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The Education Department released a proposal for including borrowers with hardship in debt relief. AdvertisementPresident Joe Biden's Education Department unveiled another group of student-loan borrowers it's considering for its second try at debt relief. On Thursday, the Education Department released its proposed text that focused on debt cancellation for borrowers facing financial hardship. Advertisement"College is meant to lead to a better life, but too many students end up struggling due to their student debt," Under Secretary of Education James Kvaal said in a statement. The Education Department emphasized in its press release that it "may consider these and other factors to determine whether borrowers are experiencing the type of hardship that would qualify for debt relief."
Persons: , Joe Biden's, Biden's, Education James Kvaal, Kvaal, Harris, Pell Grant Organizations: Education Department, Service, Joe Biden's Education Department, Higher, Democratic, Education, Biden, Federal
Row of townhouses in Alexandria, Virginia Grace Cary | Moment | Getty ImagesA new, more affordable repayment plan for federal student loan borrowers may come with another advantage: It could make it easier to become a homeowner. Half of student loan borrowers — including 60% of millennial borrowers — who haven't yet purchased a home say their education debt is delaying them from doing so, according to a 2021 report by the National Association of Realtors. Previously, someone who made $40,000 a year would have a monthly student loan payment of around $151. watch nowIn the past, most mortgage lenders assumed that a borrower's monthly student loan payment was a certain percentage of their loan balance, even if the actual payment was lower, Kantrowitz said. There's one catch: Many mortgage lenders won't use a $0 monthly student loan payment in their underwriting process, which the SAVE plan could leave many borrowers with.
Persons: Alexandria , Virginia Grace Cary, Biden, Mark Kantrowitz, Christelle Bamona, Barmona, Kantrowitz, Bamona Organizations: Valuable Education, National Association of Realtors, Here's, Center for, SAVE, Finance, Lending Locations: Alexandria , Virginia
Low-income mortgage borrowers could get a $2,500 homebuyer credit through Fannie Mae or Freddie Mac. Major mortgage investors Fannie Mae and Freddie Mac are temporarily offering a $2,500 credit to very low-income homebuyers to help offset their down payment and closing costs. The Fannie Mae credit is available through the company's HomeReady program, while people can get the Freddie Mac credit through its Home Possible program. Both Fannie Mae and Freddie Mac have tools that let you see the area median income in a given location. How the $2,500 credit worksIf you qualify for this credit, you'll get the $2,500 through your lender, which Fannie Mae or Freddie Mac later reimburses the lender when your loan is sold.
Persons: Fannie Mae, Freddie Mac, , Freddie, Fannie Mae's, Freddie Mac's, it's, you'll, Fannie, Eileen Tu, Cyndi Danko, You'll Organizations: Service, Rocket Mortgage, National Council of State, Agencies
Student-loan borrowers have encountered a range of repayment issues, and any mistakes in their accounts will be fixed — but it'll take some time. The Education Department posted guidance for borrowers on what to expect if they found mistakes in their accounts. "It might take several weeks for your loan servicer to send this communication and to make corrections to your account," the guidance said. "You might receive an updated billing statement before you receive the above communication about corrections. According to a notice reviewed by BI in November, student-loan company MOHELA told some borrowers that it was "in the process of updating your account.
Persons: servicers, MOHELA Organizations: The Education Department, Public, BI, Federal, Department
Pixdeluxe | E+ | Getty ImagesThe Biden administration announced last week that it would fast-track its plan to deliver student loan forgiveness for certain borrowers in its new repayment plan. "A borrower who is already enrolled in the SAVE plan should see this forgiveness automatically," Rubin said. Generally, only Direct loans qualify for the SAVE plan, including Direct subsidized, Direct unsubsidized and Direct PLUS loans. Once your debt is rolled into a Direct Consolidation Loan, you should be able to access the SAVE plan. "If a borrower currently has a loan in default, the defaulted loan is not eligible to be repaid under a SAVE plan," Rubin said.
Persons: Biden, Elaine Rubin, Rubin, Mark Kantrowitz, Kantrowitz Organizations: U.S . Department of, Valuable Education, U.S . Department of Education, SAVE, Direct, Finance Locations: Edvisors
Let 'em ride: Several of 2023's best-performing stocks were grossly undervalued at the beginning of the year. So while investors recognized the company could deliver massive earnings and free cash flow, they were afraid Zuckerberg had gone off the reservation. The stock sports topline growth, substantial margins, a strong balance sheet, substantial free cash flow, and a moat around its business. It's time to hedge some of those gains (or take profits): The second best-performing stock in the Russell 1000 for 2023 is Coinbase (COIN) . If you own, but don't want to sell, consider purchasing the March $45/$35 put spread as a particle hedge, as illustrated below.
Persons: David Ricardo, Ricardo, Mark Zuckerberg, Zuckerberg, doesn't, Russell, cryptocurrencies, aren't, Equifax Organizations: Russell, Vertiv, Builders, Topbuild Corp, Nvidia, Investors, MU, Walmart, Visa, Mastercard, Paypal, Experian, PayPal, Palantir Technologies, Government Locations: uptrends
Four Democrats recently wrote a letter that raised concerns about student-loan repayment challenges. They said they're worried servicer errors could hurt borrowers' credit scores. AdvertisementIt's been just over two months since federal student-loan payments resumed and millions of borrowers have already faced a range of difficulties with the transition. Elizabeth Warren, Bernie Sanders, Richard Blumenthal, and Chris Van Hollen sent a letter to Education Secretary Miguel Cardona expressing concerns about challenges student-loan borrowers have faced over the past few months. "For example, we are concerned that ED's credit reporting processes may expose borrowers' credit scores to unanticipated consequences," the letter said.
Persons: they're, , It's, Elizabeth Warren, Bernie Sanders, Richard Blumenthal, Chris Van Hollen, Secretary Miguel Cardona, it's Organizations: Education Department, Service, Democratic, Secretary, Department, Democrats, Federal Student Aid, House Republicans Locations: Sens
Millennials hold the most student debt, with an average balance of about $35,000 per person. Most student-loan borrowers want Biden to deliver broad debt relief. Take Helena, a 58-year-old borrower with $145,000 in student debt who previously had to sell items on eBay to afford her payments. That amount varies by generation: the average Gen Z borrower holds $24,472 in student debt, the average millennial holds $42,637 in student debt, and the average Gen Xer holds $48,733 in student debt, according to TransUnion. A Morning Consult and Politico poll in June 2022, right before Biden's first debt relief plan was announced, found that of 2,000 registered voters, 65% of respondents aged 18 to 34 supported $10,000 in debt relief, with 61% of respondents aged 35 to 44 feeling the same.
Persons: Millennials, Biden, , Helena, Joe Biden's, Theresa Teders, that's, it's, Xer, Zers, millennials, Gen Xers —, Biden's Organizations: Service, eBay, Education Department, Higher, American Association of University Women, Federal Student Aid, Politico
Richard Levine | Corbis News | Getty ImagesFor decades, it was nearly impossible for student loan borrowers to walk away from their debt in bankruptcy court. Congress has set a high bar for discharging student loan debt in bankruptcy. Under the new process, student loan borrowers complete a form to assist the government in evaluating their discharge request. "It makes it easier for student loan borrowers to qualify for bankruptcy discharge by clearly setting out the policy," said higher education expert Mark Kantrowitz. Federal student loan borrowers have several ways to reduce their debt burden, including payment plans with $0 monthly payments and economic hardship and unemployment deferments.
Persons: Richard Levine, That's, Biden, , Mark Kantrowitz, Kantrowitz Organizations: United State Bankruptcy Court Southern District of NY, Corbis, U.S . Department of Justice, U.S . Department of Education, American Bar Association, Consumer, Federal
Last month, bond yields made a comeback and the 10-year Treasury note hit roughly 5%, the highest since 2007. On the other end, bond risk comes from the borrower's ability to pay back their obligation. For investors who want higher income, Bory recommends considering a mutual fund or a commingled fund that provides that diversification. Popular examples of corporate bond funds include the MainStay MacKay High Yield Corporate Bond Fund (MHCAX), Goldman Sachs High Yield Fund (GSHIX), and High Yield Spectrum Fund (PHSIX). Below is a list of Morningstar analysts' favorite high-yield bond funds that have the highest "Gold Medalist" rating.
Persons: George Bory, Bory, MacKay, Goldman Sachs, Allspring, It's, Acct, Rowe Price Organizations: Business, Allspring, Investments, Fed, AAA, BBB, Bond Fund, Fund, Morningstar, PIA Locations: Allspring, US
Sustainability-linked loans (SLL), which were first used in 2017, offer slightly cheaper borrowing, typically around 2.5-10 basis points less, if companies meet goals such as cutting their carbon emissions or improving board diversity. These let banks strip the sustainability-linked label from the loans if targets are no longer deemed appropriate. The banks' tougher standards are discouraging some borrowers from using SLLs entirely, bankers and lawyers told Reuters. The Engie spokesman said the utility would not agree to linking an event of default to sustainability targets. "We have stated our willingness to walk away when sustainability targets were too soft," said Brittany Agostino, vice president in the environmental, social and governance group at Los Angeles-based Ares.
Persons: Toby Melville, Banks, Constance Chalchat, Pascale Forde Maurice, Elliot Beard, Simmons, Beard, I've, David Milligan, Norton Rose Fulbright, Gemma Lawrence, Pardew, Brittany Agostino, Fredrik Altmann, Tommy Reggiori Wilkes, Isla Binnie, Shankar Ramakrishnan, Simon Jessop, Alexander Smith Organizations: FCA, Financial, Authority, REUTERS, LONDON, BNP, Corporate, Institutional Banking, Reuters, JPMorgan, Ford Motors, SLLs, CIB's, European, Sustainable Investment Banking, Simmons, Norton Rose, Market Association, BMW, Porsche, Thomson Locations: London, Britain, North America, Asia, Los Angeles, New York
Some student-loan borrowers are logging into their accounts and seeing it in forbearance. AdvertisementAdvertisementIf you recently logged into your student-loan account and were surprised to see it placed in forbearance, you're not alone. Over the past few days, student-loan borrowers primarily serviced by MOHELA have logged into their accounts to see their loans were no longer in active repayment. Still, the borrower's account continues to show a payment due with interest accruing, according to documents reviewed by Insider. AdvertisementAdvertisementWas your student-loan account placed on administrative forbearance without any notice?
Persons: servicer, , MOHELA, servicers, forbearance, Scott Buchanan, Elizabeth Warren, Ed Markey, Chris Van Hollen, Richard Blumenthal, Scott Giles Organizations: Department, Service, Public, Student Loan, Locations: forbearance, MOHELA, Sens
And Jess expected to pay around $137 a month in October, but she was billed a $49,000 monthly payment. AdvertisementAdvertisementIncorrect monthly billsWhen servicers attempted to convert borrowers to the new SAVE income-driven repayment plan, 78,000 borrowers got inaccurate bills. Additionally, 21,000 borrowers received monthly statements with "very high and potentially incorrect amounts due," per the memo. Hundreds of borrowers received bills stating they owed over $10,000 a month, with a few borrowers having monthly bills of over $100,000. According to the memo, borrowers are spending an average of 58 minutes on hold with their servicer, call lengths are about 70% longer than 2019 because borrowers have more questions.
Persons: , Alicia, Xiong Chang, Jess, Joe Biden's, servicers, It's, MOHELA, forbearance Servicers Organizations: Federal, Aid, Service, Joe Biden's Education Department, Public, Department, Education Department, Federal Student Aid Locations: forbearance
The Education Department released its draft text for its new student-debt relief plan. AdvertisementAdvertisementOver the past few years, Insider has heard from a range of borrowers who have struggled to get ahead of their student debt. Now, President Joe Biden's Education Department is moving forward with its new plan for student-loan forgiveness — and it wants feedback on which situations would meet a "hardship' standard for relief. The department said it did not include that group of borrowers in its initial draft text for debt relief because it needs to further define what hardship means. Do you think your student debt experiences should qualify as hardship?
Persons: , Joe Biden's, Pell, Tamy Abernathy Organizations: Education Department, Service, Joe Biden's Education Department, Higher
Morgan Lindsay didn't mind that student loan bills were resuming in the fall. She'd applied for a new repayment plan over the summer, and her calculated monthly bill came to $0. But then, on Sept. 11, she found that her servicer, Mohela, or the Missouri Higher Education Loan Authority, had taken $2,074 from her bank account. More from Personal Finance:Will Social Security be there for me when I retire? Medicare open enrollment may cut retiree's health-care costsHow much your Social Security check may be in 2024But under the income-driven repayment plan she'd signed up for, she didn't owe anything.
Persons: Morgan Lindsay, She'd, Lindsay, she'd, Mohela Organizations: Missouri Higher Education Loan Authority, Finance, Will Locations: Missouri
AdvertisementAdvertisementAlicia, 48, is just a few months away from qualifying for student-debt relief through the Public Service Loan Forgiveness program. She said she anticipated that once the student-loan payment pause ended, she would be facing the same monthly payment. After over three years, the pandemic student-loan payment pause is officially over — interest started to accrue again in September, and bills are now starting to become due. So we can't wait months and months and months." Are you having challenges with student-loan repayment?
Persons: servicers haven't, , Alicia, Alicia —, I've, servicers, it's, it'll, they're, We're, Xiong Chang, Xiong, I'm, servicer, he's, Miguel Cardona Organizations: Service, Public, Education Department, Customer Service Locations: PSLF
The CFPB's funding design draws money each year from the Federal Reserve instead of from budgets passed by lawmakers. Challengers to the CFPB - trade groups representing the high-interest payday loan industry - argued that the agency's funding structure violates a constitutional provision giving Congress the power of the purse. The Supreme Court's 6-3 conservative majority has rolled back the power of federal agencies including the Environmental Protection Agency in important rulings in recent years. The court's three liberal justices pressed the challengers on the repercussions of deeming the CFPB's funding structure unconstitutional. Circuit Court of Appeals, which last October ruled that the CFPB's funding structure violated the Appropriations Clause.
Persons: Clarence Thomas, Samuel Alito, Kevin Wurm, Joe Biden's, Elizabeth Prelogar, Biden, Elena Kagan, Barack Obama, Wells, John Kruzel, Will Dunham Organizations: U.S, Supreme, REUTERS, Companies Wells, Co, Consumer Financial Protection Bureau, Federal, Environmental Protection Agency, Conservative, Federal Reserve, Democratic, New, Circuit, Appeals, Republican, Thomson Locations: Washington , U.S, WASHINGTON, New Orleans
AdvertisementAdvertisementPandemic relief for student-loan borrowers is officially over. While pandemic relief is over, the Education Department has put forth a series of plans to help borrowers afford their monthly payments — including temporary safeguards should they miss a payment. On-ramp periodIf a borrower finds they cannot afford their monthly payments, they can make use of the 12-month "on-ramp" period beginning in October. AdvertisementAdvertisementOther forms of relief to comeAside from repayment, the Education Department is working through other regulations, including targeted relief, for student-loan borrowers. It could also run into legal challenges, and not everyone who qualified for Biden's first debt relief plan is guaranteed to qualify now.
Persons: , Donald Trump, Joe Biden, Biden Organizations: Service, Education Department, Federal, Higher Locations: COVID
Our experts answer readers' student loan questions and write unbiased product reviews (here's how we assess student loans). After a three-year pause on payments due to the pandemic, student loan payments are scheduled to resume October 1 . For many, adding student loan payments to a long list of expenses might be a struggle. Understand how student loans will fit into your financesDon't just guess whether you can afford the expense — student loan payments will require you to redo your budget. What to do about private student loansIf you owe private student loans , this might be a bit trickier.
Organizations: Consumer Financial, Social, SAVE, Federal
Federal student-loan payments are starting up again beginning next week. AdvertisementAdvertisementMillions of student-loan borrowers are about to face another monthly bill — and they might not be able to afford it. On October 1, borrowers will begin receiving bills for their federal student-loan payments. Here's what borrowers should be aware of, along with the potential consequences of missing a payment starting next month. AdvertisementAdvertisementOn-ramp periodThe Education Department announced some temporary relief for borrowers if they find they cannot afford payments next month.
Persons: , Joe Biden, Biden, servicer Organizations: Service, Education Department, Education, Perkins, Social, Higher Locations: COVID
To date, he has amassed 28 single- and multi-family homes that were worth over $28 million at their time of purchase. This is when the seller provides the loan, allowing the buyer to skip the bank and instead give the monthly payment with interest to the seller. In this instance, the lender will provide the down payment in exchange for either equity in the deal or monthly payments over time. If he has an $8,000 return, he must deduct $5,000 on mortgage payments. He determines this by dividing the total monthly operating costs, including utilities, maintenance, property taxes, home insurance, and property management fees (not including mortgage payments) by the total monthly income.
Persons: Chris Gerbig, Tori Gerbig, Pink Lily, Chris, Chris didn't, he's, you'll, they've Organizations: eBay, Bank of America, Housing Administration, National Association of Realtors, Loan Locations: Wells Fargo, Kentucky
LONDON, Sept 14 (Reuters) - Global securities regulators have proposed tightening how the leveraged loan market operates to tackle "vulnerabilities" after a prolonged period of low interest rates led to deteriorating standards. Leveraged loans are loans extended to companies that already have high debt, and therefore are at a higher risk of default. Global securities watchdog IOSCO said it had identified "some vulnerabilities in the leveraged loan and collateralized loan obligation markets which may be exacerbated by the behavior of certain participants and market practices." Covenant-lite loans now make up 90% of the leveraged loan market, up from just 1% in 2000, IOSCO said in a public consultation paper on its proposed new guidance. U.S. companies have raised more money in private markets than in public markets in each year since 2009, it added.
Persons: IOSCO, Huw Jones, Mark Potter Organizations: Global, Investors, Thomson
But the watchdog's future may be in peril thanks to a case now before the U.S. Supreme Court. Pro-business conservatives and their Republican allies believe the court fight has brought them closer than ever to dismantling the CFPB. Congress, then controlled by Democrats, authorized the agency to supervise certain financial institutions' compliance with federal consumer laws, backed by the threat of lawsuits and fines. Circuit Court of Appeals last October ruled that the agency's funding structure violated the Constitution. Biden's administration told the Supreme Court that the CFPB's funding structure approved by Congress - with a fixed amount going to the agency annually - was effectively "a standing, capped lump-sum appropriation."
Persons: Clarence Thomas, Samuel Alito, Kevin Wurm, Wells, Joe Biden's, Ellen Harnick, Barack Obama, Mick Mulvaney, Donald Trump, Mulvaney, John Kruzel, Douglas Gillison, Will Dunham, Scott Malone Organizations: U.S, Supreme, REUTERS, Rights, Consumer Financial, Bureau, Fifth Third Bank, U.S . Federal, Congress, Center for Responsible, Republican, Democrats, Republicans, Republican U.S, Community Financial Services Association of America, Consumer Service Alliance of Texas, Circuit, Trump, Federal Deposit Insurance Corporation, Office, Federal Reserve, Thomson Locations: Washington , U.S, New Orleans
Legal experts say that if California wins, it could embolden other states to take action against lenders that make high-interest loans to low-income borrowers using what critics call "rent a bank" partnerships. Several nonbank lenders have already exited California, said Saunders, whose group tracks high-interest lenders. In California, OppFi took the unusual step of preemptively suing to try to block the state from taking action. Federal law allows state-chartered banks to lend across state lines at the interest rate legal in their home state. California has urged Dillon to recognize that OppFi decides who to lend to and has a deal with the bank to purchase the loans.
Persons: Lee Jae, Timothy Dillon, Lauren Saunders, California's, OppFi, Saunders, Dillon, Allard Chu, That's, Ron Vaske, Ballard Spahr, Jody Godoy, Andy Sullivan Organizations: REUTERS, California Department of Financial Protection, Los Angeles Superior, California, Federal Reserve, National Consumer Law Center, EasyPay Finance, FinWise Bank, FinWise, Thomson Locations: Seoul, California, Chicago, Utah, U.S, In California, Colorado, New York
China's property troubles may slow the economy down, Nicholas Lardy, a China economy expert, told CNN. However, the issues will not create a financial crisis, he added. Even so, one Chinese economy expert thinks the crisis is unlikely to spill over into the broader economy. Advertisement Advertisement Watch: Ken Rogoff on the next financial crisis and the future of bitcoinChina's property sector has been gripped in a crisis since 2021 when property giant Evergrande ran into a liquidity crisis. The market was so hot that Chinese developers were taking on massive borrowings to build apartments ahead of demand.
Persons: Nicholas Lardy, it's, Ken Rogoff, Evergrande, Lardy, Lina Batarags Organizations: CNN, Service, Peterson Institute for International Economics Locations: China, Wall, Silicon
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