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Bill Gates" 1974 Harvard Student Resume: Here Are The Mistakes He Made

Microsoft Corporation (NASDAQ: MSFT) co-founder Bill Gates recently shared his 1974 resume on LinkedIn.  read more.....»»

Category: blogSource: benzingaAug 13th, 2022

Student-loan forgiveness FAQ: Everything you need to know about Biden"s $10,000 debt cancellation

Biden just canceled $10,000 of student debt for most borrowers and $20,000 for Pell Grant recipients. Here are the answers to all your questions. President Joe Biden motions while boarding Air Force One at Los Angeles International Airport after attending the Summit of the Americas in Los Angeles, Calif., on June 11, 2022.AP Photo/Evan Vucci Biden announced Wednesday he will forgive $10,000 of student debt for most borrowers. The program's reveal sparked questions on the process, eligibility, and when payments will resume. Here's what you need to know about debt cancelation, the payment freeze, and the other details of the plan.  President Joe Biden rolled out his plan for student loan forgiveness on Wednesday, accomplishing a key campaign promise and extending relief to millions of borrowers.Here's what you need to know:How much student debt is being forgiven?The administration will provide up to $10,000 for eligible borrowers who didn't receive Pell Grants and up to $20,000 for Pell Grant recipients, according to the Department of Education.The "up to" wording implies that amounts below the thresholds will be fully forgiven, but any overlap will be void. For example, a borrower who didn't receive Pell Grants and has a debt balance of $7,000 will receive $7,000 in loan forgiveness.Who is eligible for having their student debt canceled?Individual federal borrowers earning less than $125,000 are eligible for relief. Couples filing jointly and earning less than $250,000 are also eligible for forgiveness on federal loans.Many eligible borrowers won't even need to send in their income data for relief. Almost 8 million borrowers could have their debt forgiven automatically, since relevant income data is already available to the Department of Education.Who is excluded from debt relief?A few groups won't see any aid from Biden's plan.Individuals earning more than $125,000 and couples making more than $250,000 jointly are out of luck. That leaves out many students who racked up huge debt balances in lengthy programs to take on higher paying jobs in sectors like law, medicine, and finance.Students who took out loans from private lenders are also ineligible for debt cancellation. Though these borrowers only account for roughly 8% of outstanding student debt, that's about $131 billion in loans that aren't affected by Biden's program.While Biden did not mention graduate school debt and parents who took on loans to send their kids to college will be excluded from relief, specific details for those groups have yet to be announced. What happens if I still have debt left in my balance after some loans are canceled?Any debt remaining after loans are forgiven will still need to be paid back, but borrowers will have some new help for getting their balances back to zero.Borrowers on income-driven repayment plans will now only need to pay 5% of their discretionary income monthly on undergraduate loans. That's down from the previous share of 10%. The government will also cover IDR borrowers' unpaid monthly interest, meaning borrowers' loan balances won't grow as long as they make their monthly payments.When will student-loan payments resume?Biden also pushed back the expiration date for the student loan repayment pause on Wednesday to December 31 from August 31. That gives borrowers another four months before they need to resume paying down their student debt.Is the forgiven debt taxable?The American Rescue Plan made student loan forgiveness tax-free through 2025, meaning borrowers eligible for cancelation won't face a larger federal tax bill come April.The state level is a bit trickier. Many states' tax codes treat forgiven debt the same way the federal law does, meaning eligible borrowers will be off the hook for higher taxes. Yet in states where forgiven debt is treated as income, borrowers might have to pay back some of their forgiven balance in the form of state income taxes.How do I apply for relief?For borrowers who won't have their debt automatically forgiven, the Department of Education will require an application to collect relevant income data and other details.The White House hasn't said when the application will be available, but it did note that it will come online before December 31, when the freeze on loan repayment is scheduled to end. According to the Education Department, borrowers can receive a notification when the application becomes available here. Despite the department's announcement, student-loan companies have cautioned that it might take longer than expected to implement any relief due to the significant changes that they will be required to make to millions of borrowers' accounts. Read the original article on Business Insider.....»»

Category: smallbizSource: nytAug 24th, 2022

With student-loan payments set to resume in just over a week, lawmakers are making their last-ditch efforts to sway Biden"s debt relief plans. Here"s what they"re saying.

It's a pivotal time for millions of student-loan borrowers as they await news of a payment pause extension and debt cancellation before August 31. President Joe BidenDrew Angerer/Getty Images Student-loan payments are set to resume in just over a week. Lawmakers are using this time to sway Biden's decision on a payment pause extension and debt cancellation. Advocates want Biden to go big on forgiveness. Critics worry it will exacerbate inflation. Long-awaited relief could finally be in store for millions of federal student-loan borrowers this week — and lawmakers are pushing for their desired outcomes up until the final bell.On the campaign trail, President Joe Biden told his voters he would act on the growing $1.7 trillion student debt crisis. He extended the student-loan payment pause as one of his first actions in office, and continued to extend it an additional three times, most recently through August 31.But he also campaigned on approving $10,000 in debt cancellation, and while he has not publicly confirmed the exact amount of relief he is considering, he said himself that an announcement of relief will be made before borrowers have to restart paying off their debt.But those two policies — debt cancellation and a payment pause extension — are still two major question marks, and borrowers have just over a week before they could be hit with another monthly bill. Lawmakers and advocates want answers.Republicans on the House education committee wrote on Twitter on Monday, "#studentloan borrowers and servicers need clarity on what @POTUS and @usedgov intend to do about the repayment pause. Why is the administration taking so long, and causing so much anxiety?" Education Secretary Miguel Cardona said on Sunday that borrowers will have an update "within the next week or so," and the department declined to comment on the record to Insider on a specific announcement timeline. But the department is ready to implement relief once Biden signs off — Politico recently obtained detailed plans on its preparedness to carry out loan forgiveness.In the meantime, Democrats are urging the president to go big, while Republicans want to limit relief.The student-debt relief debate continuesStudent-loan forgiveness has always been controversial. While advocates for relief say canceling debt and extending the pause will stimulate the economy and help borrowers who need it the most, critics have argued any broad relief will exacerbate inflation and help the highest earners. Those arguments haven't changed — but they have ramped up in anticipation of a decision from Biden.Chair of the Congressional Progressive Caucus Pramila Jayapal wrote on Twitter on Monday that "50% of parents with student loan debt said that if payments restart, they won't be able to meet their families' basic financial needs.""That's wrong," Jayapal wrote. "@POTUS must cancel student loan debt."Vermont Sen. Bernie Sanders tweeted on Monday, "if we can bail out Wall Street after their greed, recklessness, and illegal behavior drove us into the worst recession in modern history, then YES — we absolutely can cancel every single cent of student debt in this country."Republican lawmakers feel otherwise. Three of them recently introduced legislation to end the student-loan payment pause and prevent Biden from enacting broad student loan forgiveness. Rep. Adam Kinzinger of Illinois wrote on Monday that if Biden cancels debt for students, will he also forgive debt for "those who didn't go to college, like the truck driver who is paying off his truck? Or the barber paying off his equipment?"Kinzinger also appeared to endorse a tweet thread from former Treasury Secretary Larry Summers who said he hopes Biden "does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases."—Lawrence H. Summers (@LHSummers) August 22, 2022While many critics have pointed to inflation as to why student-loan relief should not be implemented, Insider previously reported that the economy has been doing fine without student-loan payments, and some administration officials would agree. Treasury Secretary Janet Yellen told lawmakers in May that broad relief "could be good for the economy," and she recognizes the "substantial burden" debt can have on borrowers.It remains to be seen which argument will win over Biden, and whether all federal borrowers will reap the benefits of relief. NAACP's Director of Youth and College Wisdom Cole said in a statement that if Biden can keep extending the pause, there's no reason he can't cancel at least $50,000 in student debt."Do it to reduce the racial wealth gap, do it to capture the interest of many who will participate in the November election, do it for the future of American families and communities," Cole said. "Every generation will be grateful you did."Read the original article on Business Insider.....»»

Category: dealsSource: nytAug 23rd, 2022

DEBT DIARIES: 28 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with more than two dozen student-loan borrowers eagerly awaiting Biden's expected announcement on debt forgiveness. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden extended the pause for a fourth time, through August 31, citing uncertainty with the pandemic. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Now, Biden is reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and that announcement is likely to happen in August, closer to when payments are set to resume. But that relief could leave some borrowers out, like parents and graduate students, and the amount will not make a huge difference to those with much larger debt loads.Over the past two years, Insider has spoken with over two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.A 61-year-old student-loan borrower chooses between paying her debt and paying for health insurance — and Biden's forgiveness plans won't helpMarianne Ayala/InsiderRobin O'Brien, 61,  could not foresee the pandemic when she took out student loans to go to graduate school. There's no way she could have anticipated contracting COVID-19, and the medical bills that came along with it.Now, as Biden gets closer to making a decision on broad student-loan forgiveness, O'Brien is also forced to make a decision: paying her medical bills or her $64,000 student loan bills — and she knows she cannot afford both. She's disappointed graduate students are not being considered in Biden's relief plans.Read the full story here. A single mom who took on $187,000 in student debt for her kids wishes Biden would consider parents in his loan-forgiveness plans: 'I just don't feel like it's fair that we're overlooked'Marianne Ayala/InsiderAdria Mansfield, 43, has $187,000 in student debt she took out for her kids' education because it was the only way she could afford to give them the futures they wanted. But while Mansfield is among the three million families with parent PLUS loans, it's unclear whether they will be included in Biden's loan forgiveness plans. Mansfield wishes people like her were part of the conversation."Half of our children would not be able to go to school and become successful if it weren't for the parents," Mansfield said "And I just don't feel like it's fair that we're overlooked."Read the full story here. Meet a 37-year-old with $108,100 in student debt who lives in a school bus because rent is unaffordable: 'Student-loan debt is by far my biggest regret'Marianne Ayala/InsiderNick Crocker found a way to counter spiking rent costs in the country: moving into a school bus. But that doesn't mean he's able to pay off his $108,000 student debt load. Graduating into the 2008 recession, Crocker wasn't able to find a job in his field of study, pushing him to fall behind on his private student loan payments. Now, he's not sure when he'll ever be able to get out from under the debt.Read the full story here. Meet a first-generation attorney with $347,000 in student debt who can't land a job and says 'there are a substantial number of people like me that are being forgotten'Marianne Ayala/InsiderSteve Pederzani, 37, was under the impression getting a law degree would ensure his financial security for life. As a first-generation student, Pederzani wanted to take his career as far as it would go, and he was advised that getting through law school and passing the bar would be worth the debt. It wasn't — he now has $347,000 in student loans and can't land a job as a licensed attorney, and he wishes people would stop equating a law degree with immediate success.Read the full story here. Meet a man with $47,000 in student debt who's been trapped in a student-loan repayment 'bureaucracy nightmare' for nearly 3 decades without the debt cancellation he was promisedMarianne Ayala/InsiderIn 1995, Jason Harmon enrolled in the first version of an income-contingent repayment plan, which gives him affordable monthly payments based on his income with the promise of loan forgiveness after 25 years.But it's now been 27 years, and Harmon still has 9 predicted years left of repayment.Income-driven repayment plans have been under scrutiny in recent years over loan company mismanagement of the plans, in which they have not kept track of borrowers' payments, pushing many of them off the forgiveness track. Harmon is one of those borrowers, and he doesn't see his $47,000 debt balance going away anytime soon.Read the full story here.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 2nd, 2022

Meet a man with $47,000 in student debt who"s been trapped in a student-loan repayment "bureaucracy nightmare" for nearly 3 decades without the debt cancellation he was promised

Jason Harmon qualified for student-loan forgiveness 2 years ago — but his paperwork is missing, and he's stuck in repayment for at least 9 more years. Jason Harmon, 53, has been on an income-driven repayment plan for his student loans for nearly three decades.Jason Harmon Jason Harmon enrolled in an income-contingent repayment plan for student loans in 1995. He was promised loan forgiveness after 25 years, but he's still repaying the debt with nearly a decade to go. This is due to paperwork mismanagement by loan companies that have kept many borrowers in repayment.  In 1995, Jason Harmon graduated from the University of Arkansas with $26,000 in student debt, and he enrolled in a 25-year income-driven repayment plan.The plan, along with others that have collectively enrolled millions borrowers over the years, was designed to keep his loan payments manageable by pegging them to his earnings each year. After the quarter century passed, any lingering balance was to be forgiven.Twenty-seven years later, Harmon now holds a $47,000 student-loan balance and still has an estimated nine more years of repayment, and that's thanks to accrued interest on top of yearslong servicer mismanagement of student-loan repayment plans based on income. On top of it all, his wife — who he married in 2004 — also holds a debt load of nearly $200,000."We are literally crushed by this debt," Harmon, 53, told Insider. "This loan's never going away. We could have no vehicles, we could have a rental instead of a mortgage, we could cut most things out of our life, and we still wouldn't touch the debt we have."Harmon said he had every intention of paying off the debt that he borrowed, but at the time, the repayment plan established under President Bill Clinton — known as the income-contingent repayment plan — seemed like the best option for him because he was not making sufficient income as a journalist. Then, the 2008 recession hit and he lost his journalism job, and Harmon said he has been unable to maintain meaningful employment since then. He now works as a fishing guide in Arkansas and brings in only a small income.Despite the employment hurdles, Harmon said he remained consistent on his monthly student-loan payments. But issues arose when his loans were transferred to a new student-loan company and progress that he made toward his payments were lost, pushing back his repayment timeline by nearly a decade.He said he just wanted the loan forgiveness he signed up for so he and his wife — whose income they mainly rely on — wouldn't have monthly bills hanging over their heads for the foreseeable future."I don't think I'm ever going to pay this debt off in my whole life," Harmon said. "And it's crippling psychologically in the sense that it's a physical manifestation of your dreams not working out. And I don't think the government should earn interest off the dreams of its citizens."'I was in this bureaucracy nightmare'Harmon thought the terms of the income-contingent plan he agreed to under Clinton were simple. He would send in paperwork once a year verifying his income, and he would make the monthly payments the Education Department calculated for him for 25 years, with loan forgiveness at the end.But he couldn't have foreseen the challenges that arose in 2013, when his loans were transferred to the student-loan company MOHELA. After he was notified of the transfer, Harmon said, he was instructed to select a new version of the income-driven repayment plan he had been on for 18 years, and when he later contacted the company to ask about loan forgiveness it said some of his paperwork was missing, pushing him off track."Suddenly, I was in this bureaucracy nightmare where any question I had didn't go anywhere — any time I needed help it was a never-ending phone tree where I'm just being transferred from one person to another," Harmon said.An NPR investigation from April delivered proof of paperwork issues with the types of plans people like Harmon were on. NPR obtained internal documents indicating that three student-loan companies — PHEAA, CornerStone, and MOHELA — weren't tracking payments borrowers made over the past two decades for their income-driven repayment plans.And a student-loan worker who helped enroll borrowers in a 2007 version of the repayment plan previously described the paperwork to Insider as "overly" complicated.'The government is not fulfilling its obligation'US lawmakers are aware of failures with income-driven repayment plans. After NPR's investigation came out, Rep. Bobby Scott, the top Democrat on the House education committee, said the findings were "worse than we expected," and the ranking member of the committee, Rep. Virginia Foxx, later said the program "turned out to be a complete disaster and taxpayers are forced to foot the bill for these mistakes."A report from the Government Accountability Office in April expanded on the plans' failures. It found that the department had approved just 157 loans for full forgiveness under income-driven repayment plans, with 7,700 more loans "potentially eligible" for forgiveness.Following revelations of the plans' failures, the Education Department in April announced temporary reforms meant to bring 3.6 million borrowers who were on income-driven plans closer to relief, and Under Secretary of Education James Kvaal said in a recent interview that the department would release details on a new income-based plan in the coming weeks, as part of its regulatory proposals. Insider previously reported that the release of those details was delayed.While Harmon agrees these reforms are warranted, he said that they were long overdue — and that failures to address them had changed the trajectory of his life."I never wanted a free ride and was always willing to repay my original loan balance, but the government is not fulfilling its obligation," he said. "This debt is a trap that prevented us from having children or enjoying life together as a married couple for decades."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 31st, 2022

Spirit is merging into JetBlue and will disappear from the skies. See the full history of the airline, from trucking company to low-cost giant.

Soon, the iconic Spirit brand that has become a household name may leave the industry forever. Spirit Airlines old and new aircraftMichael Carter/Airliners.net, Felipe | Santiago/Shutterstock Spirit Airlines has agreed to merge with JetBlue Airways instead of Frontier Airlines. The merger is worth $3.8 billion and could provide more comfort to customers while maintaining low fares. Spirit's history dates back to 1964, when it started as a trucking company in Michigan. Spirit Airlines is one of the most recognizable airlines in the US, serving over 80 destinations across the Americas with its bright yellow aircraft and ultra-low-cost business model.Spirit AirlinesGetty ImagesSource: Spirit AirlinesHowever, the iconic yellow paint job could soon fade from the skies.Spirit Airlines A320 at Boston airportTaylor Rains/InsiderI flew Spirit across the US for $35 after it canceled thousands of flights in August. I wouldn't hesitate to do it again but it wasn't without risks.Denver-based Frontier Airlines announced in February that it reached an agreement with Spirit to merge the two airlines in a $6.6 billion deal.Frontier AirlinesCarlos YudicaBudget airlines Frontier and Spirit to merge in $6.6 billion deal that could create the US' 5th largest airlineHowever, in April, JetBlue Airways threw a wrench in Frontier's plans. JetBlue's bid, which Spirit at the time called "unsolicited," has now been accepted by the low-cost giant.JetBlue A321neo.Business WireSpirit and Frontier Airlines cancel merger deal. It could be good news for JetBlue's competing bid — but bad news for cheap tickets.The Spirit and JetBlue deal is worth $3.8 billion, and JetBlue CEO Robin Hayes says the merger will allow the airline to "grow faster."Marcus Mainka/ShutterstockJetBlue and Spirit have agreed to merge. Passengers may enjoy better service on the combined airline, but Spirit's low prices will vanish."We can go head-to-head with the legacies in more places to lower fares and improve service for everyone," he said in a Thursday press release.JetBlue Airways A321neo.Lukas Wunderlich/ShuttestockHowever, legislators, including Senator Elizabeth Warren of Massachusetts, Senator Bernie Sanders of Vermont, and Representative Alexandria Ocasio-Cortez of New York, have said in the past that the deal could increase fares and worsen customer service.Sen. Elizabeth Warren.Tom Williams/CQ-Roll Call, Inc via Getty ImagesSource: New York TimesThe lawmakers have asked Transportation Secretary Pete Buttigieg and the Justice Department to closely review the merger and to oppose any union if it violates antitrust laws or goes against public interest.Buttigieg is taking an even more high-profile turn as he sells a trillion-dollar infratructure package around the nation. He took his first international trip as a Cabinet member to COP26 in Glasgow last week.Photo by Ian Forsyth/Getty ImagesSource: New York TimesIf the deal does go through, JetBlue said it plans to scrap Spirit's brand by retrofitting all of the budget carrier's planes into JetBlue's product. This would leave Frontier as the US' only large ultra-low-cost airline.Inside Spirit's A320 plane.Thomas Pallini/InsiderSource: InsiderAnalysts say that Frontier being a standalone airline will actually be a good thing because its low-cost competition will put pressure on JetBlue to keep fares low.Frontier Airlines.nyker/ShutterstockOnce it is all said and done, Spirit becoming a part of JetBlue means the famous yellow brand will be no more. Here's a look at the airline's full history from trucking company to low-cost giant.Spirit Airlines aircraft.Carlos Yudica/ShutterstockI prefer to fly low-cost carriers like Spirit and Frontier over major airlines — here's how I avoid the extra fees for tickets, luggage, and foodSpirit was not originally founded as an airline but started as Clippert Trucking Company in 1964. In 1974, the company was refounded as Ground Air Transport Inc. by Michigan-native Ned Homfeld.Tractor trailers roll along the highway in Miami, Florida.Joe Raedle/Getty ImagesSource: Spirit Airlines Association of Flight Attendants AFA-CWAHomfeld eventually founded the first passenger version of Spirit in 1980 — Detroit-based Charter One Airlines. The charter tour company officially launched operations in 1983 using turboprop aircraft.Convair 580 turboprop (not Charter One Airlines)Josef Hanus/ShutterstockSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One focused on gambling trips, offering routes to Atlantic City, New Jersey from Chicago, Detroit, Boston, and Providence, Rhode Island.Atlantic City, New JerseyJohn Greim/LightRocket via Getty ImagesSource: Spirit Airlines Association of Flight Attendants AFA-CWAAs gambling soon became popular in other states, Charter One began ferrying northerners to warmer destinations, including Florida, the Bahamas, Las Vegas, and San Juan.Las Vegas casinoJohn Locher/AP PhotoSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One's operation in the Bahamas is notable because it means Spirit has always offered passenger service beyond the US.Spirit Airlines aircraftThomas Pallini/Business InsiderSource: Simple FlyingIn 1990, a decade after its founding, Charter One launched scheduled air service from Boston, Detroit, and Providence to Atlantic City, marking the start of the company's commercial operations.Spirit Airlines aircraftThomas Pallini/InsiderSource: Spirit Airlines Association of Flight Attendants AFA-CWACharter One leased two Convair 580 turboprops for the service. It would operate the planes for only a couple of years before rebranding to Spirit Airlines.Convair 580 turboprop (not Charter One Airlines).Carlos Yudica/ShutterstockSource: Spirit Airlines Association of Flight Attendants AFA-CWASpirit Airlines was born on May 29, 1992, after changing its name from Charter One and integrating four DC-9 jets into the fleet.Spirit Airlines DC-9.Torsten Maiwald/JetPixSource: Spirit Airlines Association of Flight Attendants AFA-CWA, Airliners.netThe company was able to secure the planes for cheap after the demise of Midway Airlines brought down used aircraft prices.Midway Airlines at Midway Airport in Chicago.Ralf-Finn Hestoft/CORBIS/Corbis via Getty ImagesSource: The Washington Post, International Directory of Company Histories Volume 31On June 1 of the same year, the company launched its first flight from Detroit to Atlantic City, which operated twice daily. The airline's code is NK for "Ned's Kids."Spirit Airlines MD80Mark Kopczak/Airliners.netSource: Simple Flying, International Directory of Company Histories Volume 31, Airliners.netSpirit's early fleet also consisted of McDonnell Douglas MD80 aircraft. According to Plane Spotters, 44 DC-9 and MD80 planes were delivered through the 1990s and early 2000s, with the last MD80 leaving the company in July 2010.Spirit Airlines McDonnell Douglas MD-80Ivan Cholakov/ShutterstockSource: PlaneSpotters, International Directory of Company Histories Volume 31In its early years, Spirit was referred to by Travel Agent Magazine as the "most successful small carrier you've never heard of," flying over a quarter-million people in 1993 and bringing in $21 million in revenue.Spirit AirlinesEQRoySource: International Directory of Company Histories Volume 31The carrier was able to win over customers with cheap fares powered by its low-cost business model, despite axing amenities like inflight meals.Snacks will cost passengers a fee on SpiritThomas Pallini/InsiderSource: ABC News, International Directory of Company Histories Volume 31Furthermore, the company's background as a tour operator helped it fill planes, which averaged about 80% full.Spirit Airlines interior.Thomas Pallini/InsiderSource: International Directory of Company Histories Volume 31Spirit also thrived during the early 1990s because established airlines struggled to turn a profit during the global recession.Vintage TWA aircraftLouLouPhotos/ShutterstockSource: LA Times, International Directory of Company Histories Volume 31This opened doors for startups to acquire cheap planes and nonunion staff that had been employed by collapsed Pan Am, Eastern, and Midway.Pan Am flight attendant serving drinks on the company's 747.Bettmann/Contributor/Getty ImagesSource: LA Times, International Directory of Company Histories Volume 31From 1993 to 1999, Spirit expanded its route network, offering flights to Philadelphia, Orlando, St. Petersburg, Myrtle Beach, Los Angeles, and New York City.Spirit Airlines at Fort Lauderdale-Hollywood International AirportCarlos Yudica/ShutterstockSource: Orlando Airports, International Directory of Company Histories Volume 31However, some major carriers did get in the way of Spirit's expansion. In 1994, Norwest Airlines bought two gates from US Airways at Detroit's main airport for about $1 million, beating out Spirit. Northwest then resold the gates to Trans World Airlines.Northwest Airlines aircraftIvan Cholakov/ShutterstockSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31The setbacks continued throughout 1994. One of Spirit's biggest PR nightmares occurred when it inadvertently overbooked and canceled 1,400 passenger tickets.Spirit Airlines aircraftThomas Pallini/Business InsiderSource: The Plain Dealer, International Directory of Company Histories Volume 31Without realizing it, Spirit gave the wrong booking instructions to travel agents, causing the 1,400 tickets to be invalid even though customers paid for them.Spirit Airlines gateThomas Pallini/Business InsiderSource: The Plain Dealer, International Directory of Company Histories Volume 31The carrier responded to the crisis by saying it guaranteed all paying passengers would get to their destination even if it meant Spirit had to rebook them on a competitor airline.Spirit Airlines passengersVIAVAL TOURS/ShutterstockSource: The Plain Dealer, International Directory of Company Histories Volume 31Despite the setback, Spirit's low-cost strategy continued to drive the company's success. In 1995, Spirit launched its "Freedom Fare" service from Detroit to Philadelphia for $49 one-way. Soon after, Boston was added for $69 one-way.Spirit Airlines MD-80Mark Kopczak/Airliners.netSource: Predatory Pricing in the Airline Industry, International Directory of Company Histories Volume 31By 1996, the company had $60 million in revenue and owned five out of the 11 aircraft in its fleet.Spirit Airlines MD80Michael Carter/Airliners.netSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31While the company was growing, it was starting to face tougher competition. So, it started to seek out a "big brother" to help it along the way, and Delta's regional carrier Comair wanted to buy Spirit for $20 million.Comair Delta Connection aircraftQualityHD/ShutterstockSource: AvGeekery, International Directory of Company Histories Volume 31However, the deal never materialized. Comair pulled out after an incident with budget carrier ValuJet crashed into the Everglades in 1996, which created a stigma about the safety of low-cost airlines.ValuJet aircraftRobert Sullivan/Getty ImagesSource: The Palm Beach Post, Journal of Air Transportation World Wide, International Directory of Company Histories Volume 31To combat customer concerns, Spirit sent out thousands of postcards to reassure the safety of its planes. It also launched the "Catch the Spirit" media campaign that included TV, radio, and billboard ads to sell Spirit's perfect safety record and involved adding a new logo to its aircraft.Catch the Spirit liveryMark Kopczak/Airliners.netSource: Crain's Detroit, Spirit Airlines, International Directory of Company Histories Volume 31, Airliners.netSpirit's only unprofitable year was 1996, mostly due to a 25% rise in fuel prices, consumer hesitation to fly low-cost carriers, and Northwest matching Spirit's fares on its Detroit-Philadelphia route, which pushed the budget airline out of the market.A Northwest Airlines Airbus A319.Rebecca Cook/ReutersSource: Spirit Airlines vs. Northwest Airlines, International Directory of Company Histories Volume 31, Leonard N. Stern School of Business, NYUHowever, Spirit's planes began filling again in 1997.An aerial view shows Spirit Airlines jets parked at McCarran International AirportEthan Miller/Getty ImagesSource: International Directory of Company Histories Volume 31In June of that year, Spirit took over defunct carrier Sun Jet's routes from New Jersey to Florida after it declared bankruptcy. Sun Jet and Spirit had been flying chartered tours on behalf of reservation company World Technology Systems.Sun Jet International AirlinesTrevor Bartlett/AB PicSource: Crain's Detroit, International Directory of Company Histories Volume 31, AB PicSpirit operated the flights for WTS in partnership with Myrtle Beach Jet Express. However, the partnership ended in August 1997 after finger-pointing began between the two carriers.Myrtle Beach Jet ExpressMichael Bernhard/Airliners.netSource: Myrtle Beach Online, International Directory of Company Histories Volume 31, Airliners.netA Jet Express spokesperson commented on Spirit's poor performance, and Homfeld responded by questioning Jet Express' financial status, pointing out it owed the city of Myrtle Beach $770,000 it borrowed for advertising.Spirit Airlines greyscale liveryIvan Cholakov/ShutterstockSource: Myrtle Beach Online, International Directory of Company Histories Volume 31Myrtle Beach Jet Express filed bankruptcy in 1999, but Sun News writer David Wren blamed Spirit for its collapse, claiming the carrier copied its rival's marketing plan and business strategy.Spirit Airlines aircraftOmar F Martinez/ShutterstockSource: Department of Transportation, International Directory of Company Histories Volume 31Nevertheless, by 1998, Spirit was starting to boom. It took advantage of Northwest's looming pilot strike by acquiring more aircraft to increase capacity on its competitor's routes.Northwest Airlines pilot strikeJEFF KOWALSKY/Getty ImagesSource: New York Times, International Directory of Company Histories Volume 31That year, Spirit saw a revenue of $121 million, had 20 aircraft in its fleet, and posted the industry's highest load factor that year with 76.4% full. Moreover, it carried 1.4 million passengers, increasing its customer traffic by 80% compared to 1997.Spirit AirlinesSkycolors/ShutterstockSource: International Directory of Company Histories Volume 31Spirit got a new home in 1999 when it moved its corporate headquarters from Eastpointe, Michigan to Miramar, Florida. The airline had been courted by a number of other cities before making its decision, including Detroit and Atlantic City.Spirit Airlines headquarters in Miramar, FLJoe Raedle/Getty ImagesSource: Tribune Business News, International Directory of Company Histories Volume 31Miramar made sense because it was in the Fort Lauderdale area where Spirit's tour company was already based, and the airline had been serving Fort Lauderdale-Hollywood International Airport since 1993.Spirit Airlines counter at Fort Lauderdale-Hollywood International AirportJoe Raedle/Getty ImagesSource: Sun-Sentinel, International Directory of Company Histories Volume 31In 2000, Spirit got the attention of the FAA for discrepancies in the marking and placarding of cabin and seats on its DC-9 and MD80 aircraft. The federal regulation violation cost the airline $67,000.Spirit Airlines MD80Mark Kopczak/Airliners.netSource: Federal Aviation Administration, International Directory of Company Histories Volume 31, Airliners.netDespite the hiccup, Spirit continued to expand throughout the 2000s. It added San Juan, Puerto Rico to its scheduled service in 2001. Meanwhile, Boston, Grand Cayman, and San Francisco were added in 2006.Spirit Airlines plane in San Juan, Puerto RicoRICARDO ARDUENGO/Getty ImagesSource: Aviacionline, Massport, Cayman Compass, San Francisco International AirportIn 2002, Spirit began growing its Airbus A320 fleet, which is the only aircraft family in its fleet today. The first livery was greyscale...Spirit Airlines greyscale liveryAngel DiBilio/ShutterstockSource: Aviation Week, Norebbo...the second was the blue paint scheme...Spirit Airlines blue paint schemeCarlos Yudica/ShutterstockSource: USA Today...and the third, which is the most recognized today, is the all-yellow "Bare Fare" livery, introduced in 2014.Spirit Airlines "Bare Fare" liveryCarterAerial/ShutterstockSource: Orlando SentinelIn 2005, Spirit brought on its new CEO and President Ben Baldanza who transitioned the airline to the US' first ultra-low-cost carrier.Former Spirit Airlines CEO Ben BaldanzaCNBC/Getty ImagesSource: Simple FlyingIn 2007, the airline rebranded its business class, Spirit Plus, with the Big Front Seat, which passengers could secure for an extra fee.Spirit Airlines Big Front SeatThomas Pallini/InsiderSource: Spirit Airlines, SeatMaestroIn June 2010, Spirit pilots went on strike for six days amid poor wages and benefits, causing hundreds of flight disruptions. At the time, Spirit Airbus crews were some of the lowest-paid pilots in the US.Spirit Airlines pilot strikeJoe Raedle/ShutterstockSource: The New York TimesAlso that year, Spirit became the first airline to charge for carry-on bags. The move reduced its operating costs because it lowered the aircraft's fuel consumption. It also sped up the boarding process and ensured there was enough overhead bin space.Spirit Airlines bag size checkerEQRoy/ShutterstockSource: ABC NewsIn 2011, the carrier began charging for boarding passes printed at the airport ticket counter and reduced its maximum checked baggage weight from 50 to 40 pounds.Spirit Airlines check in kioskThomas Pallini/InsiderSource: CNNWhile it kept costs low, Spirit's no-frills business strategy has been controversial throughout its history. In 2011, the DOT fined the airline $50,000 for deceptive advertising, claiming it did not include hidden fees, like bags, added to its discounted fares.Spirit Airlines check-in areaThomas Pallini/InsiderSource: Consumer ReportsThen, in 2012, the airline came under fire after it refused to refund dying Vietnam veteran Jerry Meekins' ticket after he was told by his doctor not to fly due to terminal cancer. Spirit cited its strict no-refunds policy as the reason, but still received immense backlash from the veteran community.Spirit AirlinesKen Wolter/Shutterstock.comSource: HuffPostAfter threats to boycott, Baldanza apologized to the vet and personally issued the $197 refund, saying "sometimes we make mistakes." The company also donated $5,000 to the Wounded Warriors Project in Meekins' name.Wounded Warrior ProjectGlynnis Jones/ShutterstockSource: HuffPostDespite its history of controversy and complaints, Spirit continues to be a successful airline. "Spirit is consistently incredibly profitable," said Madhu Unnikrishnan, editor of Skift Airline Weekly.Spirit Airlines blue paint schemeCarlos Yudica/ShutterstockSource: Marker MediumAccording to Unnikrishnan, Spirit was never really concerned about the passenger experience. When a customer emailed Baldanza about a bad flight experience, the CEO responded, "Let him tell the world how bad we are. He's never flown us before anyway and will be back when we save him a penny."Flying Spirit Airlines from Santa Ana, California to Newark, New Jersey.Thomas Pallini/InsiderSource: Marker MediumIn 2008, Spirit was the number one airline for customer complaints but still managed to fly five million passengers and achieve a net profit during the recession, making it one of the few carriers to do so.Spirit Airlines boarding doorThomas Pallini/InsiderSource: Department of TransportationIn 2014, Spirit was the top pick airline for growth for investors, and in 2016, Spirit was the first US carrier to receive the A320neo into its fleet.Spirit Airlines A320neoThomas Pallini/Business InsiderSource: The Motley Fool, AirbusIn November 2017, Spirit's on-time performance ranked second behind Delta. This was a major improvement after coming in dead last among 13 US airlines in 2015.Spirit AirlinesThomas Pallini/InsiderSource: SkiftThe same year, the company announced plans to Wifi equip its aircraft, making it the first ultra-low-cost carrier to do so.Spirit Airlines app on phoneSOPA Images/Getty ImagesAmerica's leader in cheap flights is adding a new feature to its planes that customers will loveIn 2019, Spirit introduced its new President and CEO, Ted Christie. During the same year, the airline was operating 600 daily flights to 72 destinations across the US, Mexico, Central America, and the Caribbean.Spirit Airlines in the CaribbeanSkycolors/ShutterstockSource: Tampa Bay TimesLike every airline, Spirit was hit hard during the coronavirus pandemic, posting a 2020 net loss of $428 million. Nevertheless, Spirit continued to fight back in 2021, expanding operations with new city pairs and new airports.Spirit Airlines passengers during the pandemicPATRICK T. FALLON/Getty ImagesSource: StatistaHowever, Spirit's 2021 full-year earnings revealed its revenue came in at $987.6 million, which was "better than expected" considering the impact of the Omicron variant. The income was 1.8% more than the same time in 2019.Spirit Airlines aircraftGreg K_ca/ShutterstockSource: Spirit AirlinesDespite the strong end of the year, Spirit did face operational issues in August 2021. The chaos was due to a mix of poorly timed weather, system outages, and staff shortages.AP Photo/Eugene GarciaSource: InsiderWhile the setback caused outrage from customers and a warning from the DOT, the company's flight schedule was still growing. On October 6, Spirit reached a major milestone, launching the first of 31 routes from Miami International Airport.Spirit destinations from MiamiSpirit AirlinesSource: Spirit AirlinesSpirit continued to improve into 2022. The carrier has reported strong demand since February and reported a "record-high non-ticket revenue per passenger segment" for the first quarter of 2022. Non-ticket revenue is ancillary fees, like luggage and snacks.Taylor Rains/InsiderSource: Spirit AirlinesTo this day, Spirit has never had an air crash, including during its time as Charter One Airlines. Most impressively, Spirit was the only airline in North America to make the top 10 list for safest airlines in the world in 2018, according to JACDEC data.Spirit Airlines aircraftThiago B Trevisan/ShutterstockSource: JACDECThe airline ranked 26 in 2019, 23 in 2020, and 30 in 2021, coming in third behind JetBlue and Delta last year.Delta Air Lines at JFK.Ron Adar/ShutterstockSource: JACDECDespite its growth, Spirit is merging with JetBlue, pending regulatory approval. It is still unknown which routes will stay and which will go, but what we do know is the new mega-carrier is going to shake up the industry.Spirit Airlines aircraft at the gate.EQRoy/ShutterstockSpirit Airlines is expanding its network with 7 new routes from Philadelphia to the Caribbean and across the USRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 29th, 2022

Transcript: Graham Weaver

     The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business… Read More The post Transcript: Graham Weaver appeared first on The Big Picture.      The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Graham Weaver is the founder and partner at Alpine Investors, a private equity firm, focusing on software and services. Graham has a really interesting background, both engineering at Princeton and essentially launching a PE firm while he was a graduate student at Stanford. Everybody knows the story about Michael Dell launching a computer business out of his dorm room in Texas. This could be the first PE firm I’m familiar with, that got started in a dorm room. What makes Graham so interesting is while everybody else in the world of private equity is focused on the analytics and crunching numbers and creating econometric models that will tell you where to invest, I think they’ve found a very different model that has been extremely successful for them, where the key focus is on talent. How do we find the best talent, put them in place running our investment companies and allow them to generate the sort of returns that you don’t really generate by just looking at a model? I found our conversation absolutely fascinating and I think you will also. With no further ado, my discussion with Alpine Investors’ Graham Weaver. Let’s jump right into this, starting with your background. When I hear someone has an engineering degree, I tend to think of venture capital, not private equity. Tell us a little bit how you went the PE route instead of the VC route. GRAHAM WEAVER, FOUNDER AND CEO, ALPINE INVESTORS: Well, I actually started in private equity right out of undergrad. I really didn’t know the difference between private equity or consulting, or anything. I had zero knowledge of that. And I was fortunate to end up in Morgan Stanley’s private equity group, I loved it and I’ve kind of been at it ever since. RITHOLTZ: Really interesting. So is it from Princeton to Morgan Stanley, and then Stanford, or am I getting the order right? WEAVER: Yeah. When I was at Princeton then I went to Morgan Stanley in their private equity, then I worked at a firm called American Securities for a couple years, and then went to went to business school after that. RITHOLTZ: And somewhere in the middle of this, there’s a pig farm in Missouri that I am having a hard time figuring out what a pig farm has to do with private equity. WEAVER: So the very first deal I worked on, so I come out of school, I’m wearing my Cross pen and my lapel, and I’m like wearing a tie and — RITHOLTZ: All buttoned down. WEAVER: Exactly. And I think I’m a big shot being on Wall Street, and I get shipped out to this pig farm in Missouri which was a deal Morgan Stanley had invested in. They’ve invested a total of a billion, almost a billion dollars of debt and equity, and then suffice to say was not going well. So not that I was going to go save it as a 22-year-old analyst, but I’ve got shipped out. I lived in a CFO’s basement for about five months, and we did everything we could, but it turned out not to be a great investment. RITHOLTZ: So there’s not big money in pigs? WEAVER: Well, it turns out hog prices are wildly cyclical. And you know, there’s the expression, how does a six-foot man drowned in a river that averages five feet? You know, it’s because there’s parts of the river that are deeper. Well, you know, we build our whole model on hog prices being $47 and when we then — RITHOLTZ: And that’s what they average, right? WEAVER: That’s what they average. RITHOLTZ: But that doesn’t tell you how much they swing up and down. WEAVER: It turns out — yeah, they went to $18 and we had $700 million of debt, and that didn’t — RITHOLTZ: $18? WEAVER: That didn’t go well. So yeah. RITHOLTZ: That’s the old joke. It’s not the price, it’s the volatility. WEAVER: Yeah, it was rough. But it was a — that was my introduction to the glamorous business of private equity. RITHOLTZ: And you didn’t turn around and say, “I want nothing to do with this?” WEAVER: I had the time of my life. RITHOLTZ: Really? WEAVER: It was so fun. RITHOLTZ: How was — how was sleeping in the CFO’s basement — was his house on the pig farm? WEAVER: It was. Yeah, it was. The whole entire town smelled like a pig farm and everyone — RITHOLTZ: Which was not especially delightful? WEAVER: It’s not. No, it turns out. And pretty much everyone in the town worked and had some affiliation with the pig farm. The CFO was also a Morgan Stanley guy, and he was probably 27. So neither of us had any idea — RITHOLTZ: So many years, years of experience over you? WEAVER: Yeah, yeah. Exactly. Neither of us had any clue what we were doing. But it really wouldn’t have mattered when your revenue gets cut by like 80%, there’s just not a lot you’re going to do to turn that around. RITHOLTZ: So there’s a cliche about tech firms being started in dorm rooms. How does a private equity firm start in a dorm room? WEAVER: So I show up at Stanford, and I’m in my first week of class. And then similar as today, you have to take these core classes in your first year, which are just not that — you know, they’re just fundamental. They’re not that exciting. So the first class I sit down, and there’s this 25-year-old who’s never worked a day in his life. He’s a PhD student. He’s never taught before, and he’s kind of just reciting out of this strategy book. And I just thought to myself, oh, my God, what have I signed up for? So I had this idea that I was going to go try to buy a business. And I had — you know, in your first three years as an analyst, you basically build a financial model. But I had the confidence of someone I thought I was much more — much better than I was. So I convinced an owner — I started cold calling companies in a sector that I had looked at previously, and I convinced this owner to sell me his business, and then I had to go raise the money, most of which was debt and the little bit of equity that was needed. I financed with credit cards. So that was literally how I started, not your typical private equity founding story. RITHOLTZ: How did that initial PE transaction work out? WEAVER: I did a total of three labeled deals with some add-ons, lost money on one, made money on — or lost a little bit of money on — loss — made a little bit of money on the second one. And then the third one was a total homerun, which actually just sold this year, 20 years later. So that that one turned out well. RITHOLTZ: 20 years? That’s impressive. That’s not the typical private equity holding period. WEAVER: Yeah, well, it was just me. I was the — it was just my — RITHOLTZ: So you could afford to be patient. WEAVER: And it was awesome. It was great. That one — RITHOLTZ: What space was that at? WEAVER: It was the — we had these companies that made these little labels that went on products, like for example in Trader Joe’s private labels things, we made all those labels. It’s a totally unsexy business. RITHOLTZ: Right. WEAVER: But it was very consistent and — RITHOLTZ: And it’s profitable. WEAVER: It was really profitable. And no one wakes up and says, “You know, I’m going to be a hero because I’m going to save half a cent on my label.” So it tends to kind of like just clip along like a bond. RITHOLTZ: Right. WEAVER: So it turned out — it turned out well, but I mean, I had absolutely no idea what I was doing. And so I made every mistake you can imagine. RITHOLTZ: And it still worked out. When you launched in 2001, you started with $50 million, $55 million, something like that? WEAVER: Yeah. RITHOLTZ: And now it’s up to $8 billion close to eight funds. WEAVER: Yeah. RITHOLTZ: And your most recent fund just closed about $2 billion, more or less? WEAVER: Yeah, about 2.4. Yeah. RITHOLTZ: All right. So that’s real money, 2.4. Obviously, you’re doing something right. The track record has to be attractive. Is it the same investors rolling over, or new and different investors? Who is the clientele for this? WEAVER: In the very early days, it was a number of individuals because no institution was going to back — RITHOLTZ: Right. Well, you have to have a certain track record, be around for certain length of period, be able to check all of their due diligence boxes, and that takes time and money. WEAVER: Yeah. And I checked zero of those boxes. RITHOLTZ: Right. Dorm room, check. What else? What else we got? WEAVER: Yeah. Track record. RITHOLTZ: How old is he? 22? WEAVER: No. RITHOLTZ: Sure. Let’s write him a big check. WEAVER: Exactly. I checked no boxes. And that took me like almost a year to figure out. I went to all these institutions and I never got past the first meeting anywhere. And then I found a number — really two individuals who, thank God, I still owe everything to these two. One, I don’t know if I can — RITHOLTZ: Sure. You can say whatever you like. WEAVER: So, one was Tom Steyer, who ran for president. RITHOLTZ: Oh, sure. WEAVER: He was one of the early ones. And then Doug Martin from the Stephens family. And they were just the two best investors you could ever have. They were supportive. And most importantly, they were supportive after Fund I which was not a good fund. So that’s the reason we’re still in business today. RITHOLTZ: Why not good fund, just performance wise, or was it — because when you launch in ’01, we’re still in the early days of a massive downfall in technology, media, Internet straight across the board. Not — you know, it’s not — unless it’s a distressed fund, that’s not the ideal time to launch. WEAVER: Yeah. I would love to say that it was the market, but it wasn’t. It was self-inflicted. RITHOLTZ: Yeah. WEAVER: It was me making a lot of dumb mistakes, being overconfident, you know, and just investing in companies that looked great in the spreadsheet and didn’t — what looks great in the spreadsheet is low purchase price and a lot of leverage. That looks — always looks good in a spreadsheet, but the — RITHOLTZ: Leverage is the problem. WEAVER: The qualitative — yeah, the leverage is the problem and the qualitative things about is it a quality business? Those things you can’t model in a spreadsheet. And so, I just made a lot of dumb mistakes. And actually the whole fund, overall, lost money. I would highly, Barry, not recommend having your first fund when you launched and lose money. It was a — RITHOLTZ: Probably not the best long-term strategy? WEAVER: Yeah. It was anchored around our neck for pretty much a decade. RITHOLTZ: So that raises the question, if the first fund was a bit of a stiff, how did you raise money for the second fund? WEAVER: Well, thankfully, we were — I really communicated a lot with Doug and Tom, and they understood. They could see us getting better. You know, they could see us making a lot of improvements, fixing a lot of the things that we got wrong. And both of them were pretty seasoned investors, both of them had had mistakes they’ve made before. And so they, you know, thank God, were really supportive. And then it wasn’t like immediately we started knocking out of the park either, but we started getting better and better. And then really around the time of the recession was when we really completely transformed and became kind of the business that we are today. RITHOLTZ: And it’s a little bit of a cliche, they’re not so much investing in a fund as they’re investing in you as the manager. Obviously, they saw something that was, “Hey, needs a little seasoning, but there’s a lot of potential here.” WEAVER: Yeah. They saw someone who was willing to literally run through walls and run through a burning building to make it work, and I almost literally did. I mean, it was that — we were — and not just me, but our whole team was really committed to try and make it work, and I think they saw that. RITHOLTZ: Quite interesting. (COMMERCIAL BREAK) RITHOLTZ: I have to talk a little bit about your growth rate. You began with $54 million. All-in, you’re $8 billion in assets totally. Obviously, a lot of that is not just growth, but new investors coming along. But still that’s a — as a PE company, Alpine has really seen quite a corporate growth trajectory. Tell us what led to this success rate. WEAVER: Yeah. So when the recession hit, we were in — we were not well positioned. We didn’t — RITHOLTZ: Now, when you say recession — WEAVER: Yeah. RITHOLTZ: — because some of our audience is, you know, older than 25, I’m assuming you mean, ’08. ’09, the financial crisis? WEAVER: ’08. ‘0. RITHOLTZ: Okay. WEAVER: Yes. RITHOLTZ: Not the one in 2020. WEAVER: Right. RITHOLTZ: And not the one that maybe happened sometime in 2022 and certainly not 2000. WEAVER: That’s right. RITHOLTZ: So the great financial crisis — WEAVER: So great financial crisis happens. We were — we invested the last dollar from our third fund two weeks before — two weeks before Lehman Brothers blew up. RITHOLTZ: Wow. WEAVER: And so we were out of money and we had — it took us forever to raise the next fund. But that period, where we didn’t have any money, turned out to be the most important period for us. RITHOLTZ: Why? WEAVER: Because we started deciding we were going to look at our own business, you know, kind of like rather than working in the business, we’re going to start working on our business. So I hired an executive coach — RITHOLTZ: Really? WEAVER: — and he helped — he really helped me kind of redefine the business that I truly was in, which I’ll come back to. We hired a consulting and coaching firm for our whole organization. And so, we really started doing some soul-searching for lack of a better word. And then — and from that, we really, you know, changed our strategy and developed kind of a new playbook. RITHOLTZ: So let me interrupt you there because that you raise something that I’m fascinated by. So first, what leads you to say, “We need a pro to come in and show us how to do this?” And second, how do you even go about finding an executive coach? That sounds like, man, that’s a consulting field fraught with, you know, let’s be polite and just say high risks. WEAVER: Yeah. It’s a great question. And I am a huge fan of executive coaching. I’ve had a coach since 2009. RITHOLTZ: Wow. WEAVER: I talk to a coach every week or every other week since ’09. RITHOLTZ: No kidding? WEAVER: And we, at Alpine, have 23 coaches that are part of our — they’re 1099 folks, but they’re part of our ecosystem that’s available to our people at Alpine and our executive. So I’m just a huge fan of coaching. And basically what I love about coaching is you create space away from the busyness of the day to day. You ask yourself a bunch of really important questions. You know, what do I want? What success look like? What do I want in — what does a five-year plan look like? And you actually have to really burn some energy and some thinking time, thinking about those answers, which are really hard answers, which most of us never spend time thinking about. RITHOLTZ: Was it just in the midst of the crash and recession that you said, “Hey, maybe we just need a little help. We’re not — we don’t have the professional background to run the business. We know the investing side, but the business side is something very different.” How did you get to that — WEAVER: Yeah, 100%. I mean, I think one of the benefits of phase planning in your first fund is that you get some humility. RITHOLTZ: Right. WEAVER: And you — I’ve always just been open to learning from people that are smarter and better than I am. And so, coaching was an exercise — back then in 2009, it was not very well known and it was definitely an exercise in humility of saying, “I think I need some help.” RITHOLTZ: That’s the old joke. Experience is what you get when you don’t get what you want, right? WEAVER: Yeah. Exactly. Yeah. RITHOLTZ: So once you make the decision, “Hey, we want to bring in a professional to show us ways to improve our business methods,” how does one go about finding a business coach? WEAVER: So I had an introduction from a friend and then we had a number of lunches, and his business wasn’t going well in ’09 either, as you could imagine, so — RITHOLTZ: Well, who’s on — and other than people doing distressed debt investing, whose business was going great in ’08? WEAVER: Yeah. Exactly. Nobody. So — RITHOLTZ: Then in short sellers, everybody else was in trouble. WEAVER: So we had this awesome conversation. I can still — it’s one of these conversations you can still remember where you are and what you — you know, exactly the moment. So we had — this is actually after I brought him on. We have this awesome conversation where I said, “Hey, I have to” — his name is JP Flaum, and I said, “Hey, I have to cancel our coaching engagement. I’m just too busy,” which was like we’ve already decided ahead of time that that was no go. I had to stick with the — we made an agreement. RITHOLTZ: Right. WEAVER: So he texts back immediately says, “No, we’re having it.” So I get on the phone, he says, “Well, what’s — you know what’s so crazy that you’re so stressed?” I said, “Oh, my God, JP, you know, I got to fly to Dallas and fix this. And then I got to — you know, we got to deal we’re about to lose and then we lost a huge customer in Chicago. And then I got to go to D.C.” and then, you know I’m going on and on. And he said, “Okay, well, let’s kind of slow down and chill out. Let’s talk about Dallas. What’s going on there?” “Well, we — you know, we just missed our bank projections a second time,” and I’m going on and on. And he starts saying, “Well, tell me about the CEO in Dallas.” I’m like, “What does that have to do with anything? You know, we’re in the middle of the Great Recession,” like, blah, blah, blah. You know, it’s not — you know, it’s the markets or whatever. Anyway, it comes to points, he says — well, eventually, he says, “Well, how would you — how would you rate that CEO, you know, A, B, C?” I was like, “Oh, he’s probably a B.” He said, “Well, Graham, in one of our engagements, you said you wanted to build the greatest private equity firm of all time. Are you going to — are you going to do that with a B CEO?” And I just — it like hit me between the eyes. And then he asked me another question, he said, “And Graham, if you’re someone who keeps a B CEO” — RITHOLTZ: What does that make you? WEAVER: — “how would you rate yourself as a CEO?” RITHOLTZ: Right. WEAVER: and I just — like, it stopped me dead in my tracks. And that was really this light bulb that went off, that ended up having us — having me realize I’m actually in the talent business. That’s the fundamental business that I’m really in. And that was like ’09 that we came to that realization, and then started completely redesigning our firm to like build our companies around talent, build our firm around talent, build our investment strategy around talent. So that was just a huge turning point. RITHOLTZ: So let’s talk about that because all of your investments eventually get a CEO that’s been trained at Alpine and has the benefit of all of this coaching, all of this training, all of this expertise. It’s not that you’re just looking for attractive balance sheets, it’s where can we put someone in charge to move the needle by taking our expertise and applying it to this business model. Is that what you mean by when you say, you’re in the talent business? WEAVER: Yeah. I think that’s what I mean. There are two parts of it. One is our investment strategy, which is what you described the others, how we run our own firm. But sticking with what you were talking about, Barry, the investment strategy, we found that the single most important investment decision we make is the management team. And it’s more important than the price we pay. It’s more important than the leverage levels. It’s more important than the prior growth rate. And so, we just said, “Well, if that’s really the most correlated, most effective, or most important criteria, you know, let’s make sure we get that right. And so let’s actually kind of build our own CEOs and put our own CEOs in so that we can make sure that we’re getting a world-class person to run each one of our companies.” RITHOLTZ: So in some ways, this is almost parallel in the public markets to activist investing, where they identify a very attractive business that isn’t quite living up to potential, right? WEAVER: Yeah. RITHOLTZ: And they say, “Hey, with a few management changes, we can turn this into a really good business.” On the private equity side, I’m assuming the conversation is something like, “We want to either buy 30%, 40% of your business or your entire business. But regardless, we want one of our professionals to come in and manage it.” WEAVER: Yeah, that’s right. A lot of the companies we’re buying don’t have management. You know, it might be a corporate carve-out. It might be a management team that wants to retire, or exit. And that’s great. So there’s never any conflict. We’re totally transparent. We’re not doing hostile deals, nothing like that. It’s always the transaction that the seller wants to do is they want to retire. So it’s always very friendly. But we — there aren’t a lot of private equity firms that want to go through the process of changing management because it’s very, very hard to do. RITHOLTZ: And that’s the value add that you guys bring. WEAVER: That’s a big part of it. Yeah. RITHOLTZ: Yeah. That’s really quite fascinating. So there’s a quote of yours I have to lead with, which I find really intriguing quote, “People create returns, not deals, not price.” That’s a huge statement, considering most of the analyst community, especially private equity, is so analytical and modern driven. You’re saying this is a people business. WEAVER: Yeah, 100%, Barry. I think that if you want to do something different than people, you have to have some fundamental belief that’s different than what other people believe. And our belief is that returns come from people. They come from talent. And I think maybe one of the reasons why people shy away from that is it’s hard to analyze, it doesn’t fit in a spreadsheet, and it’s incredibly hard to manage. It’s a lot easier to manage the hard numbers, the financial statements and things than it is to, you know, really manage a team of people. RITHOLTZ: So we were talking earlier that you appoint the CEO at these purchased businesses that you’ve trained yourself. Tell us a little bit about what that in-house training looks like. WEAVER: So a lot of the CEOs we’re hiring, we’re bringing right out of MBA programs, and they have five years of experience typically before they go into business school. And that could be anything, that could be they’re in the military. They could have been in consulting firm. They could have been in investment banking. And we have success with any of those — any and all those backgrounds. So — and they’ve just been in two years of business school, so we don’t want to put them back in business school. But what we’re really teaching them, the fundamental thing we’re teaching them is how to hire, how to build their team, how to set a vision, how to create priorities, how to get everyone in their organization excited and aligned behind what they’re trying to do. Those are things that not a lot of business schools teach. It’s one of the things I try to teach in my class, but it’s something that we bring in — it’s the biggest thing we bring in that training program that we do. RITHOLTZ: Hiring has been described as the most difficult aspect of building a company versus everything else. WEAVER: 100%. RITHOLTZ: How do you teach good hiring? WEAVER: You can actually, to some extent, make hiring a science. And the simple — I could talk for you — I could talk for three hours about this, but I’ll try to do it in about two minutes, which is you build a scorecard for what you want that role — in that role, a specific list of outcomes you want that role to do. And then as you’re assessing a candidate, you’re looking for very specific evidence that they’re going to be able to perform against that scorecard. And you have two things, you’re looking for attributes and experience. Those are the two different parts of the interview process. RITHOLTZ: But we all know what experience is. Define what attributes mean. WEAVER: So attribute is about who somebody is versus what they’ve done. So an example for us, when we’re hiring young people to become CEOs, we’re looking at, you know, do they have a will to win? Do they have emotional intelligence and self-awareness that they can get along with people? And then did they have grit? Can they — are they going to be able to see things through after getting kicked in the teeth, because they’re going to get kicked in the teeth. So those are the three attributes that we’re looking for. Those are wildly more important than experience, because they’ll get experienced quickly. And you can teach experience, you can’t teach those three things. You can’t teach, you know, the will to win. They’re kind of coming to us with that or not. RITHOLTZ: That’s an — that’s an intrinsic aspect of the personality. You either have it or you don’t. There’s no way you’re going to learn that. WEAVER: Not in a period of time, or we don’t know how to teach it if it is writable. RITHOLTZ: Right. WEAVER: Yeah. RITHOLTZ: Really, really interesting. So you mentioned your class, let’s talk about the management course that seems to be related to that, CEOs-in-Training. Tell us about that. WEAVER: Yeah. So the CEO-in-Training is the — that’s the name for the people that we’re hiring. Did you want to talk about that, or the class itself? RITHOLTZ: Both, either/or. WEAVER: Okay. All right. So the CEO-in-Training is the name we give to those people we’re hiring right out of business school. We’re giving them that experience — training that I mentioned, and then we’re putting them right in. A lot of them are CEOs on day one of add-on acquisitions, and they get the reins and they’re — you know, they’re off to the races. And you know, there aren’t a lot of positions out of business school that you can become a CEO within — you know, right when you graduate. So we’re — we’ve designed that and it’s been — it’s been a homerun. We — I underestimated how amazing these students would do and the roles that they’ve done. And it’s been fantastic. RITHOLTZ: Do you end up hiring people right out of your classes or — WEAVER: Yeah. I mean, I don’t — RITHOLTZ: So this is really devious recruitment. WEAVER: I don’t interview anybody from Stanford, period. I don’t even know if they applied. I keep a wall between — RITHOLTZ: Right. WEAVER: — you know, my teaching and recruiting. But I will say probably teaching there has helped the Alpine brand. RITHOLTZ: Sure. WEAVER: And helped me — and more importantly, helped me understand what students are capable of, which is a lot, and what they want, which is they want to be the boss right away. And I think — so it’s helped — it helped me learn a little bit more about how to build a program that the students want to actually do. RITHOLTZ: So one of the things the CIT program does is to try and increase underrepresented individuals in PE. Tell us a little bit about what diversity does for your business. WEAVER: Yeah. Well, it’s awesome what we can do. If you — the great thing about hiring for attributes over experience is that we can actually have a huge impact on diversity. So for example, if I said we’re hiring a CEO to run a healthcare software business and our criteria is they have to have done it for 20 years. RITHOLTZ: Right. WEAVER: Then I’m — that battle has been won or lost 20 years ago. RITHOLTZ: Right. WEAVER: Yeah. I could hire someone who’s a diverse candidate from one of my competitors, but I haven’t really created any value. If I hire someone right out of business school, let’s just use women as an example and that woman wouldn’t have necessarily seen a path to become a CEO, and I can provide her a clear path, then I can actually increase the number of women that become CEOs, which is exactly what we’ve done. We have over 50% of our CEOs-in-Training that we’ve hired have been women. About 30% to 35% have been underrepresented minorities. And so we have — we can have a — we can really move the dial on creating more diversity in CEO ranks. RITHOLTZ: That’s really kind of interesting. Let’s talk a little bit about software and services, why focus on those areas in particular? WEAVER: So one of the things that we figured out, which probably took us way too long to figure out, is if you buy recurring revenue, there’s just a lot fewer things that go wrong. So we’re not unique in focusing on recurring revenue, but that we turn the dial in around that Great Recession time, and decided that was all we were going to do. RITHOLTZ: And so it’s less focused on winning that one big sale and it’s more about building a business that has a fairly steady revenue stream? WEAVER: That’s right. And then if you marry that with what I was saying before, about putting young people to run them, recurring revenue is really helpful because in the first year, they have a big learning curve. And you — RITHOLTZ: Right. WEAVER: You know, they — we need them to have a little bit of a cushion for them to get up to speed. So recurring revenue helps a ton because it does take a little while to learn how to be a CEO. RITHOLTZ: That’s really interesting. Software obviously has been really hot over the past couple of years. Any chance that that changes or slows down, or is software just the driver of the future? WEAVER: I mean, I think software is the driver of the future. And I think anything, even the driver of the future can get overpriced. RITHOLTZ: Sure. WEAVER: And you can overpay for any asset. And I think in the last few years, you know, people have gotten a little ahead of themselves with some of the multiples that were paid. But I don’t think that changes fundamentally that I think software — you know, software is here for a long time and it’s got a lot of really exciting trends. (COMMERCIAL BREAK) RITHOLTZ: I’m going to ask you a question. I’m going to have you put this back earlier in the hiring discussion because I missed something and I want to come back to it. You’ve discussed episodic versus programmatic hiring. Explain the difference between the two. WEAVER: Yeah, great question. So I might have made up those two terms, but — RITHOLTZ: Well, that’s why it jumped out at me. I don’t know what either those things are. I have to ask that question. WEAVER: I think I did make them up, but — so episodic hiring is what everyone does. Okay. We need a — RITHOLTZ: We have an opening. WEAVER: Yeah. RITHOLTZ: Fill this — go to LinkedIn — WEAVER: Exactly. RITHOLTZ: — put out an ad, get me somebody here. WEAVER: Exactly. Or yeah, we’ll hire Russell Reynolds to get us a CFO, whatever. That’s how everyone hires. That is two problems — well, a number of problems. One is it’s slow, and two is it’s expensive. And three is it actually doesn’t even work that well. Like, the hit rate is pretty low. The hit rate across the board in hiring statistically is about 50%, but that’s measured as are they still there in three years? Not this they — were they successful? So it’s even worse than that. So that’s the problem with episodic hiring. So programmatic hiring is you’re going to hire the same role a lot, and so how do you make that more of a program? So for example, you know, we’re hiring 17 people from business schools that start next month, or we’re hiring 27 undergrads to be interns who will matriculate into full time roles. And so, there’s a group of people that are graduating. You can kind of have a class of folks. You can give them way more training. You can build a whole program using the — to use the programmatic term around that, and it’s just a lot more effective. That’s two roles that we do at Alpine, the CEOs-in-Training and then the analysts. But then in our companies, you know, in some cases, that’s engineers, technicians, where that’s their recurring hire that they’re doing. And we’re helping them build programs to start with people who don’t know how to do those functions, and bring them up, you know, through training to learn those. RITHOLTZ: Really quite interesting. WEAVER: And you can scale — you can just scale a lot better, and you have a way higher hit rate doing that. RITHOLTZ: So you’re constantly maintaining a pool of either potential hires or actual employees that you’re waiting to promote? WEAVER: Absolutely. Yeah. RITHOLTZ: Before we get into the current market environment for private equity, I have to circle back to you teaching at Stanford, at the graduate school, tell us a little bit about the courses you teach and what students learn. WEAVER: So I teach two courses there. I teach — they’re both — they’re both basically similar. One is for first years, and one is for second years, but they’re both centered around entrepreneurship. And the idea of the courses is that there’s lots of classes on analysis and accounting and finance; and there aren’t a lot of classes around how to actually manage people, lead people. And I’m talking the nitty-gritty stuff of literally like what to say, if you have to fire someone. My students have to rule — my students will say, “Oh, I would just fire that person.” I said, “Okay, great. I’ll be them and you tell me.” RITHOLTZ: Right. Fire me. WEAVER: Fire me, and then they have to do it and they realize — RITHOLTZ: It’s harder than it looks. WEAVER: It’s a lot harder than it looks. So they’ll say — RITHOLTZ: That’s why people just cheat and send email. He’s so mortified. WEAVER: Yeah. That would not be something we teach. We do not — we not teach people to send an email. RITHOLTZ: So tell us about the role-playing. What does that — WEAVER: So we — so the student will actually play the protagonist in the case, and I’ll play the antagonist for lack of a better word of the other characters. And then they’ll fire me, or they’ll have to demote me, or they’ll have to tell me that they no longer want to be my partner, or whatever the situation is that they’re trying to get through. And then we’ll play around with it. And they’ll realize, you know, some things they do right, some things they do poorly. And then the entrepreneur about whom we’ve written the case is in the class, and so then they’ll chime in and say, “Well, wow, this is — you did this this way, this is why I didn’t do that,” or “I wish I would have done it that way. Instead, I did this.” So it’s a really — it’s a really, really fun class. It’s — and it’s something that they don’t get anywhere else where they actually have to kind of implement the stuff they’re talking about. RITHOLTZ: So aside from firing, what else do you teach them? WEAVER: So everything, we actually teach a lot on hiring. We have whole modules and playbooks and videos and things I’ve made and we do a class on that, which is really important. We talk about complex partnership issues, things with your board. They have to sell stuff. They have to fundraise, how to make an offense and defense deck to sell — to sell something, you know, a whole list of basically things that entrepreneurs are going to have to face in their life. RITHOLTZ: Really intriguing. I have to imagine having been a graduate student at Stanford, it’s deeply satisfying teaching there. WEAVER: It’s a blast. I started off as a case guest, where they wrote a case about me buying stuff in my dorm room, and I was a case guest and I kept — I would come home all energized. And it was my favorite day of the year. And then when the — Irv Grousbeck, who wrote the case about me, who’s a legend at Stanford, when he — he called me one day and said, “Hey, you know, I’m going to stop teaching this class, would you want to teach in?” And my first response was, “No, I have a job, you know, and I can’t,” but I didn’t say that. I said, “Hey, I’ll think about it.” And then, thankfully, everyone I was around was like, “Graham, you have to do this. And it’s your favorite thing you do.” And we figured out a way to make it work. So it’s a blast. RITHOLTZ: That sounds like — that sounds like it’s a lot of fun. WEAVER: One more thing I would just add is what I realized after a few years is I’ll teach students all about entrepreneurship, and we have this great class. And then they go take a job, you know, in consulting or investment banking; they never become entrepreneurs, even though that was what they wrote their essay about and that was what they’re excited about. So I added to the class a whole part on, okay, wait a second, what is it you really want to do with your life? You know, what’s holding you back? How’d you make a plan to go do that? What are your limiting beliefs? What are the things — what are your fears? So we have a whole thread, probably 25% of the class is on those things because I’m like what’s the point of teaching people to be entrepreneurs if they don’t become entrepreneurs? RITHOLTZ: Right. WEAVER: So I’ve invested a lot into, like, personal growth. And that’s a really, really fun part of us, too. RITHOLTZ: Are any of those skill sets transferable to consultants who arguably — WEAVER: Oh, 100%, a 100%. RITHOLTZ: — they’ll be working with other entrepreneurs and maybe haven’t been exposed? WEAVER: Yeah, a 100%. It wasn’t so much that I have anything against consulting, it was just that the student at the beginning of the class said, “My goal is to do X, and then they don’t do X.” That was all. RITHOLTZ: So tell us a little bit about your approach, what’s your process like to finding a potential acquisition target. And since we look at both private and public markets, what do you think of in terms of valuation? How do you come up with a number? WEAVER: Yeah. Yeah, great questions. We have a large team that looks for potential companies. We have actually 52 people at Alpine and in our portfolio companies that are looking for deals. RITHOLTZ: 52? WEAVER: 52. RITHOLTZ: So that’s a lot of people. WEAVER: Yeah. RITHOLTZ: How big is the firm overall? WEAVER: Overall, if you include the CEOs-in-Training and we have — RITHOLTZ: And your 1099 consultants. WEAVER: We probably have roughly 200. RITHOLTZ: All right, so that’s a — WEAVER: Yeah. RITHOLTZ: That’s a decent size. WEAVER: The 52 also includes a number of people that are working at the company who’s doing sourcing, but they’re doing the same thing. They’re calling companies, looking for investments. So we have 52 people looking for deals, and then a lot of those conversations are directly with founders. And what we’re trying to do is figure out — the way we think about it is we can pay a price, that we can hit our target returns, which I can’t talk about on, you know — RITHOLTZ: Right. WEAVER: But if we can hit our target — RITHOLTZ: We all have compliance departments. WEAVER: So we can pay a price so we could hit our target returns with like a 70% base case. And then we need there to be a lot more upside to that than downside. So we want there to be like a case where we could hit many multiples of our target returns. And so based on that, we kind of back into a price. And then where we get in trouble or where things get turned down at Investment Committee is when everything in the world has to go perfectly to hit that target. RITHOLTZ: Right. WEAVER: Because I’ve been in this business for 28 years, and when you start pricing in perfection, that’s a time when you realize you’re overpaying. RITHOLTZ: Right. WEAVER: So that’s — it’s that 70% probability and less a margin of safety thing that you really — as someone who’s like a little bit more senior at our firm, I have to bring that to the discussions. RITHOLTZ: Yeah. That perfect 10 stuck at landing, those are the outliers. You certainly can’t rely on that. WEAVER: Exactly. You can’t underwrite to that, for sure. RITHOLTZ: Yeah. So when you look at this macro environment, it seems to be pretty supportive of economic expansion generally. How closely do you pay attention to things like, hey, the Fed is raising rates pretty rapidly, maybe they’re going to cause a recession next year? WEAVER: We pay attention to it to some extent. If you go back to the ’08 crisis — RITHOLTZ: Now, that’s a recession. WEAVER: Yeah. And we’re just in a very different position. I think we’re way underbuilt on housing. So you know, I don’t see — RITHOLTZ: Wildly. WEAVER: Wildly underbuilt on housing, so I don’t see — you know, I don’t see things happen — you know, crashing there. I think we have — the consumer isn’t as leveraged as they were back in 2008. Businesses aren’t as leveraged as they were. I just think it’s a lot healthier. On the flip side, we also don’t have — the Fed can’t print money like they did in ’08 because of inflation. But I think, generally, it just feels like we’re a lot healthier than we were back then. RITHOLTZ: Right. You’re singing my song. I’m in the exact same place. I’m kind of perplexed by all the recession chatter. I mean, what are we? 27, 28 million new jobs in this year? That’s not what you usually see. Although, to be fair, some past recessions, we were creating jobs right until the moment it stopped and the bottom dropped out. But you know, it really depends on how aggressive the powers that you’re going to get about inflation. So here’s the question related to that in ’08, ’09, let’s say the naysayers are right and the end of this year or 2023, we see something more than just a mild shallow recession, we see a real recession. How does that affect the companies you look at? And do you start doing, for lack of a better phrase, distressed private equity investing? WEAVER: You know, I think that what we’ve been trying to do over the last 14 years is underwrite companies that would do well in a recession. So hopefully, we’re going to — our company is going to hold up well in that time. In terms of what we look for, it does open up the door when — you know, when there is a recession, there’s a lot more different things that are for sale at different prices. And I think one of the great assets is if you have a whole team of managers that you can put in to run distressed things, you have a lot of options open to what you can look at. So there — you know, there will be a lot more interesting things to do with, you know, if that happens. Certainly, we don’t wish that on the economy. RITHOLTZ: On anybody else. And then, finally, I have to ask about the way you score software companies and services companies, you use a metric. I really am not familiar with eNPS. Can you tell us a little bit about that? WEAVER: Yeah. So I think in general, that there are leading indicators and lagging indicators. Lagging indicator is revenue EBITDA. Those are lagging indicators. But yet, a lot of managers, they try to manage to lagging indicators. It’s like — and that’s just not very effective. So what we try to do is develop what are the leading indicators that are going to predict success. And the number one most important leading indicator, you’re not going to be surprised to hear me say, is talent. So if you tell me, “I’m on the board of your business, and we’re starting to build the world-class management team, I can tell you in two years, we’ll have a homerun investment.” So one of those leading — two of those leading indicators related to talent are employee net promoter score, which is the eNPS. RITHOLTZ: Meaning how employees rate their employee? WEAVER: Exactly. Yeah. Would they — would they recommend this company to a friend? And we measure that every quarter for every one of our companies. We measure it at Alpine. We measure it for a whole bunch of different groups within Alpine. And then retention is the other big one. So if we can be managing those and getting those right, those are leading indicators that are going to help us set up, you know, the revenue EBITDA that come later. And those are hard things to manage. Getting those metrics right takes a lot of work. That’s actually where I spend most of my time at Alpine, believe it or not, is making sure that we’re creating an environment where the best people want to be and stay. And most people again in the finance world, they don’t think about kind of squishy, soft metrics like that, but they should be. RITHOLTZ: Well, because they have a really outsized impact on the performance of a company. WEAVER: Absolutely. That’s my view is they have — they have the biggest impact. RITHOLTZ: And my last question before I get to our favorite questions we ask all our guests, so a little bit of a curveball, you are a captain on a national championship rowing team. WEAVER: I was. Yeah. RITHOLTZ: Tell us about that. WEAVER: So — RITHOLTZ: You look like you row. WEAVER: So I came to college not even knowing anything about rowing. I didn’t even know that the boats went backwards till I got in a boat. RITHOLTZ: Well, it’s not that they’re going backwards. It’s just that you’re facing backwards. WEAVER: Exactly. Yeah. I didn’t even know that. So I started as a novice, I walked on the team. And it seemed like everyone else on the team had rowed before, so I was horrible, absolutely horrible. I got cut, and then just kept kind of — and so there’s a funny story where the coach says, “Okay, these are the people who are going to boats. The rest of you are, quote, “land warriors.” And you’re a land warrior means you go on the rowing machines. And so that night when he kind of posted the boats and I wasn’t in the boat, he said, “All right.” So I did this calculus, and I’m like, okay, well, gosh, all the land warriors are going to show up before class. You know, classes — first class is at 9:00. So they’re going to show up at 8:00, but — so I got to show up at 7:00. No, no, no, everyone is going to think that, so I’ll show up at 6:00. So I show up the next morning, zero people. And one of the guys is like, “Hey, idiot, land warrior is another way to say you got cut.” But I still stayed as a land warrior, and kept getting better at — getting my Erg times better and better over time. And it was one of the greatest things I ever did. I had a great time and — RITHOLTZ: And when were they national champions? WEAVER: My senior year, I was — RITHOLTZ: So by then, you’re on the team? WEAVER: By my — yeah, by my senior year, I was pulling one of the best Erg times in the nation at the rowing machine — RITHOLTZ: Erg time? WEAVER: On the concept to rowing machine like you see in the gym, they actually have a standard test, which is 2000 meters which you submit, you know, nationally. And by my senior year, I had one of and maybe a few times the number one Erg time in the country, and I was elected captain by my teammates of our team. And then that year, we were supposed to have a rebuilding year because we lost all these seniors and we actually won the whole thing. RITHOLTZ: That’s amazing. WEAVER: So it was awesome. RITHOLTZ: Wow. That’s really amazing. (COMMERCIAL BREAK) RITHOLTZ: Let’s jump to our favorite questions that we ask all of our guests, starting with what kept you entertained during the pandemic lockdown? Tell us what you were streaming. WEAVER: I went on this whole Buddhist thing during the pandemic and I started reading a lot about Buddhism and streaming Buddhism, and it was — it was amazing. RITHOLTZ: Meditating or — WEAVER: Meditating and just kind of learning about Buddhism, and you know, why we all suffer and how to — you know, how all these thoughts we have in our head, our own imagination. And I went on this whole kick during the pandemic, which was phenomenal. I highly recommend it. And basically, the concept is that your reality is going through a filter. And everything that’s happened externally, you’re telling yourself a story about what that means, and whether that’s good, or whether that’s bad. And that that’s really — your reality isn’t what’s happening, it’s the story you’re telling yourself and that you have complete control over that story. RITHOLTZ: Right. That’s the classic narrative fallacy. WEAVER: Yeah, that’s the narrative fallacy. And that’s kind of the fundamental premise of Buddhism, which is your suffering is coming, not from what’s happening, but the story you’re telling yourself. So I went on this long, you know, meditating and reading, and kind of journaling about that. And that was — that was a lot of fun. RITHOLTZ: So the — we had this old joke about, we had a softball team here over in Central Park and we had the Buddhists playing the stoics and the game never finished. Everybody just sat down instead of having a long conversation. But I’m right there with you. You mentioned your — two of your mentors, who were some of your earliest investors. Are there anybody else you want to mention as mentors? The professor at Stanford you referred to also. WEAVER: Yeah. I’ll — both of those, Tom Steyer. Doug Martin and Irv Grousbeck were super important in my life. I’ll talk about Irv. He is probably if you had — there’s probably literally, Barry, a hundred people you could have on this podcast that would list Irv as one of their most important people. RITHOLTZ: Really? WEAVER: Yeah. RITHOLTZ: Wow. WEAVER: He a professor at Stanford and just, you know, makes time for folks. He built an incredible business. And he just has this, you know, unwavering moral code. He was an early investor. He’s the one who asked me to teach at Stanford. And I just — I just find the way he set up his life and his — just the way he treats other people, you’re always the most important person in the world when you’re with him. And so, I’ve definitely learned a lot from him. RITHOLTZ: Really interesting. Let’s talk about books. What are some of your favorites and what are you reading currently? WEAVER: I — it’s funny, I ended up rereading like the same 10 books. In terms of my favorites, I read — I have some I read currently too, but “Good to Great,” Warren Buffett’s Biography “Snowball,” Steve Jobs biography by Isaacson, Walt Disney’s biography by Neal Gabler, “Switch” by Dan and Chip Heath, “Made to Stick” by Dan and Chip Heath, Buffett’s annual letters. Like, those are like — I reread those and every time I reread them, I get kind of reenergized. And we’ve modeled a lot of our business and a lot of my life around some of the things I learned in some of those books. And a lot of those required reading and help. RITHOLTZ: I can imagine. What are you reading currently? WEAVER: And right now, I started getting on this Brene Brown kick. I don’t know if you’ve read some of her stuff, but “The Gifts of Imperfection” I’m reading right now, which is just phenomenal. She is — I actually downloaded it on Audible so I get to hear her talk about it. But she has just this incredible way of talking about things that other people don’t talk about, like shame and how to — how to deal with the things you’re not good at, and how to be intellectually honest and admit when you don’t know things. And she’s — I love her work. RITHOLTZ: What’s the title of the book you’re reading currently? WEAVER: “The Gift of Imperfection.” RITHOLTZ: It sounds really — WEAVER: Yeah, it’s phenomenal. It’s phenomenal. RITHOLTZ: Before I forget, just as an aside and you could edit this out. So I went to law school with a guy named Lawrence Cunningham, who was the first person who recognized, hey, all these letters from Warren Buffett, they’re really fascinating, deep stuff. He bound them. WEAVER: Yeah. I bought that book. I own that book. RITHOLTZ: That book has been like a perennial bestseller. WEAVER: Yeah. RITHOLTZ: And it’s — you know, the old joke about the two economists walking down the street. One says, “Is that a $100 bill on the floor?” And the other says, “No, if it was a $100 bill, someone would have picked it up.” It’s the same theme with that. WEAVER: He picked it up. Yeah. RITHOLTZ: These have been around for literally — WEAVER: Yeah. RITHOLTZ: I mean, I think he first started in like ‘90 or ‘92, something like that. And Buffett had been around for 30 years by then already, or 25 years, nobody had thought of doing that. WEAVER: And you know what, like, it doesn’t matter if it’s crypto or software valuations or the Internet. The stuff Buffett writes about is still the right stuff. RITHOLTZ: Fundamental common sense, block and tackling. WEAVER: You’re going to discount the cash flows back and decide what you can pay. You’re going to put a premium on the discount rate if the stuff is a lot more uncertain. It’s this — it is exactly the right formula today and it was 50 years ago, and it will be 50 years from now. And anytime that there’s something new, where people says this time, it’s different, you should be really skeptical. RITHOLTZ: Always. All right. Our final two questions, what sort of advice would you give to a recent college or business school graduate interested in a career in private equity? WEAVER: Well, I’ll start with the first part, just general advice, and then I’ll go the private equity. But, you know, as you can imagine, I actually give this advice all the time teaching. But the first thing that I think a lot of people graduating don’t ask is like, what they — what do I want? What is five years from now, 10 years from now, if I could — if I knew I wasn’t going to fail, what would I want to do with my life? And they can start with that question. And then start working backwards from that about what job you should take now and next year and five years from now. Instead, a lot of people just think, “Oh, these firms are interviewing on campus, and I’ll go here, I’ll go here.” And that’s okay. But if you know where you want to be 10 years from now, it will inform which firm you go to work and what skills you’re trying to acquire. So I think — I think that would be my advice is like, in 10 years, you will — you can do almost anything you set your mind to and so give yourself permission to really answer that question, what do I want to do in 10 years? RITHOLTZ: Why does it matter if you quote, “know you wouldn’t fail?” WEAVER: Yeah. RITHOLTZ: Just to open the set of possibilities or — WEAVER: Because — yeah, I always frame it as if you knew you wouldn’t fail, what would you do? Because without that, people already jumped to, “I can’t do this,” like subconsciously in the mind. RITHOLTZ: Fear of failure, is that big really? WEAVER: Fear of failure is so powerful. RITHOLTZ: Even amongst really high performing talent — WEAVER: I think it’s even — RITHOLTZ: I mean, Stanford graduate students, I have to think that’s the cream of the crop out there. WEAVER: In some ways, it’s almost more prevalent because they have had so much success, and they don’t — you know, they have this incredible track record. But I would say the number one thing that Stanford Business School students or really just about anyone in the world, it’s the same thing, which is their subconscious mind defaults to fear and fear of failure. RITHOLTZ: That’s fascinating because when I have discussions like this with colleagues or friends in Europe, the thing — or even Asia, the thing that makes United States so unique in the developed economy world is that failure isn’t a scarlet letter, especially in Silicon Valley. It’s almost a badge of honor. Look at all the VCs that list all, “Hey, we missed Apple and Cisco. We invested money in Pets.com. Look how terrible we are, except for our 40% compounded returns.” It’s a badge of honor to say, “We tried this face planted, brush yourself off and moved on.” WEAVER: But when you’re starting out your career and you don’t have anything to fall back on, and you haven’t yet had the success that you can look back, it’s really scary for people. And the thing that they miss is they underestimate what they could really do in 10 years and they underestimate themselves. They forgot what got them in that seat at Stanford Business School. RITHOLTZ: Sure. WEAVER: And they compare themselves to, you know, their roommate or their classmate or something. RITHOLTZ: So the other half of the question is advice about private equity. WEAVER: Yeah. I would say — I would say if someone is interested in a career in private equity, I would — I would say all private equity is not created equal. And there are — literally, like probably a thousand different models, and figure out, you know, go talk to a bunch of companies that are doing private equity in a whole bunch of different ways, and figure out what resonates with you and your interests and your superpowers, and where are you going to line up because it’s, it’s a very diverse industry. And you know, there are some firms that are making their money based on, you know, hardcore fundamental analysis. You know, we’re making our money on talent. There’s others that are, you know, doing cost cutting. There’s a whole bunch of different ways and one or more of those is going to line up a lot better with what you’re excited about. RITHOLTZ: And our final question, what do you know about the world of software services in private equity today that you wish you knew 28 years or so ago, when you were first getting started? WEAVER: Well, two things. The first thing is I wish I knew that it was going to work out fine. So I was so stressed and I put so much pressure on myself, that I wish — if I could go back and tell myself anything, it would be like, “Hey, Graham, you know, it’s going to be okay,” because I went through a lot. RITHOLTZ: That’s a really — that’s a really interesting answer because, you know, we just don’t realize how much we freak ourselves out and very often, unnecessarily. What’s the second thing? WEAVER: The second thing would be I would — if I could have realized earlier on just how important the world of talent is, and how that was really the thing that drove performance because that that would have saved me a decade. RITHOLTZ: It sounds really like you’ve honed in on exactly what makes your business work and really quite fascinating. Graham, thank you for being so generous with your time. We have been speaking with Graham Weaver, founder and partner at Alpine Investors. If you enjoyed this conversation, well, be sure to check out any of our previous 400 discussions that we’ve had over the past eight and a half years. You can find those at iTunes, Spotify, wherever you feed your podcast fix. We love your comments, feedback and suggestions. Write to us at mibpodcast@bloomberg.net. Sign up for my daily reading list @ritholtz.com You can follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Robert Bragg is my audio engineer. Atika Valbrun is my project manager. Sean Russo runs all of our research. Paris Wald is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Graham Weaver appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureJul 26th, 2022

Student-loan forgiveness is "clearly important" to Biden, the White House says — but there"s no timeline for when it might happen

The White House previously said Biden wants to cancel student debt before payments resume at the end of August. Now, that's uncertain. White House press secretary Karine Jean-Pierre answers questions during the daily briefing at the White House June 13, 2022 in Washington, DC.Win McNamee/Getty Images White House Press Sec. Karine Jean-Pierre said student-loan forgiveness is "clearly important" to Biden. But she added she does not have a timeline for when it might happen. Prior reports suggested the relief would be implemented before payments resume in September. Millions of borrowers are waiting for President Joe Biden to cancel some of their federal debt, which was expected to happen before the pause on student-loan payments expires after August 31. But with that date just 43 days away, White House Press Secretary Karine Jean-Pierre suggested there still might be uncertainty on providing that relief."I dont have a timeline for you," Jean-Pierre responded to a reporter asking for an update on debt cancellation on Tuesday. "I know this is a question that comes up often in the briefing room. This is something that is clearly important to the president and as soon as we have anything to preview we will make sure that happens."Recent reports have suggested Biden is considering $10,000 in loan forgiveness for federal borrowers making under $150,000 a year, an announcement likely to be made in July or August, closer to when the payment pause expires. But it's a decision borrowers have been waiting a lot longer than just months for — Biden pledged on the campaign trail to cancel $10,000 in student debt. In April, he said he would make that decision "in the next couple of weeks."It's unclear what exactly the hold-up might be, given that canceling the debt doesn't require Congress' participation and it's something Biden can do on his own by signing an executive order. He has previously expressed concerns that any debt relief might go to people who don't need it, like students who attended Ivy League schools, which is likely why he's reportedly considering an income cap on any forgiveness. As Insider previously reported, placing thresholds on relief will be a significant administrative burden that the Education Department likely cannot carry out on its own.Additionally, Republican lawmakers have frequently slammed the idea of broad relief, partly because they said it would exacerbate the already-high levels of inflation in the country by putting more money back in consumers' pockets. Some of Biden's advisers appear to be concerned about that, as well. Jared Bernstein, a member of the White House Council of Economic Advisers, previously told The New York Times, "The key economic fact here is that if debt payment restart and debt relief were to occur at roughly the same time, the net inflationary effect should be neutral." But lawmakers and advocates have concerns with the Education Department's ability to cancel student debt and resume payments in such a short time-frame. Both Republican and Democratic lawmakers sent letters to the department last month asking for details on the department's preparedness to effectively execute those actions, and advocates have stressed that even if student debt is canceled this summer, the pause needs to be extended to ensure every eligible borrower gets relief before they have to make payments again."We strongly urge your administration not to threaten the financial security of people with student debt as a tactic to fight inflation," 180 groups wrote to Biden. "Instead our organizations urge you to enact robust student debt cancellation that is not means tested and does not require an opt-in for participation and to fully implement this policy before any student-loan bill comes due."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 20th, 2022

DEBT DIARIES: 26 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with more than two dozen student-loan borrowers eagerly awaiting Biden's expected announcement on debt forgiveness. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden extended the pause for a fourth time, through August 31, citing uncertainty with the pandemic. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Now, Biden is reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and that announcement is likely to happen in July or August, closer to when payments are set to resume. But that relief could leave some borrowers out, like parents and graduate students, and the amount will not make a huge difference to those with much larger debt loads.Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.A 61-year-old student-loan borrower chooses between paying her debt and paying for health insurance — and Biden's forgiveness plans won't helpMarianne Ayala/InsiderRobin O'Brien, 61,  could not foresee the pandemic when she took out student loans to go to graduate school. There's no way she could have anticipated contracting COVID-19, and the medical bills that came along with it.Now, as Biden gets closer to making a decision on broad student-loan forgiveness, O'Brien is also forced to make a decision: paying her medical bills or her $64,000 student loan bills — and she knows she cannot afford both. She's disappointed graduate students are not being considered in Biden's relief plans.Read the full story here. A single mom who took on $187,000 in student debt for her kids wishes Biden would consider parents in his loan-forgiveness plans: 'I just don't feel like it's fair that we're overlooked'Marianne Ayala/InsiderAdria Mansfield, 43, has $187,000 in student debt she took out for her kids' education because it was the only way she could afford to give them the futures they wanted. But while Mansfield is among the three million families with parent PLUS loans, it's unclear whether they will be included in Biden's loan forgiveness plans. Mansfield wishes people like her were part of the conversation."Half of our children would not be able to go to school and become successful if it weren't for the parents," Mansfield said "And I just don't feel like it's fair that we're overlooked."Read the full story here. Meet a 37-year-old with $108,100 in student debt who lives in a school bus because rent is unaffordable: 'Student-loan debt is by far my biggest regret'Marianne Ayala/InsiderNick Crocker found a way to counter spiking rent costs in the country: moving into a school bus. But that doesn't mean he's able to pay off his $108,000 student debt load. Graduating into the 2008 recession, Crocker wasn't able to find a job in his field of study, pushing him to fall behind on his private student loan payments. Now, he's not sure when he'll ever be able to get out from under the debt.Read the full story here. Read the original article on Business Insider.....»»

Category: personnelSource: nytJul 6th, 2022

Student-loan payments resume in 2 months as Biden nears a decision on federal debt cancellation

Advocates are pushing Biden to cancel student debt and extend the payment pause, as the GOP slams his looming plan for broad loan forgiveness. US President Joe Biden looks on prior to a signing ceremony in the East Room of the White House in Washington, DC, on May 25, 2022.JIM WATSON/AFP via Getty Images Student-loan payments are set to resume in two months, after August 31. Before the resumption, Biden is expected to cancel some student debt for many federal borrowers. Advocates want a pause extension to ensure cancellation is fully implemented before payments resume.  Federal student-loan borrowers have two more months of relief before they are hit with another monthly bill.President Joe Biden's fourth extension of the student-loan payment pause, through August 31, was intended to give borrowers a break amid the pandemic and soaring inflation. With that deadline just 60 days away, the administration has not given a firm indication of another extension of that pause — and it's looking more likely that broad student-loan forgiveness will happen first.Recent reports indicated Biden is considering $10,000 in relief for federal borrowers making under $150,000 a year, and while that amount has not been confirmed by the White House, the president is expected to announce his final decision in July or August, prior to the payment resumption. But some advocates are worried payments will resume before debt cancellation is fully implemented."A hasty restart of payments now, in this time of rising costs, and while thousands are still waiting for their loan forgiveness applications to be processed, would be devastating," American Federation of Teachers President Randi Weingarten said in a statement. "This is no time to shift the burden of a broken student loan system onto the backs of working people."If the debt cancellation is subject to income thresholds, it's likely the borrowers will have to take some action on their part, either by applying for the relief themselves or filling out paperwork to verify their incomes, and as Insider previously reported, it could be a burdensome task in which simple errors could easily be made, blocking debt cancellation from those who need it the most. Lawmakers on both sides of the aisle have also expressed concerns with the lack of information surrounding both a possible payment pause extension, and Biden's nearing decision on broad loan forgiveness. Top Republican on the House education committee Virginia Foxx wrote a letter to Education Secretary Miguel Cardona requesting additional information on any forthcoming relief plans, and how the department is planning to carry them out. "You said you are ready to act on student loan forgiveness, but you can only be ready if you know the plan; therefore, please describe, what is this plan?" Foxx wrote.Minnesota Rep. Ilhan Omar later led dozens of her Democratic colleagues in sending a similar letter to Cardona to ensure "ability to deliver debt cancellation quickly and efficiently, no matter the effort and resources required."The most the public knows now is that a payment pause extension could, or could not, happen. Cardona told lawmakers in June that "it could be that it's extended.""Or it could be that it starts there," he said. "But what I will say is that our borrowers will have ample notice. And we'll communicate that with you as well."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 1st, 2022

Biden"s Education Department has wiped out $8.1 billion in student debt for 145,000 borrowers following reforms to a loan forgiveness program

Biden made it easier to qualify for the Public Service Loan Forgiveness program — but student-loan borrowers have until Oct. 31 to use those benefits. President Joe Biden motions while boarding Air Force One at Los Angeles International Airport after attending the Summit of the Americas in Los Angeles, Calif., on June 11, 2022.AP Photo/Evan Vucci Biden implemented reforms to the Public Service Loan Forgiveness program last year. As of June 1, 145,000 borrowers have gotten $8.1 billion in relief under the reforms. A limited-time waiver through Oct. 31 allows previously ineligible payments to qualify for the program. More and more student-loan borrowers are getting relief through a debt forgiveness program for public service workers.On Friday, President Joe Biden's Education Department released the latest data on progress made under the Public Service Loan Forgiveness (PSLF) program, which is intended to forgive student debt for public servants, like nonprofit and government workers, after ten years of qualifying payments. In October of last year, the department implemented a series of reforms, included a waiver that is running through October 31, 2022, that allows borrowers to count payments from any repayment plans toward loan forgiveness through PSLF, including programs and plans that were not previously eligible.As of June 1, the department has approved $8.1 billion in relief for nearly 145,000 borrowers under that waiver. The department noted that some of those borrowers have already received relief while it is on the way for others who have not.When the waiver was announced last year, the department said it would bring 550,000 borrowers closer to student-debt relief automatically — and other changes included making PSLF easier to access for Americans serving in the military and improving outreach to those who might be eligible for the program.Biden is also in the process of making a decision on loan forgiveness for all federal borrowers — he is reportedly considering $10,000 in relief for those making under $150,000 a year and will likely announce the plan in July or August, closer to when payments are set to resume after August 31.While the Education Department has touted progress made under PSLF, some advocates and lawmakers worry that the waiver is expiring too soon. A recent analysis from advocacy group Student Borrower Protection Center found that while 9 million public servants are eligible for student-loan forgiveness, only 2% of them have actually gotten their debt wiped out — and fewer than 15% have filed paperwork to track their PSLF progress.As a result of years of flaws and a high PSLF denial rate, some lawmakers have introduced legislation to permanently simplify the program. Democratic Sens. Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon introduced a bill earlier this month that would reduce the number of qualifying payments to PSLF to 60 payments over five years and allow any prior student-loan payment to qualify toward forgiveness progress."The Public Service Loan Forgiveness program promised loan relief to Americans willing to pursue a career in public service," Whitehouse said in a statement. "Instead, they landed in a bureaucratic nightmare with no loan forgiveness in sight."The department has not commented on whether it plans to extend the PSLF waiver.Read the original article on Business Insider.....»»

Category: personnelSource: nytJun 24th, 2022

DEBT DIARIES: 24 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with two dozen student-loan borrowers stuck with huge debt loads. They're a small part of a $1.7 trillion crisis in the US. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden extended the pause for a fourth time, through August 31, citing uncertainty with the pandemic. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Now, Biden is reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and that announcement is likely to happen in July or August, closer to when payments are set to resume. But that relief could leave some borrowers out, like parents and graduate students, and the amount will not make a huge difference to those with much larger debt loads.Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.A 61-year-old student-loan borrower chooses between paying her debt and paying for health insurance — and Biden's forgiveness plans won't helpMarianne Ayala/InsiderRobin O'Brien, 61,  could not foresee the pandemic when she took out student loans to go to graduate school. There's no way she could have anticipated contracting COVID-19, and the medical bills that came along with it.Now, as Biden gets closer to making a decision on broad student-loan forgiveness, O'Brien is also forced to make a decision: paying her medical bills or her $64,000 student loan bills — and she knows she cannot afford both. She's disappointed graduate students are not being considered in Biden's relief plans.Read the full story here. Read the original article on Business Insider.....»»

Category: dealsSource: nytJun 15th, 2022

DEBT DIARIES: 23 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with nearly two dozen student-loan borrowers stuck with huge debt loads. They're a small part of a $1.7 trillion crisis in the US. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden recently extended the pause for a third time, through May 1, citing uncertainty with the Omicron variant. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.Read the original article on Business Insider.....»»

Category: personnelSource: nytJun 7th, 2022

Meet a teacher with $303,000 in student debt who says Biden"s $10,000 loan-forgiveness plan "is not even a drop in the bucket"

Student debt is "a nasty little loop you can't get out of," Cheryl said. She plans to get another job to afford payments when the pause ends. Getty Images Reports have suggested Biden is considering $10,000 in student-loan relief for federal borrowers. Cheryl told Insider that amount wouldn't make a difference to her $303,000 student-debt load. She said she has no problem paying back what she borrowed, but the interest just keeps growing. If it weren't for compounding interest, Cheryl — who requested her last name be withheld for privacy concerns — thinks President Joe Biden's plans to forgive $10,000 in student debt for federal borrowers might have made a difference for her.But with $303,000 in federal student debt — and an additional $20,000 in private student loans — the president's plan just isn't enough."It is not even a drop in the bucket," Cheryl, 53, told Insider. "If you wanted to make a real difference, you could do away with half the interest we've accrued, but for now I'll never be able to cover the payments."As a teacher in Massachusetts, Cheryl had to take out student loans for her bachelor's degree in English and her master's degree in education. While she said she has no problem paying back the debt she borrowed, the problem is the interest that accrued while she was in school and her loans were in forbearance. That's making it nearly impossible for her to touch her principal balance at her current income level.Biden has not confirmed an amount for any student-loan forgiveness he might implement, but recent reports have suggested he is looking at $10,000 in relief for federal borrowers making under $150,000 a year. While that's an amount he pledged to fulfill on the campaign trail, many Democratic lawmakers and advocates had hoped he would go bigger and are disappointed he appears to be settling on an amount that would hardly make a dent in the US's $1.7 trillion student-debt load."At the end of the day, we have to recognize that $10,000 is not enough," Wisdom Cole, the national director of the NAACP Youth & College Division, previously told Insider. "$20,000 is not enough. $30,000 is not enough. We have to cancel a minimum of $50,000 or more. Isn't the goal to get the most amount of relief to the most borrowers?"'I'm totally screwed' when student-loan payments restartThe Biden administration has emphasized that before student-loan payments are set to resume after August 31, it will make an announcement on broad relief. But if it's $10,000 in forgiveness, Cheryl said she will not be able to afford her federal debt bill on the income she makes right now — especially as she's getting ready to send her nephew, who she is financially supporting, to college."I'm totally screwed," Cheryl said. "And now I'm trying to put a kid through college and he got a good scholarship, but it doesn't pay for everything. I have no idea how I'm going to do it, I guess I'll have to get another job."During the payment pause, Cheryl was still making around $400 monthly payments on her private student loans, and not having to make the $200 federal monthly payments under her income-driven repayment plan provided a slight financial reprieve that helped her afford other basic necessities."I have $200 to get gas, and groceries and everything else, and there's not much left after that," Cheryl said. "It keeps you in this nasty little loop that you can't get out of because I can't afford to pay it down and the interest keeps coming."Although Cheryl's profession technically qualifies for the Public Service Loan Forgiveness (PSLF) program, which forgives student debt for public servants after ten years of qualifying payments, she was denied due to what she said was her time spent in payment forbearance while in school.The Education Department has announced actions to allow past payments to be counted toward forgiveness, but Cheryl is still waiting and said "the money made from teaching will never come close to what you need to borrow to become one."How lawmakers are reacting to the potential $10,000 in reliefBiden himself has not confirmed an amount of student debt he will cancel for federal borrowers, but when he said $50,000 in relief was off the table last month, some Democratic lawmakers and advocates grew concerned. Massachusetts Sen. Elizabeth Warren — one of the leading voices for broad student-loan forgiveness — released data that emphasized how going bigger on relief will be much more impactful.The data found that $50,000 in debt relief would zero out balances for 30 million, or 76%, of all federal borrowers, compared to 13 million borrowers for $10,000 in relief."As this analysis clearly shows, canceling student debt is a matter of racial justice and about providing relief to millions of hard-working people who invested in their education but are now drowning in debt," Warren said in a statement. "The more President Biden cancels, the more we narrow the racial-wealth gap among borrowers and the bigger the boost to Americans' economic futures. This is the right thing to do."But Republican lawmakers are saying the exact opposite. Insider previously reported on GOP concerns that Biden is canceling student debt to win Democratic votes at the midterms, and Virginia Foxx — a top Republican on the House Committee on Education and Labor — has frequently said canceling student debt would exacerbate inflation and cost taxpayers, referring to the $150 billion cost of the pandemic pause on payments.For Cheryl, the issue is simple — she wants to pay back what she borrowed, and nothing more."I don't mind paying back the money I borrowed," Cheryl said. "But I do mind the government making their money off my back."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 5th, 2022

Biden is teasing a coming decision on student-loan forgiveness. Here"s everything we know about how it could look.

The President's campaign pledge to forgive $10,000 per borrower is still on the table. Meanwhile Republicans are working to stop any forgiveness. President Joe BidenAP Photo/Carolyn Kaster Pressure has been mounting for Biden to cancel student debt, as he pledged during his campaign.  Last month, he said his decision on relief would come in a matter of weeks.  While Republican opposition mounts, a few developments hint at the kind of relief borrowers might see. Despite President Joe Biden's campaign pledge to cancel $10,000 in debt per borrower, he's been largely silent on the issue through his presidency.But there may be a light at the end of tunnel for more than 40 million Americans with federal student loans.In late April, Biden said he'd "have an answer" on relief in the coming weeks. That was a year after Biden asked the Department of Education to prepare a memo outlining his legal power to cancel student debt. Insider found that the Education Department created and circulated the memo, but Biden has not revealed its contents. Instead of relief for all borrowers,  so far, Biden has focused on targeted groups like borrowers with disabilities and those defrauded by for-profit schools, who have seen more than $9 billion in collective debt relief. He also extended the pandemic pause on student loan payments four times since taking office, following two from former President Donald Trump. Democrats are pressuring him to relieve borrowers in fear of low midterm turnout, with some progressives urging him to cancel at least $50,000 for those in debt. Meanwhile, Republicans senators have introduced bills intended to prohibit cancellation.Biden's approval rating among the young people who helped get him elected is tanking. With the payment pause set to expire after August 31, Americans are on pins and needles to find out what Biden will do. Here's everything we know so far.In April, Biden said he would announce a decision or extend the payment pause by September, when the current payment pause is up.President Joe Biden speaks to reporters in the Oval Office of the White House on May 9, 2022.Drew Angerer/Getty ImagesIn April, Biden gave himself until the end of August to announce a decision regarding student debt cancellation, or to extend the payment pause he'd already continued four times. "Between now and August 31, it's either going to be extended again or we're going to make a decision, as Ron referenced, about canceling student debt," White House Press Secretary Jen Psaki told Pod Save America referring to Ron Klain, Biden's chief of staff, who also told the podcast in March that leading up to the prior May 1 payment restart date, the president would either extend the pause again — which he did — or decide how he could act on student debt using executive action. Later that month, Biden shortened his own timeline, saying he'll 'have an answer' on student-loan forgiveness in the coming weeks.President Joe Biden laughs during the White House Correspondents' Association dinner in Washington, DC, on April 30, 2022.NICHOLAS KAMM/AFP via Getty ImagesSince Psaki revealed the end-of-August deadline, Biden truncated the timeline for the announcement to be a few weeks from April. "I'm in the process of taking a hard look at whether there will be additional debt forgiveness," Biden said at the end of the month. "And I'll have an answer for that in the next couple of weeks." Republicans introduce their first bill to bar Biden from cancelling debt broadly.Sen. John Thune alongside Senate Minority Leader Mitch McConnell at a news conference.Alex Wong/Getty ImagesFollowing Biden's hints that an announcement on forgiveness could be coming soon, GOP Sens. John Thune, Richard Burr, Mike Braun, Bill Cassidy, and Roger Marshall introduced the Stop Reckless Student Loans Action Act, which would end the payment pause and bar Biden from canceling student debt broadly."As Americans continue to return to the workforce more than two years since the pandemic began, it is time for borrowers to resume repayment of student debt obligations," Thune said in a statement. "Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment. This common-sense legislation would protect taxpayers and prevent President Biden from suspending federal student loan repayments in perpetuity." Shattering progressives' hopes, Biden confirmed in April that he won't be forgiving $50,000 in debt per borrower.President Biden at State of the Union.Saul Loeb - Pool/Getty ImagesDemocratic senators such as Chuck Schumer and Elizabeth Warren have made it clear that for many progressives, $50,000 in forgiveness per borrower is the number to strive for. "Canceling $50,000 of student-loan debt would give 36 million Americans permanent total relief," Warren said during a town hall in January. "That would be the end of their debt burden. And it would aid millions more by significantly reducing the principal on their debt."But at the end of April, Biden shattered progressives' hopes, saying that although he is considering debt forgiveness as promised, it will not be for as high as $50,000 per borrower. "I am considering dealing with some debt reduction, I am not considering $50,000 debt reduction," he told a reporter last month. It marked one of his most decisive comments to date on what he is considering when it comes to canceling student debt broadly.  Biden considers excluding high earners from debt relief, possibly excluding people who make more than $125,000 or couples making $250,000.Biden considered income caps on student debt relief while on the campaign trail, but that may not be what the final policy looks like.Susan Walsh/AP PhotoTop Biden aides are looking at limiting student debt relief to people earning less than $125,000 to $150,000, or $250,000 to $300,000 for couples that file joint taxes, people familiar with the matter told The Washington Post. But they said that Biden hadn't made a final decision. "There's different proposals floating around the administration about how to structure this," one person told the Washington Post.But as Psaki later noted, while income caps are in line with what Biden considered on the campaign trail, that may not be what the final policy looks like. Income caps could also pose problems for many Americans, as doing so means setting up a layer of income verification before the government grants debt relief. And it would mean that borrowers would miss out on relief if they don't know to sign up or apply for it, Politico reported. Three Democratic senators make a last ditch effort to urge Biden to go big on relief.Senate Majority Leader Charles Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are seen after the Senate Democrats luncheon in the U.S. Capitol on Tuesday, October 19, 2021.Tom Williams/CQ-Roll Call, Inc via Getty ImagesThree Democratic senators — Elizabeth Warren, Chuck Schumer, and Raphael Warnock — want Biden's student-loan relief to be expansive, and are requesting him to hold off on implementing any loan forgiveness through executive action until they can arrange a meeting with him, sources told Politico last week. Following Biden's comments that he is not considering $50,000 in debt cancellation for federal borrowers, something that Warren, Warnock, and Schumer have pushed for repeatedly, the progressive senators reportedly moved to intervene. "President Biden told the senator months ago he wanted to meet about this issue, and the senator wants to make sure the president hears why Georgians want strong debt relief before the White House takes any action," a Warnock spokesperson told Politico.A former Obama lawyer says Biden 'likely does not' have the legal standing to cancel student debt broadly.Then-Democratic presidential candidate Barack Obama listens as his vice presidential running mate, then-Sen. Joe Biden, speaks at a rally in front of the Old State Capitol in Springfield, Ill., on August 23, 2008.AP Photo/Alex BrandonThe contents of the Education Department's memo outlining whether or not the president has the authority to unilaterally cancel student debt remain private to Biden's team, leaving others to speculate over the last year. This month, a Wall Street Journal exclusive found that Charlie Rose, a top lawyer in former President Barack Obama's Education Department, is not confident that it's legal. According to a legal analysis the Journal obtained, Rose said that canceling student debt for every borrower without tailoring the relief toward each borrower's individual needs could be overruled in court and leave the administration at risk of being sued by student-loan companies."If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation," Rose wrote. Republicans are starting to worry Biden might actually forgive some student debt.Rep. Virginia FoxxBill Clark/CQ-Roll Call, Inc via Getty ImageRepublicans aren't happy about Biden's potential student loan action. Virginia Foxx, a North Carolina representative, was among congressional Republicans who have voiced their disapproval of student debt cancellation recently."The Biden administration is trying once again to save its tanking poll numbers by writing a blank check to student loan borrowers using Americans' pocketbooks," she said in an op-ed for Fox News. A group of Republicans led by Mitt Romney introduced a bill that would stop Biden from cancelling debt broadly.Republican Sen. Mitt Romney of Utah outside the Senate chamber on December 7, 2021.Bill Clark/CQ-Roll Call, Inc via Getty ImagesSenator Mitt Romney and several of his Republican colleagues introduced a bill that would bar the Biden administration from broadly canceling student-loan debt this week, prohibiting him from even partially forgiving borrowers' outstanding balances. The bill would include exemptions for student-loan forgiveness, cancelation, and repayment programs that are already in effect, such as the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs.The bill is unlikely to become law anytime soon with a 50-50 Senate, a Democratic-controlled House, and Biden in the Oval Office, but the message is clear. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 20th, 2022

Futures Slide After Dismal Target Earnings, Plunging Mortgage Apps

Futures Slide After Dismal Target Earnings, Plunging Mortgage Apps The brief bear market rally in US stocks was set to end with a whimper following Tuesday’s strong dead cat bounce, after Fed Chair Jerome Powell gave his most hawkish remarks to date. Hope that China lockdowns would soon end turned to skepticism, as the yuan slumped after its biggest gain since October, while dismal guidance from Target - which warned that inflation was crushing margins - confirmed what Walmart said yesterday, namely that the US consumer is running on fumes. An 11% plunge in the latest weekly mortgage applications only reaffirmed that a hard-landing is inevitable and just a matter of time. Nasdaq 100 futures dropped 1%, while S&P 500 futures slipped 0.7% after US stocks surged on Tuesday. Treasury yields hit session highs, rising back to 3.0%, and the dollar snapped a three-day losing streak. Bitcoin got hammered again, sliding back under $30k. Among the biggest premarket movers, Target crashed 22% with Vital Knowledge calling its margin shortfall “more dramatic” than what Walmart posted on Tuesday, citing industry-wide macro problems. The retailer reduced its full-year forecast on operating income margin to about 6% of sales this year. It also reported first-quarter adjusted earnings per share that came in below expectations. Food and gas inflation is drawing money away from discretionary and general merchandise spending, forcing “aggressive” discounting to clear out product in the latter category, Vital’s Adam Crisafulli said in a note. Elsewhere in US premarket trading, Tesla slipped 1% after its price target was cut at Piper Sandler. Meanwhile, Twitter Inc. also traded slightly lower even as the social media platform’s board said it plans to enforce its $44 billion agreement to be bought by Elon Musk. Here are some other notable premarket movers: US tech hardware stocks may be in focus as Jefferies Group LLC strategists have turned bullish on the likes of IBM (IBM US), Cisco Systems (CSCO US) and Microchip Technology (MCHP US) after this year’s steep declines for US information technology shares National CineMedia (NCMI US) shares jump as much as 33% in US premarket trading after AMC Entertainment (AMC US) reported a 6.8% stake in the cinema advertising company. AMC shares gain 1.2% in premarket trading. DLocal Ltd. (DLO US) shares gain as much as 15% in US premarket trading after the Uruguay-based payment platform posted 1Q revenue that doubled from the year-earlier period and topped expectations. Doximity (DOCS US) shares fall as much as 19% in US premarket trading, after the online healthcare platform provider’s forecast for 1Q revenue missed the average analyst estimate, prompting analysts to slash their price targets on the stock. Penn National (PENN US) may be active on Wednesday as Jefferies raised the recommendation to buy from hold. The company’s shares rose 4% in premarket trading. On Tuesday, Powell said the Fed will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat, which initially pushed stocks lower but then was faded as risk closed near session highs as nothing Powell said was actually new. The S&P 500 is emerging from the longest weekly slump since 2011 as investors have been gripped by fears of hawkish monetary policy and surging inflation driving the economy into a recession. As also discussed yesterday, Bank of America’s survey published yesterday showed that fund managers are the most underweight equities since May 2020 and are piling into cash. “This is one of the most challenging markets I have been in in my career,” Henry Peabody, fixed income portfolio manager at MFS Investment Management, said on Bloomberg Television. “I suspect at a certain point of time we’re going to have the liquidity of the markets challenged. They really haven’t been thus far.” As the Fed embarks on interest-rate hikes, frothy growth shares, including the tech sector, have suffered in particular as higher rates mean a bigger discount for the present value of future profits. This marks a major shift in investor outlook after tech stocks had been some of the market’s best performers for years. “Investor sentiment and confidence remain shaky, and as a result, we are likely to see volatile and choppy markets until we get further clarity on the 3Rs — rates, recession, and risk,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note. Rebounds in risk sentiment are proving fragile amid tightening monetary settings, Russia’s war in Ukraine and China’s Covid lockdowns. In what’s seen as his most hawkish remarks to date, Powell said that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. “We’ll have this kind of volatility as people jump in and look at opportunities to buy as markets decline,” Shana Sissel, director of investments at Cope Corrales, said on Bloomberg Television, referring to the Wall Street bounce. The Fed is going to struggle to achieve a soft economic landing, she added. In Europe, the Stoxx 600 Index was little changed, with energy stocks outperforming. Spain's IBEX outperformed, adding 0.5%. ABN Amro slumped almost 10% after the Dutch lender reported first-quarter results burdened by rising costs.  The Stoxx Europe 600 Basic Resources sub-index drops, underperforming other sectors in the broader regional benchmark on Wednesday as base metals ended a three-day rebound and as iron ore declined. Base metals paused a recovery from this year’s lows, with copper and aluminum stalling after hawkish remarks from Federal Reserve Chair Jerome Powell. Iron ore futures declined as investors weighed China’s faltering economy and the prospect of support measures amid a mixed outlook for steel demand. Basic resources index -0.6%, halting three days of gains; broader benchmark little changed. Siemens Gamesa jumped as much as 15% as Siemens Energy weighs a bid for the shares of the troubled Spanish wind-turbine maker it doesn’t already own. Here are the most notable movers: European oil and gas stocks rise amid higher crude prices and broker upgrades, while renewables rallied after Siemens Energy confirmed it was considering a buyout offer for Siemens Gamesa. Shell gains as much as 1.8%, BP +1.8%, Equinor +3.4%, Gamesa +15%, Vestas +7.7% Air France-KLM shares rise as much as 7.5% in Paris on news that container line CMA CGM intends to take a stake of up to 9% in the French carrier following the signing of a long-term strategic partnership in the air cargo market. Rockwool shares gain as much as 8.3%, most since Feb. 15, as the company boosts its sales in local currencies forecast for the full year. British Land shares rise as much as 4.2%, as the company’s results show a strong recovery and a good performance in the UK landlord’s portfolio, analysts say. Vistry shares climb as much as 8% with analysts saying the UK homebuilder’s trading update looks positive, particularly the robust momentum in its sales rate. The Stoxx Europe 600 Basic Resources sub-index drops, underperforming other sectors in the broader regional benchmark on Wednesday as base metals ended a three-day rebound and as iron ore declined. Rio Tinto slips as much as 1.5%, Antofagasta -2.7%, Anglo American -1.5% Prosus shares fall as much as 4.2% and Naspers sinks as much as 6.7% after Tencent reported first- quarter revenue and net income that both missed analyst expectations. TUI shares drop as much as 13% in London after the firm announced an equity raise in order to repay a chunk of government aid that helped see it through the coronavirus crisis. ABN Amro shares declined as much as 11% after the lender reported 1Q earnings that showed higher costs related to money laundering. Experian shares fall as much as 5.1% after the consumer-credit reporting company reported full-year results, with Citi saying organic growth missed consensus. Meanwhile, UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank. The pound weakened and gilt yields fell as traders speculated that the Bank of England will struggle to rein in inflation and avoid a recession. Elsewhere, the Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to a default. Sri Lanka, meantime, is on the brink of reneging on $12.6 billion of overseas bonds, a warning sign to investors in other developing nations that surging inflation is set to take a painful toll. Earlier in the session, Asian stocks advanced for a fourth session as strong US economic data allayed worries about the global growth outlook, while Chinese equities slipped. The MSCI Asia-Pacific Index rose as much as 1%, extending its rebound from an almost two-year low reached last Thursday. Materials shares led the gains, with Australia’s BHP Group climbing 3.2%. Benchmarks in most markets were in the black, with Indonesia, Taiwan and Singapore chalking up gains of at least 1%.  Upbeat retail sales and industrial production data from the US underpinned sentiment, so much so that investors barely reacted to hawkish comments from Federal Reserve Chair Jerome Powell. He indicated that policy makers won’t hesitate to raise interest rates beyond neutral levels to contain inflation. Equities in China bucked the trend. Property shares paced the drop after data showed the decline in China’s new home prices accelerated in April, while tech shares also lost steam ahead of Tencent’s earnings which missed expectations and slumped. Local investors may be underwhelmed by a lack of details from Chinese Vice Premier Liu He’s fresh vow to support tech firms. Liu said the government will support the development of digital economy companies and their public listings, in remarks reported by state media after a symposium with the heads of some the nation’s largest private firms. Lee Chiwoong, chief economist at Mitsubishi UFJ Morgan Stanley Securities, said Liu’s comments point to an easing of the crackdown on internet firms. “The Chinese government is stepping up measures to support the economy following the slowdown,” Lee said.  “As bottlenecks stemming from lockdowns in Shanghai ease, that impact will gradually show up in the economy,” Lee added. “We should be able to clearly see an economic recovery in the second half of this year.” Japanese equities gained as investors assessed strong US economic data and comments by Federal Reserve Chair Jerome Powell on the outlook for interest rate hikes.  The Topix Index rose 1% to close at 1,884.69. Tokyo time, while the Nikkei advanced 0.9% to 26,911.20. Sony Group Corp. contributed the most to the Topix gain, increasing 2.9%. Out of 2,172 shares in the index, 1,345 rose and 749 fell, while 78 were unchanged. Chinese stocks erased losses intraday after earlier disappointment over a much-anticipated meeting between Vice Premier Liu He and some of the nation’s tech giants. Overnight, data showed US retail sales grew at a solid pace in April, while factory production rose at a solid pace for a third month. Australia's stocks also gained, with the S&P/ASX 200 index rising 1% to close at 7,182.70, extending its winning streak to a fourth day. Miners contributed the most to its advance. All sectors gained, except for consumer staples and financials. Eagers slumped after saying that its 1H profit will be lower than it was a year ago and flagged reduced new vehicle deliveries. Wage data was also in focus. Australian wages advanced at less than half the pace of consumer-price gains in the first three months of the year, reinforcing the RBA’s signal that it will stick to quarter-point hikes.  In New Zealand, the S&P/NZX 50 index rose 1.1% to 11,258.28 India’s benchmark equities index fell, snapping two sessions of gains, weighed by declines in engineering company Larsen & Toubro Ltd.    The S&P BSE Sensex dropped 0.2% to close at 54,208.53 in Mumbai, after rising as much as 0.9% earlier in the session. The NSE Nifty 50 Index fell 0.1% to 16,240.30.  Larsen & Toubro slipped 2% and was the biggest drag on the Sensex, which saw 17 of its 30 member stocks decline. Sixteen of 19 sectoral sub-indexes compiled by BSE Ltd. dropped, led by a gauge of realty shares.   State-run Life Insurance Corporation, which debuted Tuesday, rose 0.1% to 876 rupees, still below the issue price of 949 rupees. In earnings, of the 34 Nifty 50 firms that have announced results so far, 20 have either met or exceeded analyst estimates, while 14 have missed. Consumer goods company ITC Ltd. is scheduled to announce results on Wednesday. In FX, the Bloomberg Dollar Spot Index reversed an early loss and the greenback advanced versus all of its Group-of-10 peers apart from the yen. The pound was the worst G-10 performer, tracking Gilt yields lower and paring the previous day’s gains. A widely expected jump in UK inflation prompted investors to pare back bets on BOE rate hikes. Money markets are pricing around 120bps of BOE rate hikes by December, down from 130bps from the previous day. UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank. Consumer prices surged 9% in the year through April. The euro fell for the first day in four and weakened beyond $1.05. The Bund curve has twist flattened as traders bet on a faster pace of ECB tightening after Bank of Finland Governor Olli Rehn said there’s broad agreement among members of the Governing Council that policy rates should exit sub-zero terrain “relatively quickly.” That’s to prevent inflation expectations from becoming de- anchored, he said. The Aussie swung between gains and losses while Australia’s bonds trimmed earlier declines after a report showed wage growth last quarter was less than economists forecast. The wage price index climbed an annual 2.4% last quarter, trailing economists’ expectations and coming in well below headline inflation of 5.1%. The yen rose as US yields declined amid fragile risk sentiment. Japanese government bonds were mixed, with a decent five-year auction lending support while an overnight rise in global yields weighed on super-long maturities. In rates, Treasuries were under pressure, though most benchmark yields remained within 1bp of Tuesday’s closing levels. 10-year yields rose just shy of 3.00%, higher by less than 1bp with comparable bund yield +3.3bp and UK 10-year flat. TSY futures erased gains amid a series of block trades in 5- and 10-year note contracts starting at 5:20am ET, apparently selling flow. According to Bloomberg, six 5-year block trades and two 10-year block trades -- all 5,000 lots -- have printed since 5:20am, apparently seller-initiated as cash yields concurrently rebounded from near session lows. Wednesday’s $17b 20-year new-issue auction at 1pm ET may also weigh on the market. 20-year bond auction is this week’s only nominal coupon sale; WI yield ~3.37% exceeds all 20-year auction stops since then tenor was reintroduced in 2020, is ~27.5bp cheaper than last month’s result. Elsewhere, the UK yield curve bull-steepened with the short end richening ~5bps, while pound falls after inflation surged to a four-decade high. Money markets pare BOE rate-hike wagers. Bund curve bear-flattens while money markets bet on a faster pace of ECB tightening after ECB’s Rehn said the central bank needs to move quickly from negative rates. In commodities, WTI trades within Tuesday’s range, adding 1.6% to around $114. Most base metals are in the red; LME tin falls 1.5%, underperforming peers, LME aluminum outperforms, adding 1%. Spot gold is little changed at $1,815/oz. Looking to the day ahead now, and data releases include the UK and Canadian CPI readings for April, along with US data on housing starts and building permits for the same month. Central bank speakers include the Fed’s Harker and the ECB’s Muller. Earnings releases include Cisco, Lowe’s, Target and TJX. Finally, G7 finance ministers and central bank governors will be meeting in Germany. Market Snapshot S&P 500 futures down 0.5% to 4,065.50 STOXX Europe 600 down 0.2% to 438.11 MXAP up 0.8% to 164.43 MXAPJ up 0.7% to 539.81 Nikkei up 0.9% to 26,911.20 Topix up 1.0% to 1,884.69 Hang Seng Index up 0.2% to 20,644.28 Shanghai Composite down 0.2% to 3,085.98 Sensex up 0.3% to 54,469.39 Australia S&P/ASX 200 up 1.0% to 7,182.66 Kospi up 0.2% to 2,625.98 German 10Y yield little changed at 1.03% Euro down 0.4% to $1.0505 Brent Futures up 1.5% to $113.66/bbl Gold spot down 0.0% to $1,815.04 U.S. Dollar Index up 0.33% to 103.70 Top Overnight News from Bloomberg Sweden’s biggest pension company has begun buying government bonds amid a “paradigm shift” in the market that pushed yields to their highest level since 2018. The CIO views Treasuries as “quite attractive” after a prolonged period of razor-thin yields that forced the company into alternative and riskier asset classes to preserve returns across its $117 billion portfolio While outright China bulls may be hard to find, shifts in positioning at least point to improving sentiment. Bearish bets on stocks are being abandoned in Hong Kong, expectations for yuan volatility are falling, domestic equity traders have stopped unwinding leverage and foreigners have slowed their once-record exit from government bonds The EU is set to unveil a raft of measures ranging from boosting renewables and LNG imports to lowering energy demand in its quest to cut dependence on Russian supplies. The 195 billion-euro ($205 billion) plan due Wednesday will center on cutting red tape for wind and solar farms, paving the way for renewables to make up an increased target of 45% of its energy needs by 2030, according to draft documents seen by Bloomberg that are still subject to change A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mixed as the regional bourses only partially sustained the momentum from global peers. ASX 200 was led higher by outperformance in the mining and materials related sectors, while softer than expected wage price data reduced the prospects of a more aggressive RBA rate hike next month. Nikkei 225 briefly reclaimed the 27,000 level but retreated off its highs as participants digested GDP data which printed in negative territory, albeit at a narrower than feared contraction. Hang Seng and Shanghai Comp were subdued with large-cap tech stocks pressured in Hong Kong including JD.com despite beating earnings expectations and with Tencent bracing for the expected slowest revenue growth since its listing, while the mainland was hampered by the mixed COVID-19 situation as Shanghai registered a 4th consecutive day of zero transmissions outside of quarantine, although Beijing was said to lockdown some areas in its Fengtai district for 7 days. Top Asian News Shanghai authorities issued a new white list containing 864 financial institutions permitted to resume work, according to sources cited by Reuters. China, on May 20th, is to remove some COVID test requirements on travellers to China from the US, according to embassy. China's Foreign Ministry says the BRICS foreign ministers are to meet on May 19th. Goldman Sachs downgrades its 2022 China GDP growth forecast to 4.0% from 4.5%. European bourses are rangebound and relatively directionless, Euro Stoxx 50 U/C, taking impetus from a mixed APAC session which failed to sustain US upside. Stateside, futures are modestly softer and a firmer Wall St. close; ES -0.2%. Limited Fed speak due and near-term focus on retail earnings. Tencent (0700 HK) Q1 2022 (CNY): adj. net profit 25.5bln (exp. 26.4bln), Revenue 135.5bln (exp. 141bln). Lowe's Companies Inc (LOW) Q1 2023 (USD): EPS 3.61 (exp. 3.22/3.23 GAAP), Revenue 23.70bln (exp. 23.76bln). SSS: Lowe's Companies: -4.0% (exp. -2.5%); Lowe's Companies (US): -3.8% (exp. -3.7%). -0.2% in the pre-market Top European News UK Chancellor Sunak is reportedly mulling bringing forward the 1p income tax cut to the basic rate by one year, according to iNews citing Treasury insiders. Other reports suggest that Sunak is putting plans together to raise the warm home discount by hundreds of GBP in July ahead of lowering taxes in autumn to assist with the cost of living crisis, according to The Times. EU is to offer the UK new concessions on the Northern Ireland protocol but has threatened a trade war if UK PM Johnson refuses to agree to a compromise, according to The Telegraph. In FX Sterling slides to the bottom of the major ranks as fractionally sub-forecast UK CPI dampens BoE rate hike expectations; Cable reverses from just over 1.2500 to sub-1.2400, EUR/GBP nearer 0.8500 after dip below 0.8400 only yesterday. Hawkish Fed chair Powell helps Buck bounce ahead of US housing data, DXY towards the upper end of 103.770-180 range. Aussie hampered by softer than expected wage metrics that might convince the RBA to refrain from 40bp hike in June, AUD/USD heavy on the 0.7000 handle. Yen relatively resilient in wake of Japanese GDP showing less contraction in Q1 than feared, USD/JPY closer to 129.00 than 129.50. Euro loses momentum irrespective of comments from ECB’s Rehn echoing Summer rate hike guidance as final Eurozone HICP is tweaked down, EUR/USD fades from 1.0550+ to test support around 1.0500. Loonie treads cautiously before Canadian inflation metrics as oil prices come off the boil, USD/CAD back above 1.2800 within 1.2795-1.2852 range. In Fixed Income Gilts sharply outperform as UK CPI falls just shy pf consensus and dampens BoE tightening expectations. 10 year UK bond rebounds towards 119.50 from sub-119.00 lows, while Bunds lag below 152.50 and T-note under 119-00. Record high cover for 2052 German auction and low retention sets high bar for upcoming 20 year US offering. Central Banks ECB's Rehn says June forecasts are seen near the adverse scenario from March, first rate increase will likely take place in the summer. Many colleagues back stance for quick moves. ECB's de Cos says the end of APP should be finalised early in Q3, first hike shortly afterwards. Further rises could be made in subsequent quarters of medium-term outlook remains around target; the build-up of price pressures in EZ in recent months raises the likelihood of second-round effects, which have not strongly materialised. In commodities WTI and Brent are modestly supported after yesterday's lower settlement; currently, firmer by just over USD 1.00/bbl. Focus has been on the narrowing WTI/Brent spread, particularly going into US driving season; see link below for ING's views. US Energy Inventory Data (bbls): Crude -2.4mln (exp. +1.4mln), Cushing -3.1mln, Gasoline -5.1mln (exp. -1.3mln), Distillates +1.1mln (exp. unchanged). Spot gold and silver are modestly firmer but capped by a firmer USD, yellow metal just shy of USD 1820/oz. US Event Calendar 07:00: May MBA Mortgage Applications, prior 2.0% 08:30: April Building Permits MoM, est. -3.0%, prior 0.4%, revised 0.3% 08:30: April Housing Starts MoM, est. -2.1%, prior 0.3% 08:30: April Building Permits, est. 1.81m, prior 1.87m, revised 1.87m 08:30: April Housing Starts, est. 1.76m, prior 1.79m DB's Jim Reid concludes the overnight wrap Another reminder of my webinar replay from last week discussing our recession call for 2023 and an update on credit spreads. In it I said that while we have high conviction that HY spreads would be +850bp in H2 2023, the outlook over the next few weeks and months may actually be positive from this starting point. I would say I am nervous of that view but I still don't think that the real economic pain comes until deeper into 2023 when the lagged impact of an aggressive Fed starts to bite. Click here to view the webinar and to download the presentation. Good luck to Glasgow Rangers and Eintracht Frankfurt in tonight's Europa League final. These are not teams that any would have expected to reach this final and I will watch with stress free divided loyalties. My father's family were all from the former and supported Rangers while the latter play at the fabulously named Deutsche Bank Park. So good luck to both. I suspect I'll be less stress free in 11 days' time when Liverpool are out for revenge against Real Madrid in the Champions League Final. At the moment I’m feeling nervously optimistic. Talking of which, investor optimism has returned to markets over the last 24 hours as more positive data releases raised hopes that the US economy might be more resilient in the near-term than many have feared. The economic concerns won't go away, but stronger-than-expected numbers on retail sales and industrial production helped the S&P 500 (+2.02%) close at its highest level in over a week. Remember monetary policy acts with a lag and it would be very unusual historically if the data rolled over imminently. By this time next year it will likely be a very different story. The higher yield momentum was reinforced by a Powell speech after Europe went home but there was a steady march of slightly hawkish central bank speakers through the day. Before we review things keep an eye out for UK CPI just after this goes to press. The headline rate is expected to be a huge 9.1%. Expect a lot of headlines reporting of 40 year highs. With regards to Powell, most in focus was his claim that policy rates would rise above neutral if that was required to tame inflation. While the sentiment was not necessarily new, his explicit comment that neutral rates are “not a stopping point” garnered focus, noting that the Fed was looking for “clear and convincing evidence” that inflation was subsiding. The rates market have already priced terminal policy rates above the Fed’s estimate of neutral, but a combination of the risk on, and stronger data meant that equities could go up alongside yields. Earlier in the day we got a smattering of communications from Fed regional Presidents, none of which registered as materially but it reinforced the direction of travel after a month to date where markets have repriced the Fed lower. Indeed, even resident hawk, St Louis Fed President Bullard, reiterated Powell’s message in that the Fed was on course for 50bp hikes at the upcoming meetings and said that “I think we have a good plan for now”. Sovereign bonds had already sold off significantly ahead of all that Fedspeak, aided by the broader risk-on tone yesterday, but continued drifting higher through the US session. Yields on 10yr Treasuries closed +10.4bps to a one-week high of 2.99%, driven by a +7.9bps rise in real yields to 0.24%. The moves were more pronounced at the front-end however, and the 2yr yield rose by a larger +13.1bps as investors priced in a more aggressive path of hikes over the next 12 months after data showed the economy was performing stronger than the consensus had anticipated. In terms of the headlines, retail sales were up by +0.9% in April (vs. +1.0% expected), but the growth in March was revised up to +1.4% (vs. +0.5% previously). Retail sales excluding autos and gas were up by +1.0% as well (vs. +0.7% expected), whilst the industrial production number was another that came in above expectations at +1.1% (vs. +0.5% expected). Europe also had a large move in yields, which followed comments by Dutch central bank Governor Knot who became the first member of the Governing Council to openly float the idea of a 50bp hike. Although he said that “my preference would be to raise our policy rate by a quarter of a percentage point”, he said that “bigger increases must not be excluded” if data were to show inflation “broadening further or accumulating”. So even though he’s one of the more hawkish members of the council, that’s still a significant milestone in that larger moves are being openly discussed, and echoes what we saw with the Fed at the turn of the year when the policy trajectory became increasingly aggressive. Market pricing reflected that shift yesterday, and for the first time overnight index swaps were pricing in that the ECB would hike by more than 100bps by their December meeting and thus catching up with the DB House View. That growing belief behind additional hikes led to a fresh selloff in sovereign bonds, with those on 10yr bunds (+10.9bps), OATs (+10.5bps) and BTPs (+11.7bps) all moving higher. The biggest moves were seen from gilts (+15.0bps) however, which followed data that pointed to an increasingly tight labour market in the UK, and overnight index swaps nearly doubled the probability of a 50bp rate hike from the BoE in June, with the odds moving from 17% on Monday to 33% yesterday. Over in equities, stronger risk appetite led to a significant rebound yesterday, with the S&P 500 (+2.02%) hitting a one-week high, whilst the NASDAQ (+2.76%) saw an even larger rebound in spite of the simultaneous rise in yields. Walmart (-11.38%) was by far the worst performer in the S&P, which came as it cut its earnings per share forecast, which it now expected to decrease by 1%, relative to previous guidance that expected it to rise by the mid single-digits. But that was the exception, and every sector except consumer staples moved higher on the day, with the more cyclical areas leading the advance. Over in Europe the STOXX 600 (+1.22%) posted a strong performance of its own, bringing its advance to more than +5% since its recent closing low just over a week ago. Overnight in Asia, performance in regional stock indices is diverging partly on the back of economic data. Japan’s Q1 GDP (-1.0%) contracted less than expected (-1.8%), lifting the Nikkei (+0.50%) this morning. In China, though, rising covid cases and waning optimism about government’s support of tech companies weighed on the Shanghai composite (-0.37%) and the Hang Seng (-0.66%). New home prices (-0.30%) in the country also slid for an eighth month in a row. This slight souring of sentiment has extended to S&P 500 futures (-0.23%) with the US 10y yield edging back lower by -2.2bps. Elsewhere, tensions over Brexit ratcheted up again yesterday after UK Foreign Secretary Truss announced plans to introduce legislation that would override parts of the Northern Ireland Protocol. Truss said that the UK’s preference “remains a negotiated solution with the EU” and that the bill would contain an “explicit power to give effect to a new, revised Protocol if we can reach an accommodation”, but that “the urgency of the situation means we can’t afford to delay any longer.” Unsurprisingly the EU did not react happily, and Commission Vice President Šefčovič said in a statement that if the UK moved ahead with the bill, then “the EU will need to respond with all measures at its disposal.” Staying on the UK, the latest employment data out yesterday pointed to an increasingly tight labour market, with the unemployment rate falling to 3.7% in the three months to March (vs. 3.8% expected), which is the lowest it’s been since 1974. Furthermore, the number of vacancies was larger than the total number of unemployed for the first time, and the more up-to-date estimate of payrolled employees in April saw an increase of +121k (vs. +51k expected). Elsewhere in Europe, the latest estimate of Euro Area GDP growth in Q1 showed a bigger than expected expansion of +0.3% (vs. +0.2% previously). Elsewhere the chances of a Russian sovereign debt default increased, following the Treasury department confirming a temporary waiver that allowed Russia to pay US creditors would expire on May 25. Meanwhile, the US is reportedly considering a tariff on Russian oil in conjunction with European allies, as the saga about banning imports to Europe drags on. To the day ahead now, and data releases include the UK and Canadian CPI readings for April, along with US data on housing starts and building permits for the same month. Central bank speakers include the Fed’s Harker and the ECB’s Muller. Earnings releases include Cisco, Lowe’s, Target and TJX. Finally, G7 finance ministers and central bank governors will be meeting in Germany. Tyler Durden Wed, 05/18/2022 - 07:51.....»»

Category: blogSource: zerohedgeMay 18th, 2022

"Chronically struggling" student-loan borrowers need more than a payment pause that postpones "a day of reckoning," a Philly Fed survey says

The Philadelphia Fed found that pausing student-loan payments isn't much help to struggling borrowers. Getty Images The Philadelphia Fed released an analysis on the student-loan payment pause and forgiveness. It found the pause on payments is not sufficient to help borrowers chronically struggling with payments. And while the majority of respondents support debt relief, most of them want it to be targeted. Putting a pause on student-loan payments isn't much help to struggling borrowers, a new Fed report found.On Friday, the Philadelphia Federal Reserve released an analysis of survey results on student-loan repayment and cancellation. Using a national sample of 13,423 consumers from the Fed's Consumer Finance Institute, the analysis found the more than two-year pause on student-loan payments is not sufficient to help the over one-fifth of "chronically struggling" borrowers who were making no or partial payments prior to the pandemic and don't see that changing once the payment pause ends."These borrowers would benefit from a more comprehensive solution than simply extending blanket administrative forbearance," the analysis said. "That is because their ability to afford payments has not materially changed since before the pandemic.""In other words, for some borrowers, additional forbearance extensions are simply postponing a day of reckoning with loan payments that are unaffordable," the analysis added.President Joe Biden has extended the pause on payments four times since he took office, with payments now set to resume after August 31. But for the duration of the pandemic, numerous reports detailed how even with the pause, borrowers would not be financially prepared to foot another monthly bill. For example, a Student Debt Crisis Center survey in February found 92% of fully-employed borrowers were worried about restarting payments amid rising inflation, and 27% said they would never be ready to resume paying off their debt again.The Fed recommended that the Education Department consider policies that reduce debt for future borrowers, like increasing the use of grants over loans for more low-income students and strengthening implementation of income-driven repayment programs. And when it comes to broad student-debt cancellation, the Fed found 86% of respondents with student debt supported some form of debt relief. Among that group, most of them preferred targeted relief, with 28% of them preferring income caps and 17% preferring forgiveness based on assets or outstanding debt balances.As of now, it's unclear what type of relief Biden will actually implement. He recently said that while he is not considering $50,000 in forgiveness per borrower, which many progressive lawmakers had hoped for, he noted a decision on forgiveness will be made in the coming weeks. And his Press Secretary Jen Psaki said during a Thursday press briefing that while targeting relief to those making under $125,000 is something Biden considered on the campaign trail, it "necessarily" related to the final policy decision he'll make. But some Democrats want borrowers to get relief soon — and for all of them."Now is not the time for half measures, extensions or patchwork solutions," eight state attorneys general recently wrote in a letter. "Now is the time for decisive action."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 13th, 2022

Former Obama lawyer says Biden "likely does not" have the legal standing to cancel student debt broadly: WSJ

The Wall Street Journal obtained a legal analysis by a top Obama lawyer that questioned how mass student-debt cancellation would hold up in court. President Joe Biden.Henry Nicholls/Pool via Getty Images The Wall Street Journal obtained a legal analysis from a former Obama lawyer on student-debt relief. The analysis said mass student-loan forgiveness has the potential to be overruled in court. The debate on broad loan forgiveness within the Higher Education Act has remained ongoing. As President Joe Biden is getting closer to canceling student debt, a newly released analysis throws into question how doing so might hold up in court.On Wednesday, a Wall Street Journal exclusive found that Charlie Rose — a top lawyer in former President Barack Obama's Education Department — is not confident in the legality of broad student-loan forgiveness. According to a legal analysis the Journal obtained, Rose said canceling student debt for every borrower without gearing the relief toward each borrower's individual needs could be overruled in court and leave the administration at risk of being sued by student-loan companies."If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation," Rose wrote. The Journal said that Rose confirmed to the publication the analysis was intended for a private client, not for public release.The legal debate surrounding broad student-loan forgiveness remains ongoing. Last April, Biden asked the Education Department to prepare a memo examining his legal authority to cancel student debt broadly. While the memo's findings have yet to be publicly released, the Debt Collective — the nation's first debtors union — obtained the redacted memo via the Freedom of Information Act in October, revealing that Biden is aware of what type of legality he has to act on student debt but is not making it publicly known.Still, it's looking likely the president will cancel student debt broadly. Biden said in a speech last week a decision on loan forgiveness will be made "in a couple of weeks," and the relief will likely be close to his $10,000 forgiveness campaign pledge, subject to income limits. White House Press Secretary Jen Psaki told reporters this week relief is being considered for those making under $125,000 a year.While Democrats have argued Biden has the authority under the Higher Education Act to forgive student debt using executive action, many Republican lawmakers have said that authority does not exist. Five Republican lawmakers recently introduced a bill to resume student-loan payments and block Biden from canceling student debt as part of pandemic relief."As Americans continue to return to the workforce more than two years since the pandemic began, it is time for borrowers to resume repayment of student debt obligations," Sen. John Thune said in a statement.Republicans have frequently slammed the notion of broad forgiveness, saying it will cost taxpayers and the economy, with some of them arguing Biden is only considering the relief to win votes at the midterms. But many Democrats have long been saying the authority to cancel student debt is there, and Biden just needs to sign an executive action.Legal experts at the Harvard Law School Legal Services Center prepared an analysis for Massachusetts Sen. Elizabeth Warren in 2020 that found that her proposal to cancel $50,000 in student debt for every federal borrower "calls for a lawful and permissible use of the authority Congress has conferred on the Secretary of Education, which is anticipated and allowed for in the budgetary and accounting treatment of federal student loan programs."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 5th, 2022

GOP lawmakers want to block Biden from canceling student debt and extending the payment pause "in perpetuity"

Five Republicans introduced a bill to end the student-loan payment pause, which Sen. Braun called "a taxpayer handout to appease far-left activists." Sen. John Thune alongside Senate Minority Leader Mitch McConnell at a news conference.Alex Wong/Getty Images Five GOP lawmakers introduced a bill to block Biden from extending the student-loan payment pause. It would also prohibit Biden from canceling student debt in connection to a national emergency. This comes after Biden suggested on Monday he's open to canceling at least $10,000 in debt. After President Joe Biden suggested increased openness to canceling student debt broadly, a group of Republican lawmakers took the first step in attempting to put a stop to that.On Wednesday, GOP Sens. John Thune, Richard Burr, Mike Braun, Bill Cassidy, and Roger Marshall introduced the Stop Reckless Student Loans Action Act, legislation that would end Biden's pause on student loan payments and prohibit him from canceling student debt broadly as part of an emergency response to the pandemic. "As Americans continue to return to the workforce more than two years since the pandemic began, it is time for borrowers to resume repayment of student debt obligations," Thune said in a statement. "Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment. This common-sense legislation would protect taxpayers and prevent President Biden from suspending federal student loan repayments in perpetuity."Biden recently extended the pause on student-loan payments for his fourth time, through August 31, and he suggested to the Congressional Hispanic Caucus on Monday that he is open to canceling at least $10,000 in student debt for every federal borrower. Republicans' have consistently slammed the notion of broad student-loan forgiveness, arguing it will cost taxpayers and the economy.According to the press release, the bill would still allow Biden to "temporarily suspend repayment for low- and middle-income borrowers in future national emergencies." It added that pausing student-loan payments disproportionately benefits high earners, which progressives have pushed back against, and cited the $5 billion cost per month that accompanied each pause.Despite GOP pushback, Biden's Monday meeting with the Hispanic Caucus suggests he's willing to go beyond his $10,000 student-loan forgiveness campaign pledge. The Washington Post reported that, according to lawmakers in attendance, Biden is hoping to carry out this relief sooner rather than later, but NBC News reported on Wednesday the president did not specify a dollar amount or a timeline. It is likely whatever relief he implements will be linked to income, meaning it likely will not be as far-reaching as many Democratic lawmakers are hoping.White House Press Secretary Jen Psaki did note, however, that a decision on student-loan relief will be made before payments are set to resume at the end of August — and Republicans hope that decision will be putting borrowers back into repayment."The majority of Americans do not have college degrees," Braun said in a statement. "Why should they be forced to pick up the tab for college degrees in the name of pandemic relief? This transfer of wealth is not a move to 'advance equity,' but rather a taxpayer handout to appease far-left activists."Read the original article on Business Insider.....»»

Category: smallbizSource: nytApr 27th, 2022

Biden will "make a decision" about canceling student debt or extend the payment pause again before August, the White House says

White House Press Secretary Jen Psaki told Pod Save America of potential relief student-loan borrowers could be getting as soon as this summer. White House Press Secretary Jen Psaki speaks during the daily press briefing at the White House on January 26, 2022.Drew Angerer/Getty Images White House's Jen Psaki said Biden will extend the student-loan payment pause again, or cancel debt. She told Pod Save America the decision will happen before payments are set to resume after August. Sen. Chuck Schumer recently said he's "making progress" with Biden on broad debt relief. Millions of federal student-loan borrowers just got an additional four month reprieve from making payments, and the White House indicated more relief will be coming. "Between now and August 31, it's either going to be extended again or we're going to make a decision, as Ron [Klain] referenced, about canceling student debt," White House Press Secretary Jen Psaki told Pod Save America last week.Klain, President Joe Biden's chief of staff, told the same podcast in March that leading up to the prior May 1 payment restart date, the president would either extend the pause again — which he did — or decide how he can act on student debt using executive action.Two weeks ago, Biden announced his fourth extension of the student-loan payment pause, with waived interest, through August 31, and while the announcement contained no mention of broad student-loan forgiveness, many Democratic lawmakers and advocates are hoping that will be the next step the president takes to address the growing $1.7 trillion crisis. And while both Democratic and Republican lawmakers were critical of the additional relief — the GOP did not want another extension and Democrats wanted a longer one — some leading lawmakers are appearing optimistic about what might be next. Senate Majority Leader Chuck Schumer said during a virtual summit last week that he has talked to Biden frequently about student debt relief, and those conversations are making an impact."We're working on it," Schumer said. "We're making progress, folks. We are making progress. The White House seems more open to it than ever before."Over past months, the messaging from the White House on student-debt relief has remained fairly consistent. Psaki told reporters on numerous occasions that if Congress sends Biden a bill to cancel student debt, he will happily sign it, but earlier this month, she noted that Biden "has not ruled out" using executive action to cancel student debt.Even so, it appears unlikely that Biden will wipe out the whole student-debt load if he does choose to use his authority. Psaki told Fox News last week she suspects borrowers will have to make payments "at some time" during the Biden administration, dashing many Democrats' hopes of full cancellation.But at this point, lawmakers just want to see progress made. Massachusetts Sen. Elizabeth Warren, who championed the $50,000 student-debt cancellation proposal, was one of the nearly 100 lawmakers who recently called on Biden to cancel "a meaningful amount" of student debt, and she recently told Insider "the President has the clear legal authority to cancel student debt and it's long past time for him to act on meaningful loan forgiveness."Read the original article on Business Insider.....»»

Category: personnelSource: nytApr 18th, 2022

How the last 20 years of economic turmoil broke millennials

Millennials are part of a "vast and accidental social experiment," one expert said. We've never seen a generation "with so much financial baggage." Millennials have been shortchanged by the economy.Noam Galai/Getty Images Millennials have been carrying around economic baggage since the Great Recession. While some are faring financially well, others have faced a host of challenges. Student debt, a housing crisis, and now inflation, are just a few of their economic woes. Millennials just can't catch a break.The generation, made up of people turning ages 26 to 41 this year, has long had a notorious bout of bad economic luck. Although they've been subject to the narrative of a frivolous generation who prefers to blow money on avocado toast, the reality is that their entrance into adulthood has been shortchanged by the economy."In a way, millennials are part of a vast and accidental social experiment," Kenan Fikri, the director for research at the Economic Innovation Group, previously told Insider. "We've never launched an entire generation with so much financial baggage." He added that they're unique because they graduated into the throes of the Great Recession. From there, they became saddled with student-loan debt and soaring living costs only to stare down their second recession before the age of 40. Now, as they enter a life stage filled with big spending, their finances are marred by inflation.Of course, not all millennials fit this bill. Some millennials, which generational researcher Jason Dorsey has dubbed "mega-llennials" for the "outsized advantage" they have over their less fortunate peers, don't identify with the negative stereotypes associated with their generation because they feel ahead of the game."It's almost like they got a head start," Dorsey told Insider, referring to the subset of millennials who don't fit the traditional media narrative of their generation. "They've been working and doing normal work-related stuff, but often are not getting attention for it." But the average millennial feels behind in their career and finances. Here's a complete timeline of all the economic dominoes that have fallen on their path to financial stability.2007: The financial crisis hits when the oldest millennials were age 26. They bore the true brunt of the recession, entering a tough job market and experiencing wage stagnation.Andia/Getty ImagesThe financial crisis of 2008 left no generation untouched: Silent, boomer, and Gen X households all experienced wealth loss. But "older millennials were squarely hammered," Mark Muro, a senior fellow and policy director at the Brookings Institution, previously told Insider."Millennials have lifelong damage, given the severity of the Great Recession," he added.The Great Recession split the generation down the middle, between the older millennials who walked into a dismal job market and younger millennials who experienced the recovery period and became risk-averse by watching the recession unfold.Coming of age in an era of slower economic growth has made it less possible for millennials to establish a solid career foundation and build wealth, Ernie Tedeschi, a managing director and policy economist for Evercore ISI, told Insider. "This has consequences for individual career prospects and affects their sense of dynamism," he said.It was a rocky start to adulthood. Research shows that those who graduate during a recession could see stagnation in financial growth for up to 15 years. A St. Louis Fed report found that nearly a decade later in 2016, people born in the '80s had 34% less wealth than they likely would have if the financial crisis hadn't occurred.But the recession also exacerbated a number of other problems millennials would soon have to deal with.  2012: Student debt crosses the $1 trillion threshold after exploding during the Great Recession, making it that much harder for millennials to save money.Bebeto Matthews/AP PhotosThe financial crisis intensified America's rising student-loan debt burden: graduates had less money to pay off their loans; more millennials enrolled in graduate school during a slow economic recovery, adding to their debt totals; and colleges hiked tuition prices due to lack of state funding. In the 2010s, college tuition more than doubled since the 1980s."Prior generations started building wealth right as they hit the labor market," Fikri told Insider. "By contrast, college-bound millennials spent the first decade of their careers digging out of debt."In a 2019 Business Insider Intelligence survey of more than 2,000 millennials, 60% of respondents said they took out a student loan for undergraduate or graduate education — and 43% owed between $10,000 and $49,999 at graduation."My student loans have been the center of my financial world," Daniela Capparelli, who graduated in 2007 with a degree in economics and finance and $150,000 in debt, told Insider two years ago. "I have always felt a huge weight on my shoulders because of this astronomical financial burden."Fikri described college as a "millennial Catch-22": Many feel that the ticket to a decent standard of living is a college degree, but going into debt makes it a rather expensive ticket and undermines the value of the degree itself."The burden of student debt relative to income and available opportunities keeps them trapped in a sort of limbo that's financially, emotionally, socially, and economically damaging," he said. 2017: As wages stagnate, cost of living gets out of control. The average housing price across US cities becomes more expensive than they were right before the Great Recession.People walk by a sold sign in front of a house along the Erie Canal in Pittsford, New York, on Monday, Sept. 6, 2021.Ted Shaffrey/AP PhotoBetween 1974 and 2017, adults ages 25 to 34 only saw increased earnings of $29 annually, when adjusted for inflation. During the same time period, those ages 45 to 54 saw an income growth of nearly $5,400.Millennials' paltry wage increase hasn't kept up with all the living costs that inflated in the 2010s. Hospital services, college tuition, medical services, and housing all began ticking up past the average inflation around the time of the Great Recession, according to the American Enterprise Institute's famous inflation chart, outpacing the hike in average hourly wages.In early 2017, average home prices across large US cities started to exceed their mid-aughts bubble highs, according to the S&P Case-Shiller Home Price Index. It left the typical millennial renting longer and buying later as they struggled to save for a down payment. By 2018, millennials buying their first home were paying 39% more than boomers did at the same age nearly 40 years ago.With stagnated wages and little wealth built up, millennials' finances were proving no match for the economy.  2020: Before the oldest millennial turns 40, the generation faces their second recession when the pandemic hits.Noam Galai/Getty ImagesBy 2019, the oldest millennials had finally narrowed their 34% wealth deficit. A follow-up St. Louis Fed report found that those born in the 1980s have median wealth levels 11% below older generations at similar ages."It turns out that millennials may not be as 'lost' as we once thought," read the report.But the following year, the pandemic hit. While there isn't enough data yet to determine the exact impact it had on millennials, it was another curveball for the generation. It widened the millennial inequality that dated back to the Great Recession, with wealthier millennials faring well while their low-earning peers are struggling.Millennials who already had lower earnings prepandemic and millennials with children were among those who suffered the most, Christine Percheski, demographer and associate professor of sociology at Northwestern University, previously told Insider. About 40% of millennial parents saw huge increases in hardships, she added, due to increases in food and housing insecurity and mothers cutting back employment hours or quitting work altogether to meet caregiving needs during the pandemic's school closures.  When unemployment peaked in April 2020, 14.5% of Americans ages 25 to 34 were unemployed, according to the Bureau of Labor Statistics. That's higher than the 10% unemployment peak of the Great Recession in 2009. And while some millennials may have escaped job loss, not all skirted past pandemic pay cuts. "I would imagine a lot of people are burning through whatever savings they had as they experienced unemployment," Percheski said. 2021: Just as millennials are ready to buy a house, they get screwed by their second housing crisis in 12 years in which record-high prices box many first-time homeowners out of the market.Newsday LLC/Getty ImagesCome 2021, millennials had finally reached the peak age for first-time homeownership. After spending years saving for a down payment, historically low mortgage rates and the flexibility of remote work enabled them to finally achieve their homebuying dreams.But the demand exacerbated an already shrinking housing inventory that was first fueled by contractors underbuilding homes since the Great Recession, and a housing boom soon became a housing crisis. Starter homes were the biggest victims of the dwindling inventory, as the national median home sale continuously climbed upward before reaching a record high of $386,888 in June 2021. Just as homeownership fell within millennials' grasp, it began to slip out of their fingers again."Now that they have economically recovered and are looking to buy a home for the first time, we're faced with this housing shortage," Daryl Fairweather, the chief economist at Redfin, told Insider last year. "They're already boxed out of the housing market."There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, according to Fairweather.She added that was not enough homes for millennials, who are the biggest generation, to buy.Gay Cororaton, the director of housing and commercial research for the National Association of Realtors (NAR), told Insider homeownership was "going to be more difficult for millennials."It was yet another wealth avenue lost for millennials. 2022: Millennials experience inflation for the first time as it surges to a 41-year-high. Of all age groups, they're impacted the most.All signs point to groceries getting more expensive, or going out of stock.Luis AlvarezInflation hit a 30-year high in November before surging again through March at a 41-year-high. It's the first time millennials have experienced inflation, just as many enter their high-spending years. They're also feeling the effects of it more than any other age group.A study by Wells Fargo analyzed the Consumer Expenditure Survey to determine which cohorts have seen the steepest rise in cost of living. An age breakdown showed that millennials experienced the highest inflation: 6.8% for the 25 to 34 age group and 6.9% for the 35 to 44 group (the latter also includes the youngest Gen Xers). It has a lot to do with their spending habits, as they're shelling out more for big ticket items thanks to the life stage they're currently in.Wells Fargo senior economist Sarah House told Insider that millennials are more likely to spend on used and new cars as well as gas, both of which have seen the steepest rise in prices the year through December. Millennials are also spending more on housekeeping goods and home furnishings since many are buying homes for the first time, House added.Unfortunately for millennials, not much of their spending goes toward the areas that have mostly escaped inflation. "On the other side of the equation, millennials spend relatively less on some of the areas that have seen the slowest rise in prices over the past year, such as healthcare, which has held down inflation rates for other groups more than millennials," House said.The Fed has hinted at raising interest rates in an effort to cool down prices. But that still comes at a cost, in the form of much pricier credit cards and loans. Considering all the big spending involved in millennials' current life stage, it could end up being their next economic challenge.Read the original article on Business Insider.....»»

Category: smallbizSource: nytApr 14th, 2022