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Student loan debt has ballooned to over $1.6 trillion for more than 45 million borrowers. In order to help working and middle-class American borrowers the Biden administration in August announced a three-part plan to forgive a portion of student loans for borrowers. It points to the fact that the Heroes Act of 2003 grants the U.S. secretary of education the authority to waive regulations related to student loans during national emergencies. Federal student loan payments won't resume until the end of August, unless the litigation over the Biden administration's student loan forgiveness plan is resolved sooner. Watch the video above to find out more about what's at stake in the student loan forgiveness battle.
That would include worse customer service times for Americans receiving Medicare and Social Security. That could mean people waiting for disability benefits through Social Security might face wait times of at least two months longer, and those seeking help through Social Security and Medicare offices could experience worse customer servicer. "House Republicans can do this math as well as anyone. "If House Republicans choose not to cut funding for military, veterans' medical care, and border security, then their cuts to everything else must get even deeper." As Yellen warned McCarthy in her Monday letter, failure to raise the debt ceiling on time would be catastrophic for Americans.
Her mother Sarah — a former deli shop owner — was bored with retirement and had decided to open an ice cream shop in Bethesda, Maryland. "To be honest, at first I was like, 'ice cream shop?'" Running the ice cream shopDespite Sarah's Handmade Ice Cream successful grand opening, it took over six months for the business to become "a well-oiled machine," Park says. Instead, Park and her mother donate ice cream to local nonprofits and community organizations, which has attracted loyal customers in the Bethesda area. Within a few months of opening the first store, Park realized the business didn't have to be limited to just "a mom-and-daughter shop."
With broad student-debt relief, many student-loan borrowers anticipate reforms to payment programs. Congress didn't increase funding for Federal Student Aid last year, and the impacts already show. Federal student-loan borrowers are facing a consequential year ahead. Alex Wong/Getty Images'We really need to be worried and concerned'The issue of a lack of funding, and how it impacts student-loan borrowers, has been on some Democratic lawmakers' radars. "That's why I'll continue to fight for the increased funding the Student Aid Administration needs to provide quality services and support at-risk borrowers," she said.
Budget Cuts in the G.O.P. If every agency is cut If defense, veterans’ health and border security are spared Defense Defense –18% 0% No change Veterans' medical Veterans' medical –18% 0% No change Health and Human Services Health and Human Services –18% –51% Education Education –18% –51% Housing and Urban Development Housing and Urban Development –18% –51% Homeland Security Homeland Security –18% 0% No change Justice Justice –18% –51% State State –18% –51% Transportation Transportation –18% –51% Agriculture Agriculture –18% –51% International aid International aid –18% –51% NASA NASA –18% –51% Veterans (other) Veterans (other) –18% –51% Energy Energy –18% –51% Interior Interior –18% –51% Treasury Treasury –18% –51% Labor Labor –18% –51% Social Security Administration Social Security Administration –18% –51% Commerce Commerce –18% –51% Environmental Protection Agency Environmental Protection Agency –18% –51% Corps of Engineers Corps of Engineers –18% –51% Other Other –18% –51% Source: Analysis of Congressional Budget Office data by Bobby Kogan, Center for American Progress Note: Figure shows base discretionary budget authority totals for 2024-2033. The New York TimesThe charts above show how exempting big categories of spending would make the budget caps more draconian. The budget caps aren’t the only changes in the current House bill that would reduce federal spending. tax enforcement Budget cuts would reduce tax collections, reducing the savings in the rest of the bill –$120 billion Sources: Committee for a Responsible Federal Budget ; Congressional Budget Office Note: TANF refers to the Temporary Assistance for Needy Families program.
Steve Prezant | The Image Bank | Getty Imageswatch nowHere are four strategies high school seniors, and their families, can consider to avoid ending up deep in debt. "To reduce student loan debt, enroll at a less expensive college," Kantrowitz said, adding that public colleges often "provide just as good a quality of education." Families can continue saving in a 529 plan while their child is enrolled in college, Kantrowitz said. Meanwhile, more than $6 billion in scholarships are awarded to college students each year, according to Kantrowitz. According to calculations by Kantrowitz, around 1 in 8 college students has won a scholarship.
If you've ever filled out the Free Application for Student Aid (FAFSA) before, you're probably familiar with the stress, confusion and possible tears that often come with it. The number gave your school and federal aid administrators an idea of how much financial support to offer. The student aid index (SAI) will serve the same purpose, but use a different formula. Federal Student Aid (FSA) published a draft of the calculations to be used to determine SAI. Aid administrators will subtract the student's SAI from their determined cost of attendance in order to assess aid eligibility and amounts, according to FSA.
Americans are accruing billions in debt to pay for things like education and healthcare. But that would require shifting the idea of childcare, education, and healthcare and thinking of them as public goods — not businesses. That ultimately meant millions in funding for public childcare. "If the US health system was a country, it would be about the fourth-largest country in the world," Cooper said. There's much less government involvement in the US healthcare system than in other countries, Cooper said.
Roxanne Dougherty, 31, is waiting for a $5,000 refund on her student-loan payments. The Education Department directed Insider to guidance on refunds posted on Federal Student Aid's website. "No one is taking the time to help me or to listen to me when it comes to MOHELA," Dougherty said. "It just seems like there's something in it for them to not help," Dougherty said. Are you still waiting for a refund on your student-loan payments?
It included increased funding for the Federal Student Aid office to help the return to repayment this year. It comes after SoFi filed a lawsuit to end the payment pause and throw borrowers back into repayment. This budget release also comes in a time of significant uncertainty for student-loan borrowers. "This additional funding is needed to provide better support to student loan borrowers, especially as they return to repayment," the budget said. "The Department will continue to fight to deliver relief to borrowers, provide a smooth path to repayment, and protect borrowers from industry and special interests."
The move also marked the beginning of a new way to manage endowment funds. The arrangement has been a boon for the hedge-fund managers who received university endowment cash, but the benefits for the schools are trickier to parse. As Eaton put it in his book, universities directed funds to "wherever those allocations would generate the largest further investment returns." Eaton estimated in 2017 that tax breaks for university endowments cost federal coffers up to $19 billion a year. As the influence of billionaires and hedge-fund managers has grown, universities have moved further away from their ultimate goal: educating people.
That is, if tax increases, defense spending, Social Security, and Medicare remain off the table. "The thing is the government has basically three gigantic programs and it's the US military, Social Security, and Medicare," Goldwein said. "The idea we're just going to eliminate all parts of government other than Social Security, Medicare, and defense — it's just not realistic, or desirable," Goldwein said. Meanwhile, Democrats await Republicans' plan to move ahead with a deal to raise the debt ceiling before the US defaults. The hard right demands spending cuts," Senate Majority Leader Chuck Schumer wrote on Twitter.
The PSLF program cancels federal student loans for people who work in public-service jobs for 10 years, and the impact of relief is profound. In the process, borrowers forfeit many protections that come with federal student loans, including the chance to get their loans canceled. In one survey, more than one-third of respondents who refinanced their federal student loans said they eventually came to regret it. President Biden announced a plan to cancel $10,000 in student loan debt, but if you privately refinanced, you won't benefit. Most private student loans allow for some kind of "cosigner release" so no one else is on the hook for your loans.
GOP lawmakers have refused a clean increase, but have yet to produce details on what they want in a deal. The US could breach the debt ceiling as soon as July, the CBO estimated. That's because no one seems to be ready or willing to negotiate over how to raise the debt ceiling. The debt ceiling dictates how much money the government can borrow to pay off the expenses it's already approved. For now, Biden's administration has maintained that raising the debt ceiling should be done in a bipartisan way, and without negotiations.
Trumzz | Istock | Getty ImagesOver the past two years, millions of low-income U.S. households have received broadband internet at a discount through two consecutive government programs. "Millions could be left in the dark without broadband service for the very same reasons they didn't have it in the first place." The Emergency Broadband Benefit, or EBB, which was approved by then-President Donald Trump in late 2020 and launched in February 2021, provided a $50 subsidy. That's considered an accomplishment, said Ken Garnett, chief strategy officer at Cal.net, a small internet service provider that serves rural inland areas of California. As of January, about $6.1 billion of the funds had been claimed by broadband service providers as reimbursement for discounting their services and products.
Miguel Cardona pushed back on opponents who say Biden's debt relief is unfair to those with private loans. He said the department "can't control other loans," responding to those with private debt. The Supreme Court heard oral arguments to the federal relief plan on Tuesday. He was asked what he would say to those who do not qualify for the federal relief, like borrowers with private loans. Shortly after Biden's debt relief was announced, the Education Department changed the eligibility requirements due to the rising legal challenges.
Questions posed by the conservative justices during arguments on Tuesday over Biden's debt relief indicated that the conservative-majority court could strike down the plan as an unlawful overreach of executive power. "If Congress can't or won't step up, and the court won't let presidents do so, what are we left with? Its conservative justices already have invoked it to scuttle a pandemic-era residential eviction moratorium, a COVID-19 vaccination-or-testing mandate for large businesses and federal limits on carbon emissions from power plants. In some instances, like Biden's unilateral effort to extend the eviction moratorium, he took executive action following congressional inaction. "I'm concerned that we're going to have a problem in terms of the federal government's ability to operate," Jackson said.
The Supreme Court will hear oral arguments on Tuesday on Biden's student-loan relief plan. Supporters say the relief is lawful, while opponents say Biden's policy is unconstitutional. The states claim that MOHELA will lose revenue from servicing loans because of Biden's relief. Concerning the constitutionality of Biden's plan, advocates on both sides say they feel confident their respective views will prevail at the Supreme Court. The Supreme Court is expected to hand down its decisions by June.
The Supreme Court heard oral arguments for Biden's student-debt relief on Tuesday. The nation's highest court heard more than four hours of oral arguments in two high-profile cases that reviewed Biden's plan to cancel up to $20,000 in debt for federal borrowers, which lower courts temporarily paused in November. "We're talking about half a trillion dollars and 43 million Americans," Chief Justice John Roberts said, referring to the estimated costs of Biden's plan and the number of affected borrowers. Justice Elena Kagan raised a hypothetical national emergency of an earthquake and the education secretary responded by deciding to cancel student loans for those harmed. Still, even if Barrett and the court's three liberals find that the states and borrowers lack standing, they would need another conservative vote to uphold Biden's debt relief.
The PSLF program cancels federal student loans for people who work in public-service jobs for 10 years, and the impact of relief is profound. In the process, borrowers forfeit many protections that come with federal student loans, including the chance to get their loans canceled. Recent changes to the law require private student loans to be discharged if you die, but that isn't the case with older loans. Most private student loans allow for some kind of "cosigner release" so no one else is on the hook for your loans. Refinancing companies make the system worse for everyonePrivate refinancing companies don't just hand out their loans to anyone.
[1/2] U.S. President Joe Biden delivers remarks about the student loan forgiveness program from an auditorium on the White House campus in Washington, U.S., October 17, 2022. The program fulfilled Biden's 2020 campaign promise to cancel a portion of the nation's $1.6 trillion in federal student loan debt but was criticized by Republicans and others as an overreach of his authority. Biden's administration has said the plan is authorized under a 2003 federal law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, that allows student loan debt relief during wartime or national emergencies. Beginning in 2020, the administrations of President Donald Trump, a Republican, and Biden, a Democrat, repeatedly paused federal student loan payments and halted interest from accruing, relying upon the HEROES Act. Missouri-based U.S. District Judge Henry Autrey found the states - Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina lacked the legal standing to sue.
Activists and students protest in front of the Supreme Court during a rally for student debt cancellation in Washington, DC, on February 28, 2023. The Supreme Court hears oral arguments this week against and for President Joe Biden's student debt forgiveness plan. The Biden administration has appealed both rulings, maintaining the president is within his authority to cancel federal student debt. Who will benefit the most from student debt forgiveness? What happens if the Supreme Court stops debt forgiveness?
Challengers to President Biden’s student-debt cancellation plan want the high court to decide whether the administration overstepped its authority. Challengers to President Biden’s mass student-debt cancellation plan must clear a hurdle before the Supreme Court can move on to the merits of the case: Showing that they would suffer harm from the program. The high court will hear arguments on Tuesday related to Mr. Biden’s plan to cancel up to $10,000 in debt for borrowers making less than $125,000 annually, with extra relief going to people who received Pell Grants. Individuals and Republican state officials sued the administration last year seeking to block the plan from going into effect.
The Job Creators Network, one of the groups challenging Biden's student-debt relief in the Supreme Court, said it feels "very good" about its case. On Tuesday, the Supreme Court will hear arguments for two lawsuits that blocked the relief. Biden's administration and Democrats have pushed back on the plaintiffs' standing to sue. On Tuesday, the Supreme Court is taking on two lawsuits that paused Biden's plan to cancel up to $20,000 in student debt for federal borrowers. Both of the lawsuits challenging Biden's plan said the broad debt relief is an overreach of that authority and should not be done without Congressional approval.
The Supreme Court will hear two challenges to Biden's student-debt-relief plan on Tuesday. But the Biden administration has defended its legal authority and expressed confidence that the Supreme Court will uphold the plan. Prominent figures in the legal and political worlds have weighed in on the two high-profile Supreme Court cases in dozens of briefs filed to the Supreme Court. More than 170 Republican members of Congress have argued against Biden's relief, along with 17 Republican-led states, the US Chamber of Commerce, and over a dozen conservative-leaning advocacy groups. Millions of student-loan borrowers' financial futures hang in the balance.
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