President Joe Biden confirmed Wednesday what many have anticipated for months – a plan to forgive or reduce student loan debt for millions of debt-saddled borrowers.
If you earn less than $125,000 annually, he said, you’re eligible to receive cancellation of up to $10,000 in federal student loans. If you received a Pell Grant, you can get up to $20,000 forgiven.
If you’re not eligible for any student debt forgiveness, your pause on repayments continues to be paused until year end. The Department of Education is also working on a proposal introducing a new repayment plan to ease the burden on borrowers.
Since the start of the pandemic in 2020, borrowers haven’t had to pay a cent on their federal student loans. During this time, the pressure grew for the president to cancel the debt. It was one of the platforms Biden ran on for president in 2020.
Though the plan was welcomed by many, it still garnered criticism. Many had sought higher forgiveness amounts – $50,000 or even all amounts, no matter how large. The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.
You can’t just yet. The application will be available no later than Dec. 31, when the pause on federal student loan repayments terminates.
Nearly 8 million borrowers may be automatically eligible to receive relief because relevant income data is already available to the Department of Education.
What’s Biden’s student loan forgiveness plan?
Individuals with an annual income of less than $125,000 (or under $250,000 for married couples or heads of households) are entitled to have up to $10,000 in federal student loans canceled. No private loans will be forgiven.
Those who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation.
For those who still have student debt, the repayment pause since March 2020 will be extended to the end of the year. Borrowers will resume payments in January.
What is a Pell Grant?
Federal funding that’s usually awarded only to students who display exceptional financial need and have not earned a bachelor’s, graduate or professional degree. Sometimes, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.
Unlike a loan, a Pell Grant does not have to be repaid, except under certain circumstances. Those include a change in enrollment status or if you received outside scholarships or grants that reduced your need for federal student aid.
Are current students eligible for loan forgiveness?
Loans awarded to current students and graduates with undergraduate, graduate and Parent PLUS loans are eligible, so long as the loans were awarded by June 30, 2022.
What’s the cost of student loan forgiveness?
A one-time maximum debt forgiveness of $10,000 per borrower will cost the U.S. government around $300 billion for borrowers with incomes less than $125,000, according to analysis published on Tuesday by Junlei Chen and Kent Smetters at the Penn Wharton Budget Model, based at the University of Pennsylvania. This cost increases to $330 billion if the program continues over the standard 10-year budget window.
Before the announcement, the Government Accountability Office estimated that alone, the payment pause since the start of the pandemic cost the government $102 billion. That amount included suspending all payments due, interest accrual and involuntary collections for loans in default from March 13, 2020, to Aug. 31, 2022.
Who benefits most from the student debt forgiveness plan?
Mostly higher-income households. Between 69% and 73% of the debt forgiven accrues to households in the top 60% of the income distribution, Chen and Smetters said.
A New York Federal Reserve study in April, though, said that the income cap to the forgiveness “substantially reduces the cost of student loan forgiveness and increases the share of benefit going to borrowers who are more likely to struggle repaying their debts.”
For example, an income cap of $75,000 for a $10,000 cancellation raises the share of forgiven loan dollars going to borrowers in low-income neighborhoods to 35% from 25% and the share going to lower credit score borrowers to 42% from 37%, it said. Income caps also increase the share of loans forgiven that were delinquent before the pandemic to 60% from 34%.
How many Americans have student loans outstanding?
About 45 million Americans hold federal student loan debt, according to federal data. The loan forgiveness plan should provide relief to about 43 million borrowers and cancel the full remaining balance for nearly 45% of those borrowers.
The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.
Most (67%) student loan borrowers are under 40 years old, but 57% of all balances are owed by those under 40. That means those with larger balances are more likely to be older or to have taken out loans for graduate school, it said.
The White House estimates that its initiative will cancel the full remaining balance for roughly 20 million borrowers.
What’s the average outstanding student loan debt amount?
The average federal student loan debt balance is $37,667 while the total average balance (including private loan debt) may be as high as $40,274, according to Education Data Initiative, which collects data and statistics about the U.S. education system.
Is student loan forgiveness taxable?
The debt relief isn’t counted as taxable income for federal income tax purposes, the White House says.
Would canceling student loan debt increase inflation?
Some prominent economists, including former Treasury Secretary Lawrence Summers and Jason Furman, who was chairman of President Barack Obama’s Council of Economic Advisors, have been vocal critics, saying student debt forgiveness would stoke 40-year high inflation and may be unfair.
“Student loan relief is not free,” Furman tweeted on Aug. 19. “Part of it would be paid for by the 87% of Americans who do not benefit but lose out from inflation. Part of it would be paid for by future spending cuts & tax increases—with uncertainty about who will bear those costs.”
The Committee for a Responsible Federal Budget estimates Biden’s plan “would more than undo the deflationary pressures from the Inflation Reduction Act and add 0.15 percentage points of additional inflation in the near-term,” noted Sarah Foster, Bankrate analyst.
The Federal Reserve has been on an aggressive rate-raising cycle to cool demand, but giving people spending money could stymie that effort.
And those economists aren’t the only ones worried. Hit already by hefty inflation, 59% of Americans are concerned student loan forgiveness will make inflation worse, according to a CNBC survey, conducted online by Momentive among a national sample of 5,142 adults from Aug. 4 to 15.
The money you have left after paying taxes and necessary cost-of-living expenses. It’s different from disposable income, which is simply the amount of money you have left after paying taxes.
Knowing what discretionary income is is important because many federal student loan repayment plans are income-driven and have payments that are based on your discretionary income.
If you qualify for student debt forgiveness, what should you do with any extra money?
“Student loan forgiveness will likely decrease your monthly payment or get rid of it entirely,” said Dan Casey of Bridgeriver Advisors in Bloomfield Hills, Mich.
Take that freed up money to pay off high-interest debt like credit cards, build up your emergency fund, or invest it in your retirement. Even though today looks brighter, the economy is still on shaky footing.
Does Congress need to approve Biden’s loan forgiveness plan?
The White House says it is using the authority Congress granted the Department of Education to forgive the outstanding federal student loans.
Should I stop paying my student loans now?
The Biden administration has extended the Student Loan Payment Pause through Dec. 31, which allows borrowers to suspend their loan payments with a 0% interest rate. The White House has warned that this will be the final extension.
“It’s time for the payments to resume,” Biden said Wednesday.
Borrowers who qualify for the payment pause and loan forgiveness should stop paying off loans if they owe less than the $10,000 cap (or $20,000 cap, for Pell Grant recipients) to take full advantage of the loan forgiveness program.
There is a subset of borrowers who did not have their loans paused, however. These borrowers should continue to make loan payments “to keep the loan in good standing,” according to Ameriprise financial private wealth advisor Rebecca Hall.
Nondefaulted Federal Family Education Loan (FFEL) Program loans not held by the Department of Education
Defaulted and Nondefaulted federal Perkins loans not held by the Department of Education
Nondefaulted Health Education Assistance Loan (HEAL) loans
Private student loans
The Department of Education administration did not immediately respond to a request for comment on whether any of these loans would be eligible for the loan forgiveness program.
I paid off student loans recently. Am I eligible for a refund?
The federal government first announced the student loan payment pause on March 13, 2020. The U.S. Department of Education says borrowers who made payments during the pause – including auto-debit payments – can request a refund with their loan servicer.
Borrowers can look up their loan servicer on the agency’s website.
If you don’t qualify for student loan forgiveness, what should you do to prepare to start repaying in January?
“If you haven’t made a student loan payment since the pause began, it’s important to understand how much you’ll owe each month,” Daniel Milan, advisor at Cornerstone Financial Services, said.
Then, review the interest rates on your loans and start paying off the highest interest ones first, enrolling in autopay so you don’t miss any payments while you get back into the habit of paying regularly and consider refinancing if it lowers your payments.
“Moving multiple loans into one loan can also help you keep better track of how much you actually owe,” he said.
What’s ahead for future borrowers?
To “substantially” reduce future monthly payments for lower- and middle-income borrowers and protect more income from loan payments, the Department of Education is proposing a new income-driven repayment plan.
Here are some things being proposed:
Cutting the amount borrowers have to repay each month and curbing interest so a balance won’t grow so long as borrowers make their required monthly payments.
Loan balance forgiveness after 10 years, instead of 20, under many income-driven repayment plans for borrowers with original loan balances of $12,000 or less. This will allow nearly all community college borrowers to be debt-free within 10 years, the White House said.
Starting next summer, the Department of Education can automatically pull borrower’s income information each year, avoiding the hassle of needing to recertify their income annually and make it easier for borrowers to stay enrolled.
Public servants will also have an easier time claiming credits for time of service to go toward debt relief under the Public Service Loan Forgiveness (PSLF) program. The Department of Education has already made some temporary changes toward that end. To apply for forgiveness or payments to count toward forgiveness under the temporary changes, visit the PSLF Help Tool.
A full list of proposed regulations will be published in the coming days on the Federal Register, and the public is invited to comment on the draft rule for 30 days.
Parent PLUS loans are federal student loans issued directly to parents with dependents in school, meant to supplement school, state and other federal financial aid offered for a dependent undergraduate student enrolled at least half-time.
What’s being done to keep the cost of college from spiraling?
The Department of Education will publish an annual watch list of programs with the worst debt levels in the country, so students registering for the next academic year can steer clear of programs with poor outcomes. It will also request plans from colleges with the most concerning debt outcomes on how they intend to lower debt levels.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
The latest: Grain shipments from Ukraine are gathering pace under the agreement hammered out by Ukraine, Russia, Turkey and the United Nations in July. Russia’s blockade of Ukrainian Black Sea ports had sent food prices soaring and raised fears of more hunger in the Middle East and Africa. At least 18 ships, including loads of wheat, corn and sunflower oil, have departed.
The fight: The conflict on the ground grinds on as Russia uses its advantage in heavy artillery to pummel Ukrainian forces, which have sometimes been able to put up stiff resistance. In the south, Ukrainian hopes rest on liberating the Russia-occupied Kherson region, and ultimately Crimea, seized by Russia in 2014. Fears of a disaster at the Zaporizhzhia Nuclear Power Station remain as both sides accuse each other of shelling it.
The Russian missile strike at a train station in Chaplyne, Ukraine, was the deadliest attack on Ukraine’s railway since April.CreditCredit…Leo Correa/Associated Press
KYIV, Ukraine — As rescue workers sifted through twisted metal wreckage on Thursday, officials said the death toll from Russian strikes in and around a train station in eastern Ukraine had risen to 25, including at least five people who had burned to death inside a train car. It was the deadliest attack on Ukrainian civilians in weeks, and a grisly reminder that the grueling war, now in its seventh month, continued to exact a bloody toll.
The attacks, which came as Ukraine celebrated its Independence Day, highlighted “how we live every day,” President Volodymyr Zelensky of Ukraine told the United Nations Security Council in a remote address on Wednesday. Mr. Zelensky said that 22 people had been killed in the strike on the train station, in Chaplyne, about 74 miles east of the city of Dnipro in Ukrainian-controlled territory, during his address.
“There is no such war crime that the Russian occupiers have not yet committed on the territory of Ukraine,” he told the assembled world leaders.
Several rockets struck Chaplyne on Wednesday, Kyrylo Tymoshenko, an official in Mr. Zelensky’s office, said on Telegram. In the same area, Mr. Tymoshenko said, an 11-year-old died when a missile hit the village and destroyed his house.
Four Russian rockets later struck in and around the train station, Mr. Tymoshenko said, causing five passenger cars to catch fire. It was among the deadliest attacks on the country’s railways since April, when more than 50 people were killed when a rocket slammed into a crowded train platform in the eastern city of Kramatorsk.
Russia’s Defense Ministry said the target of the strike in Chaplyne was a military train delivering equipment to the front lines, although the claim could not be verified. Mr. Tymoshenko said that the rockets hit passenger cars.
While Ukraine braced for intensified Russian bombardment on its Independence Day, by Thursday morning, the ledger of long-range missile strikes looked much the same as it had in recent weeks.
In addition to the strikes on Chaplyne, Ukrainian officials said that Russians had used cluster munitions in the Kharkiv region in northeastern Ukraine, wounding two civilians, and also in the city of Kryvyi Rih in the south, where the damage was still being assessed. Missiles hit near the central Ukrainian town of Poltava, officials said, as well as in the Kyiv region. No casualties were reported in those strikes.
Ukrainian National Railways had no immediate comment. But the railway has played an outsize role during the war, providing a critical lifeline for millions fleeing the fighting. Trains have also helped bring in more than 100,000 tons of humanitarian aid. Strikes on moving train cars have been exceedingly rare, and the circumstances of Wednesday’s strike were not immediately clear.
After a day spent making defiant speeches and paying tribute to those killed in the war, Mr. Zelensky used his evening address to urge the country to stay united in the face of constant sorrow.
“There are no such bombs that can erase freedom,” he said, “and there will never be such missiles that can break the will of the people who believe in themselves.”
Investigators have identified the four family members who died in a triple murder-suicide in Lynn, Massachusetts, on Tuesday.
Essex County and Lynn investigators say Kahosay Sharifi, 31, shot her father, Mohamad Sharifi, 66, and her brother-in-law, Sanjar Halin, 34, at 98 Rockaway St. She then shot and killed her brother-in-law’s father, Abdul Halin, 56, in his vehicle outside of 44 Laighton St.
Kahosay Sharifi then took her own life in her vehicle in the parking lot at Stop & Shop on Washington Street, investigators said.
Investigators have not discussed a possible motive, but a Facebook post may shed light on what led up to the shootings. Just moments before the shootings, Kahosay Sharifi posted on Facebook that her brother-in-law physically abused her sister for 14 years and that both sets of parents knew, but did nothing to stop it.
“There’s no excuse for what he did. He kept doing it because no one did anything about it,” she wrote. “This whole mindset of ‘just work it out’ needs to change because it is not healthy. I will not deal with this nonsense.”
Officials declined comment on the post.
“We cannot confirm, nor will we comment on, information contained in social media postings,” investigators said in a release.
Lynn police responded to 98 Rockaway St. shortly before 2:55 p.m. Tuesday after receiving a report of shots fired in the area. The 66-year-old and 34-year-old victims were found at the Rockaway address.
Shortly after 4:25 p.m., the 31-year-old woman was found dead inside her vehicle in the parking lot of the Stop & Shop grocery store at 35 Washington St. Authorities determined that she died of a self-inflicted gunshot wound.
Investigators later found the 56-year-old man dead inside a vehicle that was parked outside 44 Laighton St., which is less than a mile away from the Rockaway Street shooting scene and less than half a mile away from the Stop & Shop shooting scene.
A GoFundMe page identified the victims as members of the Sharifi family and said the tragedy was a result of mental health issues.
“Abuse of all types takes a significant toll on individuals affected, and leads to damage and loss in many ways … now two young children are fatherless,” a family member wrote. “We are absolutely traumatized, heartbroken, and lost.”
The shooting is being investigated by Lynn police, the Essex State Police Detective Unit and Blodgett’s office.
“Because the minor’s sex at birth determines whether or not the minor can receive certain types of medical care under the law, Act 626 discriminates on the basis of sex,” the court’s ruling Thursday said.
The American Civil Liberties Union challenged the law on behalf of four transgender youth and their families, as well as two doctors who provide gender confirming treatments.
Republican Gov. Asa Hutchinson vetoed the ban last year, but GOP lawmakers overrode him to enact the law.
Multiple medical groups, including the American Medical Association, oppose the ban and have said the care is safe if properly administered. The Justice Department has also opposed the ban as unconstitutional.
Arkansas argued that the restriction is within the state’s authority to regulate medical practices. An attorney for the ACLU told the appeals panel in June that reinstating the restriction would create uncertainty for families around the state.
Hutchinson vetoed the ban following pleas from pediatricians, social workers and the parents of transgender youth who said the measure would harm a community already at risk for depression and suicide. Hutchinson said the law went too far, especially since it wouldn’t exempt youth already receiving the care.
Two people have pleaded guilty in a scheme to peddle a diary and other items belonging to Joe Biden’s daughter to the conservative group Project Veritas for $40,000, prosecutors said Thursday.
The two, both from Florida, pleaded guilty to conspiracy to commit interstate transportation of stolen property, Manhattan US attorney Damian Williams’ office said.
While authorities did not identify Biden, the type of property stolen or the organization that paid, the details of the investigation have been public for months.
“Aimee Harris and Robert Kurlander pled guilty to conspiracy to commit interstate transportation of stolen property involving the theft of personal belongings of an immediate family member of a then former government official who was a candidate for national political office,” the US attorney’s office in the southern district of New York announced in a statement on Thursday.
Ashley Biden stored the diary, tax records, a digital device with family photos and a cellphone in September 2020 in a Delray Beach, Florida, home where one of the defendants was living at the time, prosecutors said in a release.
According to case interviews and documents reviewed by the New York Times, Biden left her belongings in the home of a friend at that time and planned to collect them later that year. The friend, who also knew Harris, allowed Harris to also stay at the home as she was embroiled in a custody dispute and was facing financial struggles.
Prosecutors said Harris stole the items and got in touch with the other defendant, a man who contacted Project Veritas, which asked for photos of the material and then paid for the two to bring it to New York.
According to Williams, the pair sold the property for “$40,000 and even returned to take more of the victim’s property when asked to do so. Harris and Kurlander sought to profit from their theft of another person’s personal property, and they now stand convicted of a federal felony as a result.”
Project Veritas has said it received the diary from “tipsters” who said it had been abandoned in a room. The activist group, which identifies itself as a news organization, said it turned the journal over to law enforcement and never did anything illegal.
According to the group and its founder, James O’Keefe, Project Veritas “was not involved in any theft of property and that all of Project Veritas’s information on how the confidential sources found the property came from the sources themselves”.
When asked earlier this year by New York magazine whether he had a right to publish the diary’s details, O’Keefe replied: “Someone can provide information to me – a third party – and I have a first amendment right to publish that.”
Project Veritas is best known for conducting hidden camera stings that have embarrassed news outlets, labor organizations and Democratic politicians.
In efforts to verify the diary’s authenticity, a Project Veritas operative attempted to deceive Biden during a phone call into confirming that the diary did actually belong to her.
According to Biden’s lawyers, the group then contacted them in efforts to land an interview with her father prior to the election. Biden’s lawyers, who then reached out to federal prosecutors, accused the group of its “extortionate effort to secure an interview”.
Both Harris and Kurlander, who were released from custody after the court hearing, apologized for their actions. “I sincerely apologize for any actions and know what I did was illegal,” said Harris, according to the New York Times.
“I know what I did was wrong and awful and I apologize,” said Kurlander.
The pair pleaded guilty to one count of conspiracy to commit interstate transportation of stolen property. The count carries a maximum sentence of five years in prison. They also each agreed to forfeit $20,000, according to the attorney’s office.
President Joe Biden confirmed Wednesday what many have anticipated for months – a plan to forgive or reduce student loan debt for millions of debt-saddled borrowers.
If you earn less than $125,000 annually, he said, you’re eligible to receive cancellation of up to $10,000 in federal student loans. If you received a Pell Grant, you can get up to $20,000 forgiven. If you’re not eligible for any student debt forgiveness, your pause on repayments continues to be paused until year end. The Department of Education is also working on a proposal introducing a new repayment plan to ease the burden on borrowers.
Since the start of the pandemic in 2020, borrowers haven’t had to pay a cent on their federal student loans. During this time, the pressure grew for the president to cancel the debt. It was one of the platforms Biden ran on for president in 2020.
Though the plan was welcomed by many, it still garnered criticism. Many had sought higher forgiveness amounts – $50,000 or even all amounts, no matter how large. The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.
You can’t just yet. The application will be available no later than Dec. 31, when the pause on federal student loan repayments terminates.
Nearly 8 million borrowers may be automatically eligible to receive relief because relevant income data is already available to the Department of Education.
What’s Biden’s student loan forgiveness plan?
Individuals with an annual income of less than $125,000 (or under $250,000 for married couples or heads of households) are entitled to have up to $10,000 in federal student loans canceled. No private loans will be forgiven.
Those who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation.
For those who still have student debt, the repayment pause since March 2020 will be extended to the end of the year. Borrowers will resume payments in January.
What is a Pell Grant?
Federal funding that’s usually awarded only to students who display exceptional financial need and have not earned a bachelor’s, graduate or professional degree. Sometimes, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.
Unlike a loan, a Pell Grant does not have to be repaid, except under certain circumstances. Those include a change in enrollment status or if you received outside scholarships or grants that reduced your need for federal student aid.
A one-time maximum debt forgiveness of $10,000 per borrower will cost the U.S. government around $300 billion for borrowers with incomes less than $125,000, according to analysis published on Tuesday by Junlei Chen and Kent Smetters at the Penn Wharton Budget Model, based at the University of Pennsylvania. This cost increases to $330 billion if the program continues over the standard 10-year budget window.
Before the announcement, the Government Accountability Office estimated that alone, the payment pause since the start of the pandemic cost the government $102 billion. That amount included suspending all payments due, interest accrual and involuntary collections for loans in default from March 13, 2020, to Aug. 31, 2022.
Who benefits most from the student debt forgiveness plan?
Mostly higher-income households. Between 69% and 73% of the debt forgiven accrues to households in the top 60% of the income distribution, Chen and Smetters said.
A New York Federal Reserve study in April, though, said that the income cap to the forgiveness “substantially reduces the cost of student loan forgiveness and increases the share of benefit going to borrowers who are more likely to struggle repaying their debts.”
For example, an income cap of $75,000 for a $10,000 cancellation raises the share of forgiven loan dollars going to borrowers in low-income neighborhoods to 35% from 25% and the share going to lower credit score borrowers to 42% from 37%, it said. Income caps also increase the share of loans forgiven that were delinquent before the pandemic to 60% from 34%.
What’s the average student loan debt?
The average federal student loan debt balance is $37,667, according to Education Data Initiative, which collects data and statistics about the U.S. education system.
How many Americans have student loans outstanding?
About 45 million Americans hold federal student loan debt, according to federal data. The loan forgiveness plan should provide relief to about 43 million borrowers and cancel the full remaining balance for nearly 45% of those borrowers.
The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.
Most (67%) student loan borrowers are under 40 years old, but 57% of all balances are owed by those under 40. That means those with larger balances are more likely to be older or to have taken out loans for graduate school, it said.
The White House estimates that its initiative will cancel the full remaining balance for roughly 20 million borrowers.
What’s the average outstanding student loan debt amount?
The average federal student loan debt balance is $37,667 while the total average balance (including private loan debt) may be as high as $40,274, Education Data Initiative estimates.
Is student loan forgiveness taxable?
The debt relief isn’t counted as taxable income for federal income tax purposes, the White House says.
Would canceling student loan debt increase inflation?
Some prominent economists, including former Treasury Secretary Lawrence Summers and Jason Furman, who was chairman of President Barack Obama’s Council of Economic Advisors, have been vocal critics, saying student debt forgiveness would stoke 40-year high inflation and may be unfair.
“Student loan relief is not free,” Furman tweeted on Aug. 19. “Part of it would be paid for by the 87% of Americans who do not benefit but lose out from inflation. Part of it would be paid for by future spending cuts & tax increases—with uncertainty about who will bear those costs.”
The Committee for a Responsible Federal Budget estimates Biden’s plan “would more than undo the deflationary pressures from the Inflation Reduction Act and add 0.15 percentage points of additional inflation in the near-term,” noted Sarah Foster, Bankrate analyst.
The Federal Reserve has been on an aggressive rate-raising cycle to cool demand, but giving people spending money could stymie that effort.
And those economists aren’t the only ones worried. Hit already by hefty inflation, 59% of Americans are concerned student loan forgiveness will make inflation worse, according to a CNBC survey, conducted online by Momentive among a national sample of 5,142 adults from Aug. 4 to 15.
The money you have left after paying taxes and necessary cost-of-living expenses. It’s different from disposable income, which is simply the amount of money you have left after paying taxes.
Knowing what discretionary income is is important because many federal student loan repayment plans are income-driven and have payments that are based on your discretionary income.
If you qualify for student debt forgiveness, what should you do with any extra money?
“Student loan forgiveness will likely decrease your monthly payment or get rid of it entirely,” said Dan Casey of Bridgeriver Advisors in Bloomfield Hills, Mich.
Take that freed up money to pay off high-interest debt like credit cards, build up your emergency fund, or invest it in your retirement. Even though today looks brighter, the economy is still on shaky footing.
Does Congress need to approve Biden’s loan forgiveness plan?
No. The White House says it is using the authority Congress granted the Department of Education to forgive the outstanding federal student loans.
I paid off student loans recently. Am I eligible for a refund?
The federal government first announced the student loan payment pause on March 13, 2020. The U.S. Department of Education says borrowers who made payments during the pause – including auto-debit payments – can request a refund with their loan servicer.
Borrowers can look up their loan servicer on the agency’s website.
If you don’t qualify for student loan forgiveness, what should you do to prepare to start repaying in January?
“If you haven’t made a student loan payment since the pause began, it’s important to understand how much you’ll owe each month,” Daniel Milan, advisor at Cornerstone Financial Services, said.
Then, review the interest rates on your loans and start paying off the highest interest ones first, enrolling in autopay so you don’t miss any payments while you get back into the habit of paying regularly and consider refinancing if it lowers your payments.
“Moving multiple loans into one loan can also help you keep better track of how much you actually owe,” he said.
What’s ahead for future borrowers?
To “substantially” reduce future monthly payments for lower- and middle-income borrowers and protect more income from loan payments, the Department of Education is proposing a new income-driven repayment plan.
Here are some things being proposed:
Cutting the amount borrowers have to repay each month and curbing interest so a balance won’t grow so long as borrowers make their required monthly payments.
Loan balance forgiveness after 10 years, instead of 20, under many income-driven repayment plans for borrowers with original loan balances of $12,000 or less. This will allow nearly all community college borrowers to be debt-free within 10 years, the White House said.
Starting next summer, the Department of Education can automatically pull borrower’s income information each year, avoiding the hassle of needing to recertify their income annually and make it easier for borrowers to stay enrolled.
Public servants will also have an easier time claiming credits for time of service to go toward debt relief under the Public Service Loan Forgiveness (PSLF) program. The Department of Education has already made some temporary changes toward that end. To apply for forgiveness or payments to count toward forgiveness under the temporary changes, visit the PSLF Help Tool.
A full list of proposed regulations will be published in the coming days on the Federal Register, and the public is invited to comment on the draft rule for 30 days.
Parent PLUS loans are federal student loans issued directly to parents with dependents in school, meant to supplement school, state and other federal financial aid offered for a dependent undergraduate student enrolled at least half-time.
What’s being done to keep the cost of college from spiraling?
The Department of Education will publish an annual watch list of programs with the worst debt levels in the country, so students registering for the next academic year can steer clear of programs with poor outcomes. It will also request plans from colleges with the most concerning debt outcomes on how they intend to lower debt levels.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
The latest: Grain shipments from Ukraine are gathering pace under the agreement hammered out by Ukraine, Russia, Turkey and the United Nations in July. Russia’s blockade of Ukrainian Black Sea ports had sent food prices soaring and raised fears of more hunger in the Middle East and Africa. At least 18 ships, including loads of wheat, corn and sunflower oil, have departed.
The fight: The conflict on the ground grinds on as Russia uses its advantage in heavy artillery to pummel Ukrainian forces, which have sometimes been able to put up stiff resistance. In the south, Ukrainian hopes rest on liberating the Russia-occupied Kherson region, and ultimately Crimea, seized by Russia in 2014. Fears of a disaster at the Zaporizhzhia Nuclear Power Station remain as both sides accuse each other of shelling it.
In what’s believed to be the first case of its kind, a student argued that his university violated his Fourth Amendment rights when it asked him for a webcam recording of his testing space.
Leon Neal/Getty Images
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Leon Neal/Getty Images
In what’s believed to be the first case of its kind, a student argued that his university violated his Fourth Amendment rights when it asked him for a webcam recording of his testing space.
Leon Neal/Getty Images
The remote-proctored exam that colleges began using widely during the pandemic saw a first big legal test of its own — one that concluded in a ruling applauded by digital privacy advocates.
A federal judge this week sided with a student at Cleveland State University in Ohio, who alleged that a room scan taken before his online test as a proctoring measure was unconstitutional.
Aaron Ogletree, a chemistry student, sat for a test during his spring semester last year. Before starting the exam, he was asked to show the virtual proctor his bedroom. He complied, and the recording data was stored by one of the school’s third-party proctoring tools, Honorlock, according to the ruling documents.
Ogletree then sued his university, alleging that the room scan violated his Fourth Amendment rights protecting U.S. citizens against “unreasonable searches and seizures.” In its defense, Cleveland State argued that room scans are not “searches,” because they are limited in scope, conducted to ensure academic fairness and exam integrity, and not coerced.
U.S. district court Judge J. Philip Calabrese on Monday decided in Ogletree’s favor: Room scans are unconstitutional.
“Mr. Ogletree’s privacy interest in his home outweighs Cleveland State’s interests in scanning his room. Accordingly, the Court determines that Cleveland State’s practice of conducting room scans is unreasonable under the Fourth Amendment,” Judge Calbrese concluded.
Since 2020, COVID-19 restrictions have forced students to take remote exams, so universities have come to rely on browser plug-ins and other software from third-party proctor companies to prevent cheating on tests.
Civil rights attorney Matthew Besser, who represented Ogletree, described the decision as a landmark case in a post on his firm’s blog: “The case appears to be the first in the nation to hold that the Fourth Amendment protects students from unreasonable video searches of their homes before taking a remote test.”
Privacy advocates laud the ruling
Digital privacy advocates have raised red flags over online proctoring services’ alleged civil liberty violations in recent years.
In December 2020, the Electronic Privacy Information Center filed a complaint against five popular proctoring services, including Honorlock, for their “invasive” and “deceptive” data collection practices. Fight for the Future, a nonprofit that created the website BanEproctoring.com, called the decision a “major victory.”
The opinion documents state that the Ohio university is not aware of any data breaches related to remote exam recordings, and that access to the video is strictly controlled. Cleveland State University has not yet responded to NPR’s request for comment.
The definition of a “search” is in question
The university contested the fact that remote virtual room scans constituted “searches.” It argued that the scan was a regulatory process unrelated to criminality, with a goal of exam integrity.
The scan of Ogletree’s room lasted no more than a minute, and as little as 10 seconds. The defense argued, according to court documents, that the scan was “brief, only revealed items in plain view, and the student controlled the inspection to the extent that the student chose where in the house to take the exam and where in the room to direct the camera.”
The plaintiff was free to object to the scan, the defense added. A student who refused to perform the exam could still take the test, the school argued, even if opting out meant getting no credit for the exam.
The judge didn’t agree.
“Rooms scans go where people otherwise would not, at least not without a warrant or an invitation. Nor does it follow that room scans are not searches because the technology is ‘in general public use,'” Judge Calabrese said.
Lawmakers didn’t address VA’s long struggle to police for-profit schools that engage in deceptive practices, as they set up a program that attracted many for-profit entities. Future Tech had been barred from receiving VA tuition payments for several coursesin 2012 after Illinois officials concluded that the school — then doing business under a different name — had submitted false reports and misled veterans. The school regained its eligibility in 2017, Future Tech said in a statement. Under VRRAP, it charged VA more than $25,000 per student per year, according to a tuition statement seen by The Post — just under the federal cap of $26,000 and about $7,000 higher than other computer boot camps approved by the program.
(CNN)President Joe Biden on Wednesday announced his plan to address student loan debt, which includes debt forgiveness for certain borrowersand extending the pandemic-related payment pause.
Trump-era records were not returned to the government during the waning days of Donald Trump’s presidency despite a determination by his White House counsel that they should be, according to an email that National Archives and Records Administration chief counsel Gary Stern sent to Trump’s lawyers in May 2021.
The contents of the email were confirmed to CNN by a source familiar with the matter. The Washington Post first reported on the email.
Stern wrote in the email, “It is also our understanding that roughly two dozen boxes of original presidential records were kept in the Residence of the White House over the course of President Trump’s last year in office and have not been transferred to NARA, despite a determination by Pat Cipollone in the final days of the administration that they need to be. I had also raised this concern with Scott in the final weeks.”
“Scott” refers to Scott Gast, another Trump attorney who was copied on the message.
Cipollone, along with his former deputy Patrick Philbin, were designated by Trump shortly before he left office to deal with the issues related to his presidential records.
CNN has not been able to reach Cipollone for comment on the email.
The newly reported email underscores the efforts by the National Archives, charged with collecting and sorting presidential material, to retrieve Trump-era documents as an investigation into the handling of presidential records heats up. The FBI executed a search warrant at the former President’s Florida residence earlier this month, with federal agents removing boxes of material from the property.
The National Archives has previously said at least 15 boxes of White House records were recovered from Trump’s Mar-a-Lago resort in January – including some that were classified. And in its search earlier this month, the FBI recovered 11 sets of classified documents, including some materials marked as “top secret/SCI” – one of the highest levels of classification.
CNN has previously reported that the Archives had been working throughout 2021 to get presidential records back from Trump.
According to the source familiar with the matter, there were about a dozen emails and calls over the course of the year as the Archives tried to get Trump to return the presidential documents.
In the final weeks of the administration, the National Archives was aware that it was looking for certain documents because the White House Records office alerted the Archives that they had never received them from the president’s team – including the map of Hurricane Dorian that Trump infamously altered with a Sharpie marker, the letter from former President Barack Obama to Trump and the Kim Jong Un “love letters.”
The Archives was aware that White House records management had identified documents were missing even before Trump left office, according to the source.
Furthermore, the Archives was aware of the two dozen boxes in the residence even while Trump was in office, the source said.
But there was no inventory or documentation of what exactly was in those boxes.
Shortly after Trump left office, the negotiations for return of the documents between the Archives and Trump’s team began, according to the source familiar.There were repeated phone calls and communications to try to get the boxes back, but to no avail, the source said.
Finally, in January 2022, Trump agreed to return 15 boxes – not the 24 boxes the Archives were aware of – that were being kept at his residence at Mar-a-Lago – boxes that the Archives determined contained classified documents.
This story has been updated with additional reporting.
CNN’s Evan Perez and Gabby Orr contributed to this report.
WASHINGTON, Aug 24 (Reuters) – President Joe Biden said on Wednesday the U.S. government will forgive $10,000 in student loans for millions of debt-saddled former college students, keeping a pledge he made in the 2020 campaign for the White House.
The move could boost support for his fellow Democrats in the November congressional elections, but some economists said it may fuel inflation and some Republicans in the U.S. Congress questioned whether the president had the legal authority to cancel the debt.
Debt forgiveness will free up hundreds of billions of dollars for new consumer spending that could be aimed at homebuying and other big-ticket expenses, according to economists who said this would add a new wrinkle to the country’s inflation fight.
The actions are “for families that need them the most – working and middle class people hit especially hard during the pandemic,” Biden said during remarks at the White House. He pledged no high-income households would benefit, addressing a central criticism of the plan.
“I will never apologize for helping working Americans and middle class, especially not to the same folks who voted for a $2 trillion tax cut that mainly benefited the wealthiest Americans and the biggest corporations,” Biden said, referring to a Republican tax cut passed under former President Donald Trump.
Borrower balances have been frozen since the beginning of the COVID-19 outbreak, with no payments required on most federal student loans since March 2020. Many Democrats had pushed for Biden to forgive as much as $50,000 per borrower.
Republicans mostly opposed student loan forgiveness, calling it unfair because it will disproportionately help people earning higher incomes.
“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt,” Senate Minority Leader Mitch McConnell said Wednesday.
The administration has yet to determine the price tag for the package, which will depend on how many people apply for it, White House domestic policy adviser Susan Rice told reporters. Student loans obtained after June 30 this year are not eligible, she said.
White House Press Secretary Karine Jean-Pierre told reporters the administration has legal authority to forgive the debt under a law allowing such action during a national emergency such as a pandemic. Earlier, Republican U.S. Representative Elise Stefanik had called the plan “reckless and illegal.”
American university tuition fees are substantially higher than in most other rich countries, and U.S. consumers carry $1.75 trillion in student loan debt, most of it held by the federal government. Biden said other countries could bypass the United States economically if students are not offered economic relief.
PANDEMIC PAUSE, PELL GRANTS
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FILE PHOTO – Graduating students stand during Harvard University’s 371st Commencement Exercises in Cambridge, Massachusetts, U.S., May 26, 2022. REUTERS/Brian Snyder
The administration will extend a COVID-19 pandemic-linked pause on student loan repayment to year end, while forgiving $10,000 in student debt for single borrowers with annual income under $125,000 a year or married couples who earn less than $250,000, the White House said.
Some 8 million borrowers will be affected automatically, the Department of Education said; others need to apply for forgiveness.
The government is also forgiving up to $20,000 in debt for some 6 million students from low-income familieswho received federal Pell Grants, and proposing a new rule that protects some income from repayment plans and forgives some loan balances after 10 years of repayment, the Education Department said.
A New York Federal Reserve study shows that cutting $10,000 in federal debt for every student would amount to $321 billion and eliminate the entire balance for 11.8 million borrowers, or 31% of them.
INFLATION IMPACT
A senior Biden administration official told reporters the plan could benefit up to 43 million student borrowers, completely canceling the debt for some 20 million.
After Dec. 31, the government will resume requiring payment on remaining student loans that were paused during the pandemic. The official said this would offset any inflationary effects of the forgiveness. Payment resumptions could even have a dampening effect on prices, the official said.
Former U.S. Treasury secretary Larry Summers disagreed. He said on Twitter that debt relief “consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”
Similarly Jason Furman, a Harvard professor who headed the Council of Economic Advisers during the Obama administration, said debt-cancellation would nullify the deflationary powers of the Inflation Reduction Act. “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” he said.
Moody’s analytics chief economist Mark Zandi sided with the White House, saying the resumption of billions of dollars per month in student loan payments “will restrain growth and is disinflationary.”
UVALDE, Texas (AP) — The Uvalde school district fired police chief Pete Arredondo on Wednesday under mounting pressure in the grieving Texas town to punish officers over letting a gunman at Robb Elementary School remain in a fourth-grade classroom for more than an hour with an AR-15 style rifle as 19 children and two teachers were killed.
In a unanimous vote, the Uvalde Consolidated Independent School District’s board of trustees fired Arredondo in an auditorium of parents and survivors of the May 24 massacre. Arredondo, who did not attend the meeting, becomes the first officer to lose his job following one of the deadliest classroom shootings in U.S. history.
His ouster came three months to the day after the tragedy, and less than two weeks before students return to school in Uvalde, where some children remain too scared or scarred to go back inside a classroom.
Cheers from the crowd followed the vote, and some parents walked out of an auditorium in tears. Outside, several Uvalde residents called for other officers to be held accountable.
“Coward!” some in the audience yelled as the meeting got underway.
Arredondo, who has been on leave from the district since June 22, has come under the most intense scrutiny of the nearly 400 officers who rushed to school but waited more than 70 minutes to confront the 18-year-old gunman in a fourth-grade classroom.
Most notably, Arredondo was criticized for not ordering officers to act sooner. Col. Steve McCraw, director of the Texas Department of Public Safety, has said Arredondo was in charge of the law enforcement response to the attack.
Minutes before the meeting of the Uvalde school board got underway, Arredondo’s attorney released a scathing 4,500-word letter that amounted to the police chief’s fullest defense to date of his actions. Over 17 defiant pages, Arredondo is not a fumbling school police chief who a damning state investigation blamed for not taking command and wasted time by looking for keys to a likely unlocked door, but a brave officer whose level-headed decisions saved the lives of other students.
It alleges that Arredondo warned the district about a variety of security issues in the schools a year before the shooting and asserted he wasn’t in charge of the scene. The letter also accused Uvalde school officials of putting his safety at risk by not letting him carry a weapon to the school board meeting if he were to attend, citing “legitimate risks of harm to the public and to Chief Arredondo.”
“Chief Arredondo is a leader and a courageous officer who with all of the other law enforcement officers who responded to the scene, should be celebrated for the lives saved, instead of vilified for those they couldn’t reach in time,” George Hyde wrote.
Following the vote, Hyde’s office did not immediately return a request for comment.
Uvalde school officials have been under mounting pressure from victims’ families and members of the community, many of whom have called for Arredondo’s termination. Superintendent Hal Harrell had first moved to fire Arredondo in July but postponed the decision at the request of the police chief’s attorney.
Among those at the meeting was Ruben Torres, father of Chloe Torres, who survived the shooting in room 112 of the school. He said that as a former Marine, he took an oath that he faithfully executed willingly, and did not understand why officers did not take action when leadership failed.
“Right now, being young, she is having a hard time handling this horrific event,” Torres said.
Shirley Zamora, the mother of a student at Robb Elementary, said accountability shouldn’t end with Arredondo’s dismissal.
“This is just going to be the beginning. It’s a long process,” she said.
Only one other officer — Uvalde Police Department Lt. Mariano Pargas, who was the city’s acting police chief on the day of massacre — is known to have been placed on leave for their actions during the shooting.
The Texas Department of Public Safety, which had more than 90 state troopers at the scene, has also launched an internal investigation into the response by state police. State Sen. Roland Gutierrez, a Democrat who represents Uvalde, said McCraw, the state police chief, also deserves scrutiny.
“You fail at something so badly that people are getting hurt, then certainly we have to have some greater accountability,” he said. “And accountability means losing your job, so be it.”
School officials have said the campus at Robb Elementary will no longer be used when students return Sept 6. Instead, campuses elsewhere in Uvalde will serve as temporary classrooms for elementary school students, not all of whom are willing to return to school in-person following the shooting.
School officials say a virtual academy will be offered for students. The district has not said how many students will attend virtually, but a new state law passed last year in Texas following the pandemic limits the number of eligible students receiving remote instruction to “10% of all enrolled students within a given school system.”
Schools can seek a waiver to exceed the limit but Uvalde has not done so, according to the Texas Education Agency.
New measures to improve school safety in Uvalde include “8-foot, non-scalable perimeter fencing” at elementary, middle and high school campuses, according to the school district. Officials say they have also installed additional security cameras, upgraded locks, enhanced training for district staff and improving communication.
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Associated Press writer Paul J. Weber in Austin, Texas, contributed to this report.
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For more AP coverage of the Uvalde school shooting: https://apnews.com/hub/uvalde-school-shooting
The latest: Grain shipments from Ukraine are gathering pace under the agreement hammered out by Ukraine, Russia, Turkey and the United Nations in July. Russia’s blockade of Ukrainian Black Sea ports had sent food prices soaring and raised fears of more hunger in the Middle East and Africa. At least 18 ships, including loads of wheat, corn and sunflower oil, have departed.
The fight: The conflict on the ground grinds on as Russia uses its advantage in heavy artillery to pummel Ukrainian forces, which have sometimes been able to put up stiff resistance. In the south, Ukrainian hopes rest on liberating the Russia-occupied Kherson region, and ultimately Crimea, seized by Russia in 2014. Fears of a disaster at the Zaporizhzhia Nuclear Power Station remain as both sides accuse each other of shelling it.
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