Accounts – Sneer Wed, 23 Nov 2022 14:53:00 +0000 en-US hourly 1 Accounts – Sneer 32 32 India’s SBI aims to keep net bad debt ratio below 1% Wed, 23 Nov 2022 14:53:00 +0000

MUMBAI, Nov 23 (Reuters) – State Bank of India (SBI.NS)the country’s largest lender, plans to maintain its current pace of credit growth while aiming to keep its net non-performing asset ratio below 1%, its leader said on Wednesday.

After announcing results for the June-September quarter earlier this month, the bank said it expects credit growth of 14% to 16% for the current fiscal year as it steps up its efforts to attract deposits.

According to the latest central bank data, as of November 4, Indian banks recorded overall credit growth of around 17%, while deposit growth stood at 8.25%.

“As long as the risk is understood and properly assessed, there is no challenge (to sustaining loan growth),” SBI Chairman Dinesh Kumar Khara told reporters.

“This time the growth comes at a time when companies are deleveraging. It also gives us confidence that the path we are on is sustainable.”

SBI has a term loan portfolio of 2.5 trillion rupees ($30.6 billion) and expects demand from all sectors, Khara said.

The lender’s net non-performing assets (NPA) ratio fell to 0.8% in the June-September quarter.

Khara said the bank hopes to further reduce bad loans and keep the ratio below 1% in the future.

($1 = 81.7600 Indian rupees)

Reporting by Nupur Anand, writing by Sudipto Ganguly; edited by Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

2019 pardon lawsuit settled and $6 billion awarded Thu, 17 Nov 2022 19:47:36 +0000

BrianAJackson/Getty Images/iStockphoto

As the Biden administration sweeps student loan forgiveness program is still stuck after a Texas federal court judge ruled it “unlawful” last week, there has been some traction in a separate but related case.

Student loans: Will Biden extend repayment pause as relief program stalled?
Discover: 5 things you need to do when your savings hit $50,000

Late on Wednesday, November 16, Federal Judge William Alsup moved to approve a settlement in an ongoing lawsuit related to the Borrower Defense Program. It will provide a total of $6 billion to 200,000 borrowers of federal student loan funding.

The class action lawsuit, Sweet v Cardona (formerly Sweet v DeVos), was first filed in 2019 when Donald Trump was president. He accuses the Department of Education during his tenure (led by former Secretary Betsy DeVos) of “failing to process their borrower defense requests through to reimbursement,” Business Insider reports. Of course, this position is now occupied by Miguel Cardona, hence the name change of the business.

The Borrower Defense Scheme was first instituted by the government in late 2016, per Inside Higher Ed, allowing borrowers who thought they had been “scammed” by their college or university the opportunity to apply for repayment of their student loans.

As noted by Forbes, applicants could seek cancellation of a federal student loan if they could prove that they “had been misled into enrolling or remaining enrolled at an institution by false statements or false promises on key aspects of their program. This might have been related to job prospects, the admissions process, or transferring credits from previous schools they were enrolled in.

However, the class action lawsuit came after the Trump administration delayed or denied qualifying claims without cause, and because it was never settled, it continued into the Biden era once he took office in 2021.

This week’s decision approving the settlement proposed by the current White House (originally introduced in June) is being hailed as a “historic” decision, according to Forbes, as it is one of the most important agreements to today granting refunds and cancellations to student loan holders.

“This order finds that all class members, including our named plaintiffs, have correctly asserted real and concrete harm resulting from the Secretary’s decision [DeVos] alleged unlawful treatment of their borrower defense claims,” Alsup said of his decision. “The injury is twofold. The undue delay and suspension of the processing of debt relief requests by the secretary directly resulted in specific economic harm to each member of the group. Illegal delay of debt relief leads to obvious monetary damage.

Under the latter provision, anyone who filed a Borrower Defense Claim before June 22 this year and attended one of the 12 institutions deemed fraudulent by the government will receive the money.

Additionally, an additional 64,000 applicants who have not attended the 12 culpable institutions but have a strong case filed will have their documents reviewed and approved or denied on a rolling basis with strict deadlines; if the government does not meet these key dates, the borrower will also receive loan relief or full repayment.

An advocacy group, Project on Predatory Student Lending, states on its website: “Within one year of the effective date of the settlement agreement, these class members will have their outstanding loans relating to these schools fully discharged and will receive refunds of any amounts they previously had. paid the federal government for these loans. They also note that affected borrowers will see repairs to any damaged credit reports due to program barriers.

Take our poll : Do you think student loan debt should be forgiven?

This week’s settlement approval does not affect President Biden’s 2022 program to provide student loan relief to up to 45 million Americans through one-time payments of $10,000 (20,000 $ for Pell grant holders). However, it is hoped that the latest court ruling in favor of the borrowers could influence the final program that will eventually be approved.

More from GOBankingRates

This article originally appeared on Student loans: lawsuit in 2019 for forgiveness settled and 6 billion dollars granted

Federal student loan debt relief was again halted by the appeals court. The Biden Signature plan on hold Mon, 14 Nov 2022 19:43:32 +0000

A federal appeals court has blocked President Joe Biden’s student loan forgiveness program, further dashing the hopes of more than 26 million Americans who applied for the relief, discouraging millions more who were eligible using, and potentially kill the president’s signature program.

The Eighth Circuit Court of Appeals granted an injunction sought by six Republican-led states that argued Biden exceeded his presidential authority when he cited COVID-19 as a national emergency to write off loan debt student of millions of borrowers. The states have also said they will lose future tax revenue under Biden’s plan.

This is the second federal court ruling blocking the program in days. A US District Court blocked the program on Thursday in a different case.

After: US judge in Texas blocks President Biden’s student debt forgiveness plan; appeal lodged

After: In student loan forgiveness lawsuit, 6 states slam Biden for excess

There’s a chance the program could be revived: the administration can appeal the decision to the Supreme Court, though it’s unclear how the court’s conservative majority would rule.

Appeals court overturned lower federal court ruling which governed the six plaintiff states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — failed to establish standing to challenge. The 11-judge panel includes 10 Republican appointees, four of whom were nominated by former President Donald Trump.

Can I still apply for the President’s Student Debt Cancellation Plan?

Court of Appeal ordered a temporary halt from rolling out Biden’s debt cancellation plan to a final decision. The White House has urged student borrowers to seek relief even amid uncertainty.

The department has since stopped taking applications following the outcome of the Texas case.

Other ways to clear debt: With student loan forgiveness stuck in court

After: Federal appeals court temporarily blocks Biden’s student debt relief plan

President Joe Biden speaks about <a class=student debt relief at Delaware State University in October.” src=”–/YXBwaWQ9aGlnaGxhbmRlcjt3PTcwNTtoPTQ3MA–/″/>

President Joe Biden speaks about student debt relief at Delaware State University in October.

Biden signed an executive order in August to grant debt cancellation, fulfilling a campaign promise sought after by young voters and progressives.

Biden created the debt relief plan under the HEROES Act, which was passed after 9/11 sparked a US-led military campaign against terrorism. The law gave the administration the power to cancel student loan debt in association with military operations or national emergencies. The White House has cited the COVID-19 pandemic as the national emergency.

Under the president’s plan, borrowers would be eligible for debt relief of up to $10,000 or $20,000, depending on their income and whether they received a Pell grant while in college. Borrowers must earn less than $125,000 per year or reside in households that earn no more than $250,000. As many as 40 million people would be eligible for Biden’s plan, and some would have their entire balance wiped out.

‘Debts and no diploma’: Biden forgives up to $20,000 in student loan debt

What the court said

States have questioned this authority and argued that they will lose money in future tax revenues and through quasi-state agencies that deal with student loans.

The Eighth Circuit specifically upheld the states’ legal status. The district judge in the case previously dismissed the case on those grounds, and legal critics said proving quality would be the biggest hurdle for those seeking to block the president’s debt relief plan.

The judges accepted the state’s argument that the quasi-state student loan service, MOHELA, would suffer from the president’s plan to forgive billions in debt and it would affect the state of Missouri.

“This unforeseen financial downturn will prevent or delay Missouri from funding higher education at its public colleges and universities,” the judges wrote. “Because of MOHELA’s financial obligations to the state treasury, the contested student loan debt forgiveness presents threatened financial harm to the State of Missouri.”

The federal government had sought a limited injunction in its response to the appeals court. The judges also rejected this request.

“Given MOHELA’s national role in servicing accounts, we see no workable path in this emergency posture to reduce the scope of relief,” they wrote. “And beyond Missouri, tailoring an injunction to remedy alleged harms to the remaining states would involve delving into complex issues and disputed facts that would make any limit uncertain in its application and effectiveness.”

In an October letter to Missouri Rep. Cori Bush, a Democrat, MOHELA wrote that its leaders were “not involved in the Missouri Attorney General’s Office’s decision to file a preliminary injunction petition in court. Federal on September 29, 2022”. They added that the repairer was “faithfully performing its obligations under its Federal Loan Service Agreement.”

“As a government entity, it has no shareholders and does not exist to make a profit,” the loan manager wrote. “All available funds beyond operating needs and reasonable reserves are dedicated by MOHELA for student financial aid.”

What might happen if the Biden administration appeals?

It is difficult to predict how the highest court in the land would react if the Justice Department appealed. Conservative justices outnumber liberals 6-3.

But the Supreme Court has twice beaten further lawsuits to stop debt forgiveness.

After: Supreme Court Justice Barrett dismisses second challenge to Biden’s student loan forgiveness program

This article originally appeared on USA TODAY: Biden student loan forgiveness update: Another court blocks plan

Aggregate claim for interest on home loan limited to Rs. 2,000,000 Sat, 12 Nov 2022 03:21:26 +0000

I am staying in a rented house in Mumbai. I have an apartment in Jaipur, which is rented and for which I pay equivalent monthly installments (EMI) on my mortgage. Now I have booked another apartment in Mumbai which is due for possession in March 2025. I have taken out a home loan and borrowed from my wife for the apartment in Mumbai. We are planning to stay in Mumbai apartment. Can I also apply for Mumbai house tax benefits?

Answer: For the rented apartment in Jaipur, you are entitled to claim a deduction at the rate of 30% of the rent you received, in addition to the regular interest you paid.

For the second house, which is still under construction, you will be able to benefit from tax advantages from the year of completion and possession. You will be able to claim the total interest paid during the construction period in five equal installments beginning in the year in which construction is completed and possession is obtained. Since you will be staying in the house, the aggregate claim amount for interest paid to your wife and the bank will be limited to Rs. 2 lakh including one-fifth of the interest paid during the construction period. Note that you cannot offset losses under “main income from home ownership” beyond Rs 2 lakh per annum, whether you own one house or multiple houses. The unabsorbed loss is allowed to be carried forward for eight years for offset against income from home ownership only.

For the repayment of the principal of the home loan to the bank, you can claim tax benefits under Section 80C of the Income Tax Act 1961 up to Rs. 1.5 lakh every year for all the houses taken together.

For Mumbai apartment, you will be able to claim it from the year of completion of the house along with other qualifying items such as the Public Provident Fund (PPF), the savings scheme linked to the equity (ELSS), National Savings Certificate (NSC), life insurance premiums, etc.

Note that you will not be able to claim any tax benefit in respect of the repayment of the mortgage, if any, granted to the bank for the years during which the construction of the house was not completed. No tax benefit is available with respect to the repayment of the loan taken out with your spouse.

I received compensation of Rs. 1 crore for my ancestral farmland, which I used for farming, and which has now been acquired by the government of Rajasthan. The documents were signed on April 30, 2022. I plan to buy another agricultural land within two years. Can I claim a tax exemption on the agricultural land that I will buy?

Answer: First you need to check whether the land was farmland within the meaning of the Income Tax Act 1961. You need to have it reviewed by a chartered accountant based on the location and population of the area where the land is located. If it falls under the definition of “farmland”, you are not subject to income tax on the compensation received.

If the land is not agricultural land within the meaning of income tax, you can still claim the long-term capital gains exemption, if the land has been used for agricultural purposes during of the last two years, either by you or your parents, provided that you invest the capital gains for the purchase of other land to be used for farming within two years of the transfer date.

The land being an ancestral property, it is unlikely that you know its acquisition cost.

You can therefore take the fair market value of this land on April 1, 2001 as the cost price. You can calculate your long-term capital gains by applying the cost inflation index to fair market value on April 1, 2001.

Note that if you are unable to purchase this new land for farming purposes before the deadline for filing your return, i.e. July 31, 2023, you must deposit the amount of the gains in indexed capital into the capital gains account with a bank which you can use to buy the land for farming later.

The author is a tax and investment expert

(Disclaimer: The opinions expressed are those of the author and Outlook Money does not necessarily subscribe to it. Outlook Money will not be responsible for any damage caused to any person/organization directly or indirectly.)

NC man pleads guilty to COVID-19 loan fraud Wed, 09 Nov 2022 19:01:07 +0000

GREENVILLE, NC (WNCN) — A Cary man has pleaded guilty to a multi-million dollar fraud scheme, U.S. Attorney Michael Easley said in a statement.

Quentin Allen Jackson, 56, pleaded guilty on Wednesday to “conspiracy to commit money laundering with respect to the fraudulent proceeds of the Paycheck Protection Act.”

Jackson worked with others to obtain fraudulent Paycheck Protection Program (PPP) loans from several companies that are “under Jackson’s control,” according to Easley.

After Jackson received the PPP loans, he worked with co-conspirators to make it look like he was “paying payroll every two weeks” to employees, but these people weren’t working for the companies or “they don’t were not actually earning salaries comparable to what was represented in the loan applications.

Jackson then told those receiving the checks “to cash the checks and then return the illicit money to him.”

Jackson also served as an intermediary for his co-conspirators, Easley said. He earned a commission for “each additional fraudulent borrower he recruited”.

And he recruited more than 12 people who got fraudulent PPP loans.

“The defendant took money intended to help struggling small businesses during the pandemic,” Easley said. “We will vigorously pursue criminals who lined their pockets with taxpayers’ money as the pandemic crippled local businesses.”

Jackson and his co-conspirators took nearly $4 million in fraudulent PPP loans, Easley said.

Jackson is expected to be sentenced next year.

Moving Forward: Student Debt Relief Sat, 05 Nov 2022 21:08:00 +0000

The United States Department of Education currently offers federal student debt relief. The program offers eligible borrowers full or partial loan release of up to $20,000 for Federal Pell Grant recipients and up to $10,000 for non-Pell Grant recipients. Pell grants are available to low-income students based on their FAFSA.

Applications can be completed at The application takes about five minutes to complete. This is one-time debt relief. Applications opened earlier in October and will close on December 31, 2023. You do not need to provide any documents when applying, but the Department of Education may contact you for more information.

Not everyone is eligible for student loan forgiveness. First, there is an income limit. A person must have earned less than $125,000 in 2021 or 2022, from your IRS Form 1040. For families, the maximum income limit is $250,000 in 2021 or 2020.

People also read…

Private loans (from financial institutions, not the federal government) are not eligible for debt relief.

Debt relief only applies to loan balances you had before June 30, 2022. This includes Direct Loans (William D. Ford), FFEL Loans (Federal Family Education Loans), Perkins Loans, and Parent or Graduate PLUS Loans. Loans may or may not be subsidized by the government.

Any new loans disbursed (when loan funds have been received) on or after July 1, 2022 are not eligible for debt relief.

Federal loans in default (overdue) are also eligible.

Consolidation loans are a bit more complicated. This means that several loans have been combined so that a person only has to make one monthly payment. Federal student loan consolidation combines multiple federal loans into one federal loan through the Department of Education. These loans are eligible for the debt relief program.

Private lenders offer private student loan consolidation, also known as student loan refinancing. It’s a good idea to bundle private loans into one of these programs to lower interest rates and move to one monthly payment. These loans are NOT eligible for the debt relief program.

Private loans cannot be transferred to the federal government, but federal and private loans can be consolidated with a private lender. If you did this, you lost the opportunity to get debt relief on the federal loan. The Department of Education is still negotiating with private lenders to see if this can be changed, so people who have this type of consolidated loan should be careful that this is resolved.

Another complication is that there was a pause in payments during the COVID pandemic. From March 13, 2020 to December 31, 2022, borrowers did not have to make student loan repayments. If you made payments on your federal student loans during this time, the government will refund what you paid and forgive your loan up to the maximum amount of debt relief. can provide assistance in completing the online form or answering questions related to a borrower’s specific situation. Contact the agency at 1-833-932-3439.

The Department of Education has issued several warnings about scams from companies offering to help you manage your loans or application for a fee. You NEVER have to pay for aid with your federal student aid. As with all scams, you would be asked for personal information and passwords. DON’T! If the government tries to contact a borrower, it will send an email from, noreply@debtrelief.studentaid.govWhere

Interest rates on bank deposits and loans: September 2022 Thu, 03 Nov 2022 11:18:32 +0000

03/11/2022 – Press releases

– The weighted average interest rate on new deposits remained unchanged at 0.04% in September 2022, while the weighted average interest rate on new loans increased to 4.60%.

– The interest rate differential between new deposits and loans increased to 4.56 percentage points.

– The weighted average interest rate on outstanding deposits remained virtually unchanged at 0.04%, while the weighted average interest rate on outstanding loans increased to 3.95%.

– The interest rate differential between outstanding deposits and loans increased to 3.91 percentage points.

1. Interest rates on new deposits and loans denominated in euros

New deposits
The weighted average interest rate on new deposits remained unchanged at 0.04%.

In particular, average interest rates on overnight deposits placed by households and non-financial corporations remained unchanged at 0.03% and 0.01%, respectively. The average interest rate on household deposits with a duration of less than or equal to 1 year increased to 0.14% against 0.11% the previous month.

New loans
The weighted average interest rate on new loans to households and non-financial corporations increased by 60 basis points to stand at 4.60%.

More specifically, the average interest rate for consumer loans with no defined maturity (a category that includes credit cards, revolving loans and overdrafts) remained unchanged at 14.11%.

The average interest rate on variable-rate fixed-term consumer loans fell by 24 basis points to 10.96%. The average interest rate on variable rate mortgages increased by 49 basis points to 3.50%.

The average interest rate on new business loans with no defined maturity increased by 45 basis points to 4.37%. The matching rate on loans to individual entrepreneurs increased by 15 basis points to 6.62%.

In September 2022, the average interest rate on variable-rate fixed-term corporate loans increased by 97 basis points to 3.97%. The average interest rate on variable-rate fixed-term loans to small and medium-sized enterprises (SMEs) increased, compared to the previous month, by 66 basis points to 4.17%.
As regards the structure of interest rates according to the size of the loans granted, the average rate on loans up to €250,000 increased by 58 basis points to 5.31%, on loans over of €250,000 and up to €1 million increased by 60 basis points. points to 4.18% and on loans over €1 million increased by 109 basis points to 3.93%.

2. Interest rates on outstanding deposits and loans denominated in euros

The weighted average interest rate on outstanding deposits (including sight deposits) remained virtually unchanged at 0.04%.

In particular, the average interest rate on outstanding deposits with a duration of less than or equal to 2 years placed by households remained virtually unchanged at 0.09%, while the corresponding rate on deposits from non-financial corporations rose 4 basis points to 0.16%. .

The weighted average interest rate on outstanding loans increased by 31 basis points to 3.95%.

In particular, the average interest rate on outstanding home loans over 5 years increased by 43 basis points to 2.73%. The corresponding rate on consumer and other loans to individuals and private non-profit institutions increased by 17 basis points to 6.64%.

The average interest rate on business loans over 5 years increased by 22 basis points to 3.37%. The matching rate on loans to sole proprietors increased by 33 basis points to 4.72%.

Table 1: Average interest rates on new deposits and loans denominated in euros (percentages per year)

July 2022

August 2022

September 2022


Household overnight stay




Overnight of non-financial corporations




Households with an agreed maturity of up to 1 year




Weighted average rate on all deposits





Consumer without defined maturity




Company without defined maturity




Individual entrepreneurs with no defined maturity




Variable rate housing




Consumer with a defined variable rate maturity

11:33 am

11:20 a.m.


Corporate with defined maturity at variable rate:




– amounts up to €250,000




-amounts over €250,000 and up to €1 million




-amounts over 1 million euros




Variable Rate Small and Medium Business Fixed Term Loans




Weighted average rate on all loans




Interest rate spread




Table 2: Mediuminterestratesonexceptionalthe amountsof denominated in euros depositsandloans (percentages per year)

July 2022

August 2022

September 2022


Households with an agreed maturity of up to 2 years




From non-financial corporations with an agreed maturity of up to 2 years




Weighted average rate on all deposits





Housing with more than 5 years of maturity




Consumer and other loans to individuals and private non-profit institutions with a term of more than 5 years




Company with more than 5 years of maturity




To sole proprietors with a maturity of more than 5 years




Weighted average rate on all loans




Interest rate spread




1. The interest rate spread is the difference between the weighted average rate on all loans and the weighted average rate on all deposits.
2. For the calculation of the weighted average interest rate on all outstanding deposits, demand deposits are also taken into account.
3. Floating rate loans also include loans with an initial rate fixation period of up to one year.
4. New business refers to new contracts that were entered into during the reporting month and not actual loan disbursements.

Related Information:
The full set of data on interest rates on bank deposits and loans is published in the subsection “Interest rates on bank deposits and loans” on the Bank of Greece website.

The next October 2022 press release will be published on December 2, 2022 according to the publication schedule on the Bank of Greece website.

Related links:
Bank deposit and loan interest rates

Release calendar

Lucas Johansen injured; Alex Alexeyev continues to condition his loan Sun, 30 Oct 2022 22:14:14 +0000

The Washington Capitals face quite a few injuries on the main roster, and their AHL affiliate Hershey Bear are also a bit banged up.

Defender Lucas Johansen is out of line-up with an undisclosed injury, with striker Ethen Frank. Meanwhile, Alex Alexeyev is back for the second game of his AHL conditioning loan.

The 24-year-old was set to crack the Capitals roster on opening night and was the last fringe defenseman left in camp. However, he didn’t make the cut. The team stayed with matt irvin as the seventh defender and ran with 14 forwards. He faced a myriad of injuries and adversity during his young career, which made it difficult for the first round of 2016 to finally make the jump to the NHL. However, Johansen made his NHL debut last season. Expect him to work towards becoming part of the team’s corps in the near future, as he signed a two-year extension with the organization this offseason.

Johansen just played his 200th game in the AHL and has one goal in six games this season. In 201 AHL games, “LuJo” has 18 goals and 56 assists for 74 points and a minus-4 rating.

LEARN MORE ABOUT WHN: Aliaksei Protas ‘not happy’ with start to season, wants Washington Capitals’ trust

Meanwhile, Alexeyev is still working on his path after suffering shoulder surgery this offseason. The 22-year-old made his AHL debut on Friday, posting a minus-1 differential. He is plus-1 so far in Sunday’s game against the Lehigh Valley Phantoms.

The plan is for Alexeyev to return to play with the Bears and then join Washington. It requires waivers to be sent. so he’ll probably get a peek when he gets back to full fitness. His return is welcome as the team awaits an update on John Carlsonthe status of. The No.74 went down with a lower back injury early in Saturday’s win over the Nashville Predators.

In addition to Carlson, the Capitals are also awaiting news on TJ Oshiewho also left Saturday’s game with a lower body injury. Nicklas Backstrom (hip resurfacing surgery), Thomas Wilson (ACL surgery), Carl Hagelin (hip surgery) and Connor Brown (lower body) are all equally on the shelf.

Welcome to your new home for the latest Washington Capitals news, analysis and opinion. Like us on Facebookfollow us on Twitterand don’t forget to subscribe to WHN+ for all of our member-only content on Sammi Silber and the National Hockey Now Network.

Cancellation of loans will fuel inflation Thu, 27 Oct 2022 23:50:23 +0000

Opposition to President Biden’s efforts to cancel student loans has largely focused on his constitutional issues and unfairness.

The president is overstepping his authority by taking action that should be reserved for Congress. The courts will have to decide this question.

There are also objections to the fairness of his action. Why should those who have not attended college, or those who have not borrowed to get by, or those who have repaid their loans subsidize those who have knowingly assumed this financial obligation?

But there is at least a third point to consider. By trying to help more than 40 million borrowers — including a sizable percentage who earn enough not to need help — Biden could make inflation worse for everyone.

The cause of the current price rise, the highest in 40 years, is clear. The government has gone too far in its disaster relief during the COVID-19 pandemic. At the start of the crisis, the money Washington poured out to individuals and businesses was needed to prevent a total collapse of the economy. But the government kept it going even after the economy began its fairly rapid rebound, including enacting an additional $1.9 trillion package in the first months of Biden’s presidency.

With so much money to spend and disrupted supply chains, it has produced exactly what the law of supply and demand has proven time and time again: when demand exceeds supply, prices rise and they do not fall until this balance is reversed.

Student loan forgiveness, if not stopped by the courts, will slow this correction. This will add about another $400 billion in purchasing power. This means that instead of borrowers making a monthly payment on their student loans, they will have that extra cash to spend on travel, consumer goods, restaurants, and anything else money can buy. This will create additional upward pressure on prices and hamper the Federal Reserve’s efforts to control inflation by raising interest rates.

The likely result: more inflation and even higher borrowing costs.

Of course, there will be some who will come out of it positively. The amount of their debt forgiveness will exceed the extra they will have to pay for goods and services. But for most Americans, including some whose student debt has been erased, their situation will be worse than if the president had done nothing.

Student borrowers should always seek relief, says Cardona Mon, 24 Oct 2022 06:15:00 +0000


The Biden administration is moving “full speed” in preparing to implement its plans for widespread student debt cancellation, Education Secretary Miguel Cardona said on Saturday, a day after a Federal Court of Appeals temporarily blocked the immediate cancellation of the loans.

Cardona called the lawsuits to block President Biden’s debt relief package “baseless”, saying in a video posted on Twitter that the administration was “undeterred”.

Biden’s plan met its first substantive hurdle Friday night, when the United States Court of Appeals for the 8th Circuit granted an administrative reprieve for one of the lawsuits filed by six Republican-led states. The administrative stay is not a decision on the merits of the case, but rather a temporary pause until the court decides whether or not to grant an injunction.

Until Friday, it had appeared that the Biden administration was staying away from legal challenges targeted by Republicans against its debt relief plan. A U.S. District Judge had on Thursday dismissed the States lawsuit for lack of standing, the same day Supreme Court Justice Amy Coney Barrett denied a separate trial by a conservative legal institute on behalf of a taxpayer association, which argued that Biden does not have the power to waive debt so broadly and that debt relief was unconstitutional.

The group, Wisconsin Institute for Law and Liberty, had previously argued in a lawsuit filed in the U.S. District Court for the Eastern District of Wisconsin that the loan forgiveness was unconstitutional, in part because its goals of reducing the racial wealth gap amounted to an “inappropriate racial ground.

However, the group dropped the race-related part of its argument in its Supreme Court petition. District Judge William C. Griesbach dismissed the lawsuit for lack of standing.

The six Republican-led states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – argued that debt relief would lead to lower revenue from loans that were due to be forgiven. Judge Henry E. Autrey of the U.S. District Court for the Eastern District of Missouri wrote in his order that concerns about the loss of tax revenue were “merely speculative”.

In a editorial published in USA Today on Saturday, Cardona took issue with the Republicans’ argument, saying they did not dispute the billions of dollars in pandemic relief for business owners in their states, with tax cuts for high income or with loan forgiveness who helped Republican Members of Congress. “It’s only when relief goes to American workers and middle classes that these elected officials have a problem,” he wrote.

Despite the lawsuits, Cardona has encouraged eligible borrowers to apply for relief as the Department of Education moves “at full speed in preparations for the legal implementation of our program so that we can provide relief to borrowers who need it most,” he wrote.

In August, Biden announced his intention to forgive up to $10,000 in federal student debt for those earning up to $125,000 or up to $250,000 for married couples. Pell Grant recipients are eligible for an additional $10,000. Requests for relief are open until the end of next year, although the administration has encouraged borrowers to apply earlier in the hope cancellations could hit accounts before a break expires on student loan repayments on December 31.

University of Alabama law professor Luke Herrine, who has argued the president has the power to write off student debt on a large scale, said debt relief could still come soon despite the federal appeals court hurdle. Herrine said that while the appeals court’s decision was uncertain, “I would expect her to affirm the district court’s decision” against the Republicans’ lawsuit.

He said he expected a decision from the appeals court “at least within a few weeks” given that the suspension was “an urgent request”.

Borrowers seeking relief should still apply despite the legal noise, he said. “If you get your app now, you’re more likely to get relief,” Herrine said. “There is no harm in applying,” he added.

Danielle Douglas-Gabriel and Kelly Kasulis Cho contributed to this report.


This story has been updated to reflect that the lawsuit filed in U.S. District Court by the Wisconsin Institute for Law and Liberty included arguments that President Biden’s debt relief package had a “motive racially inappropriate,” but that the group deleted that part of its argument in its Supreme Court petition.