Gaoodgle Tue, 10 Aug 2021 21:14:24 +0000 en-US hourly 1 Gaoodgle 32 32 Student loan companies spend millions on lobbying for extended moratorium on loans • OpenSecrets Tue, 10 Aug 2021 21:05:24 +0000
(Photo by Drew Angerer / Getty Images)

Student loan companies have spent more than $ 6 million on lobbying in the past year and a half as lawmakers continue to try to ease the student debt crisis.

President Joe Biden announced on Friday that the government would extend a hiatus on the moratorium on student loans until January 31. Although the Biden and Trump administrations have changed the end date of the moratorium several times, the president has said it will be the final extension.

The Trump administration issued the moratorium, which suspended federal student loan payments and suspended debt collection efforts, at the start of the pandemic. The policy affects more than 36 million Americans, with collective debt of about $ 1.3 trillion, the Associated Press reported.

But several of the top companies that handle federal loans spent more than $ 4 million in 2020 and have already spent more than $ 2.4 million this year on lobbying. These companies profit from getting federal contracts and earn a commission on every loan they service.

Navient Corp, one of the nation’s largest student loan companies, spent more than $ 1.7 million on lobbying efforts in 2020 and has already spent more than $ 970,000 in 2021. The Delaware-based company has also spent more than any other student loan group since 2015..

The student loan company lobbied against the Equity in Student Loan Relief Act, legislation that initially suspended loans and debt collection, in 2020. It also reported lobbying conversations on issues related to the COVID-19 loan relief this year.

Navient has come under scrutiny in recent years for misconduct regarding student loan payments. In March, the company lost a multi-year lawsuit with the Consumer Financial Protection Bureau, which claimed Navient had cost students hundreds of thousands of dollars by directing them to more expensive payment plans that benefited the company.

In the same year as the CFPB lawsuit, Pennsylvania Attorney General Josh Shapiro sued Navient for “engaging in unfair and deceptive loans and failing to come up with proper repayment plans for students.” Navient filed a motion to dismiss the case, but the United States Court of Appeals for the Third Circuit dismissed it last July.

Sallie Mae Corp, a financial institution that offers private student loans, has also spent a lot of money lobbying over the past year and a half. The company, which launched Navient as a separate entity in 2014, spent nearly $ 1.4 million on lobbying last year and has already spent $ 960,000 in 2021.

The company reported lobbying conversations about the Coronavirus Aid, Relief and Security Act, which suspended payments on federal student loans, as well as issues with federal student loan programs as well as private student loans. Sallie Mae has also been involved in lawsuits accusing the company of misconduct in handling loans.

NelNet Inc, another firm that manages federal student loans, has also lobbied against the extension of the student loan moratorium, reporting conversations about the “scope and implementation” of the CARES Act related to debt relief. student loans in 2020 and 2021. The company spent $ 230,000 in 2020 and has spent $ 110,000 so far this year.

Navient, Sallie Mae and NelNet also spent thousands of dollars in campaign contributions. The companies were among the industry’s top five contributors last year, spending a combined total of nearly $ 400,000 on campaign contributions to Democrats and Republicans.

But several Democrats, including Senate Majority Leader Chuck Schumer (DN.Y.), Senator Elizabeth Warren (D-Mass.) And Rep. Ayanna Pressley (D-Mass.), Are using the moratorium to pressure Biden for more changes to student loans. The three politicians issued a statement Friday calling on Biden to use the end of the moratorium as a deadline to write off much of the student debt in the United States, which reached $ 1.6 trillion in 2020.

“While this temporary relief is welcome, it doesn’t go far enough. Our broken student loan system continues to exacerbate racial wealth gaps and dampen our entire economy, ”the three politicians said in the statement. “Canceling student debt is one of the most important actions President Biden can take right now to build a fairer economy and fight racial inequality.”

Although Biden has expressed support for the student loan cancellation, he has made it clear that he has no intention of forgiving it entirely. In February, House and Senate Democrats pushed Biden to write off up to $ 50,000 in student debt by executive order, but the president said he would only excuse $ 10,000 and preferred Congress draft the legislation.

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“Debt has transformed my life”: lawyers vote on suspension of student loans Tue, 10 Aug 2021 20:11:00 +0000 The top of a graduate student’s cap is pictured during his graduation ceremony at UC San Diego in San Diego, California. REUTERS / Mike Blake

  • White House extended moratorium on student loan repayments until January 31, 2022
  • The move will benefit young lawyers, many of whom are struggling with heavy student debt

(Reuters) – Marcella Jayne earns more than $ 200,000 as a third-year litigation partner at Foley & Lardner, a salary she knows is eye-catching to many people.

Yet the monthly student loan payment of $ 2,200 on her $ 180,000 balance – acquired from her undergraduate years and from Fordham University School of Law JD – is more than the rent the single mother of two pays. for his apartment in Manhattan.

“It’s a seemingly absurd position: you can make enough money to be in a very high income tax bracket, but home ownership is completely out of reach,” she told About struggling to repay her loans while looking after her children, one of whom has special needs. “I say this as someone who feels very lucky.”

Jayne is among thousands of lawyers who have benefited from a moratorium on federal student loan payments that began as the pandemic escalated in March 2020, and which the White House announced on August 6 would be extended. one last time, until January 31. , 2022. This freed up money to enroll one of Jayne’s children in a private school and pay for the extra services she needs.

“We were heading for the cliff,” Jayne said of growing expenses for her daughter.

The moratorium on student loan payments and the related 0% interest rate for that period were due to expire on September 31. The extension means that many student loan borrowers will go almost two years with no payment required and without seeing their loan amount increase due to the interest compounding.


The student loan policy is a major problem for lawyers, who earn an average of $ 138,500 in student loans, more than any other field except medicine, according to data from the US Department of Education. MBA graduates, on the other hand, leave campus with an average of $ 59,400 in student loans.

Debt can end up shaping the career decisions of young lawyers, said Jolie Steppe, a research consultant for recruiting firm Greene-Levin-Snyder. Some associates will turn down internal lawyer positions or internships because they can’t afford a pay cut, she said.

“The younger associates seem to be really very aware of the debt. I wasn’t 20 years ago, ”said Steppe, who graduated from New York University law school in 2000 with student loans estimated at $ 200,000, which she has since cut to less than $ 200,000. $ 20,000.

Yet lawyers on the whole have done relatively well during the recession, said Chris Chapman, president of the AccessLex Institute, a nonprofit group that lobbies to make law schools more affordable and accessible. Law firms have not made many layoffs and most courts have resumed operations after brief shutdowns at the start of the pandemic, he said.

Andrew Jack VanSingel, who works as a tax lawyer at a federal government agency, said he felt somewhat guilty about the nearly $ 20,000 advantage he received during the moratorium on loan repayments, noting that he had not lost any income during the pandemic. He will be eligible to have his $ 350,000 student loan balance written off in December through the civil service loan forgiveness program, whereby a borrower’s loan balance is forgiven after 10 years of employment. in the eligible public service.

But VanSingel’s debt load, which rose from $ 210,000 when he graduated from Touro College Jacob D. Fuchsberg Law Center in 2010, has taken a heavy toll on him over the past decade.

“The amount of my debt has transformed my life,” said VanSingel. “Currently, I am not married. I have no children. I don’t own a house. All of those things that I felt like I couldn’t participate in until these loans ran out and / or I made more.

He said he used some of his $ 20,000 in moratorium savings to invest in the stock market and increase his charitable donations.

For Jo Bahn, a 2016 graduate of New York Law School who works at a government agency and lives in Washington, DC, the student loan moratorium has given her growing family a financial breath. Despite a partial scholarship, she graduated from law school with about $ 170,000 in loans, which have since grown to over $ 200,000 due to compound interest. (Bahn’s monthly payments are capped at a percentage of her income, and she also works on remitting civil service loans.)

Not having a monthly loan payment of $ 700 allowed Bahn and her husband to make improvements to the house they bought just before the pandemic started and to pay for child care for their toddler and their four-month-old child, she said.

“The end of the moratorium is certainly going to be a stressor when the student loan payment equals about a week of daycare,” Bahn said. “It’s really the difference in perspective for me. Basically it’s like paying for five weeks of child care instead of four.

At the behest of its younger members, the American Bar Association has made student debt a higher priority in recent months. Its governing body, the House of Delegates, overwhelmingly passed a resolution in February supporting the cancellation of student loans and measures that would make it easier for student loan borrowers to make their monthly payments.

The House of Delegates passed a separate resolution on Tuesday asking the organization to lobby federal lawmakers to make it easier to repay student loans in bankruptcy, which is now extremely difficult to do. This measure is sponsored by the Young Lawyers and Law Students Divisions of the ABA.

Jayne said she was grateful for the temporary stay offered by the moratorium on loan payments, but would like to see more meaningful and permanent changes in student loan policy.

“I feel like it’s a band-aid,” she said of the moratorium. “I want policy changes.”

Read more:

ABA will lobby Congress to relax student loan release in bankruptcy

Young lawyers ask ABA for help with student loan cancellations

ABA Supports Law School Debt Aid and Cancellation for Overloaded Lawyers

Additional reporting by David Thomas

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Speaker Pelosi scores high on student debt forgiveness. Tue, 10 Aug 2021 20:07:09 +0000

This article is co-authored by Veronica Goodman, Director of Social Policy, Progressive Policy Institute.

Many Americans are struggling with high levels of student debt, and the cost of a college education has soared beyond reason. But Nancy Pelosi was right when she recently questioned the wisdom (and legality) of the federal government to write off the $ 1.7 trillion in outstanding student debt.

For several years, progressives like Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, and most recently Senate Majority Leader Chuck Schumer, have pushed for the cancellation of most (and in some cases all of) ) student debt. They point out that the student loan program has placed an unfair burden on Millennials and Zoomers, and that removing that debt burden would free up money for student loan borrowers to spend in the economy.

But such a plan has several flaws in addition to the legal question raised by President Pelosi.

First, there is the issue of fairness. The amount students borrowed to attend college is unreasonable, but should those who borrowed not be held responsible for at least part of the amount they owe? Moreover, isn’t it a better use of taxpayer resources to focus debt relief on those who really need it, and like the Speaker noted “where do we have something that offers an opportunity?” ”

On the other hand, the case for targeted relief is strong. Compared to those who pay out of pocket, people who borrow for degrees are more likely to be low income, black, and have less wealth. These factors make some borrowers particularly susceptible to default, which can lead to deepening poverty and the racial wealth gap. In reality, two thirds of borrowers that the default must relatively low average amount of $ 9,625.

While campaigning for the presidency last spring, President Biden unveiled a plan to forgive a minimum of $ 10,000 per borrower and later said he would submit the plan to Congress for consideration.

That amount could wipe out the debt of 15 million Americans and, together with setting an income threshold for education debt relief, would ensure that the benefits go to low-income households. Without better targeting, debt relief would mainly benefit high-income households, which hold a student third loans and have a greater ability to repay them.

Alternatively, if Congress does not write off the education debt, reforms to the current Income-Based Repayment (IDR) system could provide relief to those struggling to repay their loans. Colleges and universities, which have raised tuition fees beyond the means of most families, should also be asked to help pay down debt for their graduates.

Second, student debt relief is only part of the solution. Policymakers must simultaneously take concrete steps to contain the soaring costs of higher education, or the burden of those costs simply shift from students to taxpayers (70 percent who do not have a college degree to increase their income). Moreover, a massive debt cancellation would send the wrong signal to higher education institutions that would have an incentive to further increase the prices of tuition fees.

Colleges and universities need to come together and commit to lowering tuition fees in the coming years and giving students the opportunity to reduce the amount they have to borrow. This includes the guarantee of a credit of up to two semesters for the successful completion of the advanced internship, the international baccalaureate and college courses taken in high school; and transparent credit transfer from community colleges.

Student loans are a cornerstone around the necks of millions of young Americans, and a burden that must be alleviated. But wiping out all student debt would not only be unfair and costly to taxpayers, it would encourage colleges and universities to keep increasing tuition fees exponentially, avoid making tough decisions about how to cut costs. and, ultimately, weigh on future generations of students. Targeted relief for low-income Americans, coupled with reforms to our existing system and a focus on reducing the cost of higher education, would be a more sustainable and forward-looking approach.

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SBA approves 11 home loans in McLean County following June floods Tue, 10 Aug 2021 19:59:00 +0000

The U.S. Small Business Administration (SBA) said it received more than 50 loan applications from McLean County residents and business owners who suffered flood damage in storms in late June. So far, less than a dozen have been approved.

The SBA has granted $ 427,200 in low-interest long-term loans to 11 homeowners in the county through August 9. This represents almost $ 39,000 per loan. The SBA received 47 mortgage applications.

The SBA has yet to approve commercial loans. She received four applications for business loans.

Janel Finley, public affairs specialist in the SBA’s Office of Disaster Assistance, said some of the loan applications were still under review, but it was not known how many.

The deadline to request compensation for physical damage is September 24. Homeowners and business owners have until April 26, 2022 to apply for loans to cover economic losses.

SBA staff organized a disaster outreach lending center from July 28 through August. 7 at the McBarnes Building in downtown Bloomington to help people with the application process. Loan applications are available on the SBA’s website and at a toll-free number for assistance (800-658-2955).

The McLean County Emergency Management Agency (EMA) estimated that flooding in late June damaged more than 2,000 homes and businesses in the county. This prompted the Pritzker administration to seek a declaration of disaster for the county to get financial aid.

An SBA statement requires that at least 25 homes or businesses in a county have uninsured losses greater than 40%.

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Madison Rental Startup Profitable Raises $ 22.5 Million, Plans to Double Tue, 10 Aug 2021 18:39:46 +0000

Profitable is trying to create a one stop shop for tenants and property managers.

The Madison-based startup is one of the nation’s largest online apartment markets. The rental market, like the residential real estate market, is booming right now and is changing rapidly.

Profitable wants to take online apartment finding from a classified style experience to a one-stop destination with full services to find, visit, apply and sign a lease.

The goal is to create a rental database similar to the multiple listings service for purchasing residential real estate.

“Rental is an old, big industry that isn’t dominated by consumer tech companies,” said Alec Slocum, CEO and co-founder of Profitable. “Most of the businesses here started out as printed brochures. Tenants were poorly served.”