Finance
Biden announces a fresh round of $7.5 billion in student loans canceled
The Biden administration announced ]more student loans are eligible for cancellation. (iStock)
President Joe Biden is keeping the ball rolling on student loan forgiveness, canceling a new round of loans as his administration crafts a new plan to target even more outstanding student debt.
The latest round of cancelations targets $7.4 billion in student loans for 277,000 borrowers, the Department of Education said in a statement. This brings the total debt forgiven over Biden’s presidency to $153 billion. The discharges are part of the Saving on a Valuable Education (SAVE) Plan, which offers a faster route to forgiveness.
“Today we are helping 277,000 borrowers who have been making payments on their student loans for at least a decade,” U.S. Under Secretary of Education James Kvaal said. “They have paid what they can afford, and they have earned loan forgiveness for the balance of their loan.”
More people are becoming eligible for student loan cancelation as they hit 10 years of payments. Since the launch of SAVE, nearly 8 million borrowers have received relief, including 4.5 million with a $0 monthly payment. Student loan forgiveness has reached millions even as the Supreme Court blocked Biden’s original debt forgiveness plan last June.
The Biden Administration has also released initial details of a new set of plans that would provide student debt relief to over 30 million borrowers, including the 4 million who have already been approved for debt cancelation over the past three years. The new plan also proposes to eliminate accrued interest for 23 million borrowers and automatically discharge debt for borrowers eligible for loan forgiveness under SAVE, closed school discharge, or other forgiveness programs, even if not enrolled. Additionally, student debt for borrowers who entered repayment for 20 or more years would be discharged.
Private student loan borrowers can’t benefit from federal loan relief. But you could lower your monthly payments by refinancing to a lower interest rate. Visit Credible to speak with an expert and get your questions answered.
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Some borrowers miss out on SAVE
Biden’s SAVE plan could lower borrowers’ monthly payments to zero dollars, reduce monthly costs in half and save those who make payments at least $1,000 yearly. Yet roughly three out of four borrowers who make $75,000 or less annually and would benefit from the SAVE plan still need to be enrolled, according to a recent Student Debt Crisis Center (SDCC) survey.
Part of the problem is the lack of communication between student loan servicers and borrowers, according to the survey. Every student loan borrower is assigned a loan servicer to help them navigate repayment options, including income-driven repayment (IDR), which can make payments more affordable.
More than half of borrowers who contacted their student loan servicers with questions about resuming payments were left with unanswered questions. Moreover, a quarter of borrowers don’t trust the information they get from their servicer, and 75% said the information they got was inaccurate or incomplete.
“As a student loan borrower myself, I know firsthand how frustrating and harmful these communication errors can be, “SDCC Managing Director Sabrina Calazans said. ” Borrowers need more communications coming directly from the Department of Education, given their lack of trust in their respective service providers.”
If you’re having trouble making payments on your private student loans, you won’t benefit from federal relief. You could consider refinancing your loans for a lower interest rate to lower your monthly payments. Visit Credible to get your personalized rate in minutes without affecting your credit score.
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Legal challenges to student loan forgiveness mount
Republican-led states filed suit against President Joe Biden and the U.S. Department of Education to stop the SAVE Plan.
The lawsuit seeks to halt the SAVE plan immediately, arguing that the U.S. Department of Education has no authority to alter student loan repayment plans. This would essentially cancel more than $156 billion in student loan debt. The attorneys general from Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah joined the suit.
The lawsuit also argues that the U.S. Supreme Court ruled that Biden’s original forgiveness program violated federal law and that only Congress can authorize the forgiveness of student loans, which requires spending taxpayer money.
A statement from the Education Department said Congress gave the agency the authority to define the terms of income-driven repayment plans.
If you hold private student loans, you won’t be enrolled in a federal income-driven repayment plan, but you could refinance your loans to a lower rate. Visit Credible to compare options from different lenders without affecting your credit score.
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A living space in the new J.P. Morgan financial center branch format in Palm Beach.
Courtesy: JP Morgan
JPMorgan Chase thinks it has cracked the code on managing more money for America’s millionaires.
It’s not a new financial product, a novel software program or an enticing sign-up bonus. Instead, it’s a refurbished take on an old concept — the brick-and-mortar bank branch — along with new standards for service that are at the heart of its aspirations.
The bank is unveiling 14 of these new format branches — each acquired when JPMorgan took over First Republic in 2023 — in tony ZIP codes in New York, California, Florida and Massachusetts, including Napa, Palm Beach and Wellesley Hills.
It’s part of JPMorgan’s push to convince affluent Americans, many who already use Chase checking accounts or credit cards, that the bank is ready to manage their millions.
JPMorgan is the country’s biggest bank by deposits and assets and has a top share in areas as disparate as Wall Street trading and retail credit cards. But one of the only major categories where it isn’t a clear leader is in wealth management; peers like Morgan Stanley and Bank of America exceed it there.
While half of the 19 million affluent households in the U.S. bank with JPMorgan, it has just a 10% share of their investing dollars, according to Jennifer Roberts, CEO of Chase Consumer Banking.
“We have this giant opportunity to convince customers to have their wealth management business with us in addition to their deposit relationship,” Roberts said in a recent interview.
Helped by its acquisition of First Republic, which was known for catering to rich families living on either coast, JPMorgan decided to launch a new tier of service. Called J.P. Morgan Private Client, it is anchored by the new physical locations, of which there will be 31 by the end of next year.
The service comes with its own mobile banking app, but its main appeal is the in-person experience: Instead of being handed off to multiple employees like at a Chase branch, J.P. Morgan Private Client members are assigned to a single banker.
“What First Republic did really well was deliver a concierge-level of service where if you have an issue, a person owned it for you and you didn’t have to worry about it,” Roberts said. “So with this experience we are going to deliver a more elevated concierge type of service, like you would expect at a high-end hotel.”
The price of entry: at least $750,000 in deposits and investments, though Roberts said the bank is aiming for those with around $2 million to $3 million in balances.
Quiet opulence
The new locations, dubbed J.P. Morgan Financial Centers, have a warm feel and an earth-tone color palette that intentionally sets them apart from the nearly 5,000 Chase branches operated by the bank.
During a recent visit to a Manhattan location, the vibe is family office-meets hotel, with soaring ceilings, living room-style seating areas and art-filled meeting rooms scattered over two floors.
Gone is the traditional row of bank tellers; there is instead a concierge desk and a solitary ATM machine. Instead of lollipops, visitors are offered squares of Dylan’s chocolate. The space is quiet, except for the crack of a Perrier being opened or the whir of an espresso machine.
JP Morgan’s Palm Beach Reception.
Courtesy: JP Morgan
The design elements and hushed environment are “really meant to illustrate that we’re there to have a more serious, less-transactional conversation about your wealth planning over the course of time,” said Stevie Baron, JPMorgan’s head of affluent banking.
Those conversations involve planning for long-term goals and examining clients’ portfolios to see whether they are on track to reach them, he said.
Elements of the new high-end branch format could find their way to regular Chase branches, especially the 1,000 or so that are in high-income areas, Baron said.
JPMorgan executives have said the bank’s branch network has already succeeded as a feeder into the firm’s wealth management offerings.
The new service tier — which sits above the bank’s Chase Private Client offering, which is for those with at least $150,000 in balances and is delivered in the regular branches — is expected to help JPMorgan’s retail bank double client assets from the $1.08 trillion it reached in March.
“Obviously it’s a big challenge, because clients already have their established wealth managers, but it’s something that we’ve been making really strong progress in,” Roberts said.
Come one, come all
But attempting to create a new, more luxurious brand from a mainstream one — think the difference between Toyota and its luxury brand Lexus — is not without its risks. Or at least, momentary confusion.
So far, the two flagship financial centers in New York and San Francisco opened late last year haven’t seen heavy foot traffic, Roberts admitted.
“Our biggest challenge is that we don’t have people walking in because they don’t really understand what they are,” Roberts said. “So we just need to get the awareness out there.”
While JPMorgan is leaning on the first part of its name, rather than Chase, to signal exclusivity for the new branches, that may deter people from walking through the doors and starting conversations.
“I just want this to be acknowledged: We’re never going to turn someone away. Any customer can come and leverage any of our branches at any time,” Roberts said.
“We want people walking in, having the experience, meeting with our experts and understanding how we can help support their financial goals over time,” she said.
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