to expand access, including to medication abortion.

The issue proved galvanizing to Democratic voters in November’s midterm elections and has propelled Democratic victories even in traditionally Republican districts.

Whether the court’s ruling on student debt relief and affirmative action can have a similar effect will prove critical over the coming year, as Biden works to convince voters he is still fighting to fulfill his promises. Initial reaction from progressive Democrats was positive.

“It was not a foregone conclusion that the President would act so swiftly today. But he announced an alternative path to student debt cancellation by using his Higher Education Act authority given by Congress – and that deserves praise,” said Adam Green, co-founder of the Progressive Change Institute.

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April 12, 2021
Biden has already canceled $66 billion in student loans. Here’s how 3 people received debt relief | CNN Politics

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Washington
CNN
—

Even though the Supreme Court struck down President Joe Biden’s student loan forgiveness program, more debt will be canceled during his time in office than under any other president.

The Biden administration has already canceled a record $66 billion in student loan debt for nearly 2.2 million borrowers.

While his one-time student loan forgiveness program would have been far reaching, promising up to $20,000 of debt cancellation for eligible borrowers and wiping out roughly $400 billion overall, the Department of Education has made some lesser-known changes to existing student loan forgiveness programs.

The administration has made it easier for people to qualify for the Public Service Loan Forgiveness program, which grants relief for public sector workers after they’ve made 10 years of qualifying payments.

It has also made more people eligible for the borrower defense to repayment program that cancels student loan debt for borrowers who attended a school that may have misled them or violated certain state laws, as well as made loan discharges automatic for more borrowers who are permanently disabled.

Here’s how three people received student loan forgiveness due to the changes the Biden administration has made to existing federal programs.

Margo Myles, 52, got a letter from the Department of Education in late March saying that nearly $25,000 of her federal student loan debt had been canceled.

Myles had borrowed the money in the early 2000s to earn an associate degree in paralegal studies, but the education didn’t pay off. She found work in the legal field a few years after finishing school but was earning just $9 an hour – not enough to pay her bills and her student loans.

“I was trying to reorganize my life. For me, and for so many other students, this should have been a door,” Myles said of her degree program.

Instead, she defaulted on her student loans. The default dinged her credit and resulted in the garnishment of her federal tax refunds. Myles said she wasn’t allowed to request her academic transcript while her loans were in default, preventing her from enrolling elsewhere.

The Department of Education later found that schools owned by the now-defunct Corinthian Colleges – which include Myles’ alma mater, known at the time as Florida Metropolitan University – engaged in “widespread and pervasive misrepresentations” about students’ employment prospects, including guarantees they would find a job as well as the ability to transfer credits.

Under the borrower defense program, borrowers can apply for debt relief if they were misled by their college. Last June, the Department of Education announced that any student who attended a Corinthian-owned college would automatically qualify for the benefit. The move made 560,000 more borrowers eligible.

About nine months later, Myles learned that she was one of the qualifying borrowers and her debt was discharged. The Department of Education said it would request credit reporting agencies to repair her credit within 45 days, according to the letter she received.

Myles, who now lives in Cheyenne, Wyoming, and works in insurance, plans to continue her education by pursuing a bachelor’s degree and then a law degree.

“I’ve always wanted to go back to school. I don’t care if I’m 60 when I finish,” she said.

Applying for the Public Service Loan Forgiveness program was a yearslong, frustrating process for Paige Vass, a special education teacher in Virginia.

The PSLF program cancels remaining federal student loan debt for eligible government and nonprofit workers after they have made 120 qualifying monthly payments, which takes at least 10 years.

But the program has been riddled with problems. Many people reached 10 years of repayment believing they qualified for cancellation of their remaining debt, but instead found out that they had the wrong kind of loan or were making payments in the wrong kind of repayment plan.

Vass applied after teaching for more than 10 years, but her paperwork was returned several times, for things like having an incorrect date or a signature in the wrong place.

She decided to try applying one more time last year after the Biden administration temporarily expanded eligibility for the program with a one-year waiver.

“My fingers were crossed, but I also thought I might be chasing a unicorn,” Vass, 47, said.

“But I was like, I’ve got to try. This is a huge debt and a huge weight on our family,” she added. She and her husband, who is also an educator, have two children.

This spring, not only did Vass find out that she qualified for more than $30,000 in debt relief, but she is also set to receive a refund of about $5,000 because she had overpaid. Under the rules of the temporary waiver, she had made more payments than the 120 required for debt forgiveness.

The debt relief means she may be able to spend more time with her kids. In the past, when she’s owed hundreds of dollars for her student debt each month, she’s worked summer school, taught skiing and worked for the on-demand delivery company DoorDash for some extra cash.

“There’s been so many changes and so many hardships for teachers over the last three years. To me (the loan forgiveness) felt like a statement on behalf of our country’s administration that says, ‘You are valuable and we appreciate what you do, and you do make a difference,’” Vass said.

Last year, Charles Goldenberg, a radiologist in New York City, got an email notifying him that his more than $340,000 in federal student loan debt had been canceled because he qualified for the PSLF program.

While in training, and making little money, Goldenberg was paying off his loans through an income-driven repayment plan, which lowered his monthly payments. But those payments hardly covered the interest accumulation, and his balance ballooned before the pandemic pause went into effect in 2020.

Now, at 42, Goldenberg said the student debt cancellation gives him the opportunity to move on with his life.

“And I think that’s the whole point of the PSLF program. You spend years of training and schooling above and beyond college, making less money than you would when you’re out of training. It’s not without sacrifice. It’s because you work for eligible employers … where you’re not going to be making the kind of money that I make now,” he added.

Goldenberg had been paying off some his loans for 19 years, but not every payment had counted toward the PSLF program until he consolidated his loans about two years ago.

Thanks to the one-year waiver put in place by the Biden administration, some payments he made earlier became eligible.

Applying for the relief had also been a long process for Goldenberg. His loan servicer had difficulty verifying that one of his employers, a nonprofit hospital in Miami, qualified for the program. He eventually found proof on the Department of Education’s website that the hospital did qualify.

Now that Goldenberg is done with training and is earning more money, his student loan payments would be much higher when the pandemic-related pause ends later this year than they were three years ago. He expects they would be $2,500 or more a month if not for the debt relief.

“Now I can use the money that I make for myself, for a mortgage, for family, for other expenses, for retirement. So it really opened up my financial future in a big way,” he said.

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April 12, 2021
Why there won’t be a backlash against the Supreme Court this time | CNN Politics

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The Supreme Court handed down several key rulings this past week that dismayed liberals. Chief among them was the court’s decision to disallow colleges and universities from using race or ethnicity as a specific factor in admissions. The court also found that President Joe Biden’s student debt forgiveness plan was unconstitutional and that a Colorado web designer could refuse to create websites that celebrate same-sex weddings over religious objections.

Unlike last year, when the Supreme Court greatly upset liberals by overturning Roe v. Wade, this year’s big rulings by the justices are unlikely to spark a major backlash from the public at large.

This is well reflected in the public polling. Roe v. Wade, the 1973 decision that legalized abortion nationwide, had become massively popular.

Right before the decision to overturn Roe leaked in May 2022, a Fox News poll found that 63% of registered voters were opposed to such a move while 27% supported it. An ABC News/Washington Post poll put the split at 54% wanting the court to uphold Roe and 28% wanting the decision overturned.

This majority of Americans who wanted abortion to be legal nationally have maintained their stance since the Supreme Court officially struck down Roe in June 2022. Since that time, abortion supporters have won every related measure placed on the ballot across the country – from deep-blue states like California to ruby-red ones like Kentucky.

California is an important state to note because voters there faced a 2020 ballot measure to consider the use of race, sex or ethnicity in government institutions (such as education). A clear majority, 57%, voted against allowing state and local entities to consider such factors in public education, employment and contracting decisions.

When a state that voted for Biden by nearly 30 points is against affirmative action, it shouldn’t be surprising that the nation as a whole is.

A Pew Research Center poll released last month found that 50% of Americans disapproved of certain colleges and universities taking race and ethnicity into account in admissions decisions to increase diversity. Only 33% approved of the practice.

This Pew poll is no outlier. An ABC News/Ipsos poll conducted after the court decided its case showed that 52% of Americans approved of the decision, while 32% were opposed.

Some polling before the ruling had shown even more opposition: 70% of Americans in a recent CBS News/YouGov survey indicated that the Supreme Court should not allow colleges to consider race and ethnicity in admissions.

But perhaps what’s most interesting isn’t how many people are for or against considering race in college admissions. Rather, it’s how many people simply didn’t care enough to pay close attention to the affirmative action case before the Supreme Court.

When explicitly given the option, a majority (55%) said in a May Marquette University Law School poll that they hadn’t heard enough to form an opinion about the case. (Those who had heard enough were against allowing colleges to use race in admissions.)

This is quite different from March 2022, when just 30% of Americans hadn’t heard enough to form an opinion about the court potentially overturning Roe v. Wade, when asked the same question by Marquette but about the abortion case. (A plurality of those who had heard enough didn’t want the court to overturn Roe.)

It’s hard for an issue to galvanize voters when they aren’t paying attention to it.

The same holds true for Biden’s student loan forgiveness plan that the court blocked. A USA Today/Ipsos poll from April indicated that 52% of Americans were familiar with the case and a mere 16% were very familiar with it. (Those who had student loans were more familiar at 71%, though that’s a fairly low percentage for something that could affect them directly.)

Possibly because of that low familiarity, the percentage of Americans who favor or oppose canceling certain student debt differs greatly depending on how the question is worded. When Marquette didn’t mention Biden or the government specifically in its May poll, a majority (63%) said they favored forgiveness of up to $20,000. It was a much lower 47% in the Ipsos poll.

Surveys that did identify the proposal as Biden’s plan tend to be in the same ballpark, with a split public and a sizable percentage unsure.

The ABC News/Ipsos poll showed that 45% approved of the court striking down Biden’s student debt plan, with 40% disapproving. About a sixth (16%) of the public was undecided.

This jibes with polling before the court’s decision was announced. An NBC News poll from last year showed that 43% said Biden’s plan was a good idea compared with 44%, who said it was a bad idea. Just over 10% had no opinion.

The USA Today/Ipsos survey found that 43% of Americans wanted the Supreme Court to allow the government’s student loan forgiveness plan to move forward, while 40% did not. Another 17% had no opinion.

(I should point out that those with student debt were more likely to want government forgiveness in all these surveys, though about 80% of Americans don’t have student loan debt.)

The public was similarly split about the court ruling in favor of the Colorado web designer who refuses to make wedding websites for same-sex couples over religious objections. According to the ABC News/Ipsos poll, 43% of Americans agreed with the court’s decision, 42% disagreed and 14% were undecided.

There was limited polling on this case before the ruling, though none of it indicated massive opposition. A majority (60%) in a Pew poll that specifically mentioned “wedding websites” and “same-sex marriages” indicated they believed business owners should be allowed to refuse services if it violated their religious or personal beliefs.

The polling on Roe v. Wade didn’t look anything like this last year. There were no close splits in opinion. People were consistently against overturning Roe, and they cared a lot about it. This led to a historically strong performance for the party in the White House during the 2022 midterm elections and a major backlash against the Supreme Court.

The current polling on affirmative action in college admissions, Biden’s student loan forgiveness plan and allowing people to opt out of certain services to married LGBTQ couples if they believe it goes against their religion suggests that court’s opinions on those issues aren’t likely to have a similar impact.

This story has been updated with additional information.

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April 12, 2021
Biden’s student loan forgiveness program faces a new threat from Senate Republicans | CNN Politics

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President Joe Biden’s student loan forgiveness program may face a new threat from Senate Republicans even before the US Supreme Court rules on whether it can be implemented.

Republican Sens. Bill Cassidy of Louisiana, Joni Ernst of Iowa and John Cornyn of Texas are planning to introduce a resolution to overturn Biden’s debt relief program, which promises up to $20,000 of debt relief for eligible borrowers, as soon as this week.

Biden would very likely veto the measure if it succeeds in both the Senate and House. But votes would force members of his own party, who have not all been in support of the student loan forgiveness program, to take a public stance.

The program is currently blocked. The Supreme Court is expected to issue its ruling in late June or early July.

“President Biden’s student loan scheme does not ‘forgive’ debt, it just transfers the burden from those who willingly took out loans to those who never went to college, or sacrificed to pay their loans off,” Cassidy said in a statement.

The Republican senators plan to introduce their resolution using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

It was unclear whether the Congressional Review Act would apply to Biden’s student loan forgiveness program until the Government Accountability Office made a determination on the matter earlier this month.

Biden issued his first veto last week concerning a retirement investment resolution, which was also brought under the Congressional Review Act.

While many key Democratic lawmakers have urged Biden to cancel some federal student loan debt, not every member of the party has been supportive.

Sen. Catherine Cortez Masto, a Democrat from Nevada who won a competitive reelection race last year, has previously been critical of Biden’s forgiveness plan.

“I’ll review the full text of the CRA when it is released, but like I said before, I disagree with President Biden’s executive action on student loans because it doesn’t address the root problems that make college unaffordable,” she said in a statement sent to CNN.

Her statement was first reported by The Wall Street Journal.

Democratic Sen. Joe Manchin of West Virginia has previously called Biden’s student loan forgiveness program “excessive.” His office did not respond to a request for comment for this story.

Biden’s one-time student debt forgiveness program is estimated to cost $400 billion over time.

Individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.

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 awarded to students from very low-income families who are more likely to struggle paying back their student loans.

While the debt relief would help borrowers with student loans now, the program wouldn’t change the cost of college in the future – and some critics argue that it could even lead to an increase in tuition. A separate proposal from Biden, expected to take effect later this year, would create a new income-driven repayment plan that could lower monthly payments for both current and future borrowers.

The legal challengers to the student loan forgiveness program argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief – though no debt has been canceled yet. It’s possible the government moves quickly to forgive those debts if it gets the green light from the Supreme Court.

If the justices strike 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.

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April 12, 2021
House passes bill to block Biden’s student loan forgiveness program | CNN Politics

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Washington
CNN
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The Biden administration’s one-time student loan forgiveness program is facing a fresh threat from House Republicans while it awaits a ruling from the Supreme Court about whether the proposal can take effect.

The House voted Wednesday to pass a resolution seeking to block the forgiveness program as well as end the pandemic-related pause on federal student loan payments.

Two Democrats, Rep. Jared Golden of Maine and Rep. Marie Gluesenkamp Perez of Washington, joined Republicans in voting for the bill.

The proposed forgiveness program, which promises up to $20,000 in federal student debt relief to millions of low- and middle-income borrowers, was halted by lower courts late last year before any student debt was canceled. The pause on payments, which has been in place since March 2020, is set to end later this year.

President Joe Biden has pledged to veto the Republican-led resolution if it passes in both the House and Senate. The administration said that the resolution would “weaken America’s middle class.”

“The president’s plan is a good one. It’s a popular one. And it will help prevent borrowers from default when loan payments restart this summer,” said White House press secretary Karine Jean-Pierre earlier Wednesday.

But Republicans argue that the student loan forgiveness program is unlawful and shifts the cost of the debt to taxpayers who chose not to go to college or already paid off their student loans. Blocking the program could reduce the deficit by nearly $320 billion, according to the Congressional Budget Office.

“President Biden’s so-called student loan forgiveness programs do not make the debt go away, but merely transfer the costs from student loan borrowers onto taxpayers to the tune of hundreds of billions of dollars,” said Rep. Bob Good, a Republican from Virginia, in a statement released when he introduced the resolution in March.

Even though Biden has pledged to veto the bill, votes in the House and Senate could force more moderate members of the Democratic Party to take a public stance regarding the student loan forgiveness program. Some lawmakers have been critical of the proposal in the past.

The Senate has yet to schedule a vote on the resolution, but nearly all of the 49 Republican senators have signed on as sponsors.

Republican lawmakers introduced their joint resolution in late March, using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

If the student loan forgiveness program is allowed to move forward, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.

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.

While the debt relief would help borrowers with student loans now, the program wouldn’t change the cost of college in the future – and some critics argue that it could even lead to an increase in tuition.

In February, the Supreme Court heard two legal challenges to Biden’s student loan forgiveness program. One was filed by six Republican-led states, and the other was brought by two student loan borrowers who did not qualify for the full benefits of the program. The individuals are backed by the Job Creators Network Foundation, a conservative organization.

The lawsuits argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief.

No debt has been canceled yet. But if the Supreme Court allows the program to take effect, it’s possible the government moves quickly to forgive those debts.

If the justices strike 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 Supreme Court is expected to issue its ruling in late June or early July.

Biden has extended the pause on federal student loan payments several times. Accounts have been frozen and most federal borrowers have not been required to make a payment for more than three years.

But the pause is set to end later this year. The Biden administration has tied the restart date to the litigation over the separate student loan forgiveness program. Payments are set to resume 60 days after the Supreme Court issues its ruling or 60 days after June 30, whichever comes first.

But the Biden administration has also made some lesser-known but potentially longer-lasting changes to the federal student loan system.

New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers. And a new income-driven repayment plan proposal is meant to lower eligible borrowers’ monthly payments and reduce the amount they pay back over time. Parts of that new repayment plan are expected to go into effect later this year.

The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.

Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.

This headline and story have been updated with additional information.

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April 12, 2021