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Biden asks Supreme Court to lift block on student loan repayment plan

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Student loan borrowers enrolled in SAVE won’t have to make payments while the courts decide the program’s fate. (iStock)

President Joe Biden’s administration has asked the Supreme Court to lift a block on the Saving on a Valuable Education (SAVE) plan, which is designed to ease the burden of student loan debt for millions of borrowers.

Biden introduced SAVE after the Supreme Court struck down Biden’s student loan forgiveness plan. The White House said that the 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. Additionally, borrowers with an original balance of $12,000 or less will receive forgiveness of any remaining balance after making 10 years of payments.  

Legal challenges from Republican-led states resulted in a temporary block of the program until the litigation concluded. The 8th Circuit Court of Appeals issued a preliminary injunction blocking the SAVE student loan repayment plan. The block prevents the Department of Education from offering the plan while litigation continues. In the meantime, borrowers enrolled in the SAVE Plan are being moved into forbearance while the Biden administration defends the plan in court.

“We remain committed to supporting borrowers and fighting for the most affordable repayment options possible for millions of people across the country,” U.S. Secretary of Education Miguel Cardona said in a statement. “Already, we’ve approved $169 billion in relief for nearly 4.8 million Americans entitled to relief under various programs, including teachers, veterans, and other public servants; students who were cheated by their colleges; borrowers with disabilities; and more. President Biden, Vice President Harris, and I are committed to fighting for college affordability for all.”

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. 

PRIVATE STUDENT LOAN FORGIVENESS: 7 OPTIONS

Less than half of all borrowers make payments

Roughly 40% of borrowers are current on their student loan payments since they resumed in October following a three-year pause due to the COVID-19 pandemic, according to a recent Government Accountability Office report.

As of January 31, 2024, nearly a quarter of borrowers in repayment (7.3 million) were enrolled in the SAVE repayment plan. Because of the court order injunction, these borrowers will not have to make payments on their student loans while the litigation is ongoing and will not accrue interest on their loans during the forbearance. 

However, the time spent in forbearance won’t count towards Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) forgiveness. PSLF forgives federal student loans after 10 years of qualifying payments, or 120 payments, for borrowers who work full-time for a qualifying government or nonprofit organization. IDR plans have a loan forgiveness benefit after a required repayment term of 20 or 25 years, depending on the plan.

“This injunction, if allowed to stand, would harm borrowers who have dutifully repaid their loans for up to 25 years by denying forgiveness that has been available under law for three decades,” Cardona said.

If you’re having trouble making payments on your private student loans, you won’t benefit from federal relief. However, 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.

HOW MUCH CAN I BORROW IN STUDENT LOANS?

Poll shows fewer adults support debt forgiveness 

According to a recent AP-NORC Center for Public Affairs poll, less than half of Americans (39%) said they supported federal student debt cancellation.  

Americans were more likely to support forgiveness of some or all of a student loan debt in certain situations, like if the borrower was defrauded or misled by their school or in cases where the borrower made on-time payments for 20 years or the loans accrued more interest than originally borrowed.  Other reasons Americans may support debt cancellation is if the borrowers attended school at an institution that left them with a large amount of debt compared to their income or if they are experiencing financial hardship.  

“In recent years, more than a million borrowers who were defrauded by the schools they attended have received debt relief from the government, and the survey shows that forgiveness under such circumstances is supported by a majority of Americans,” University of Chicago Harris School of Public Policy Associate Professor Lesley Turner said. “Although existing forgiveness policies may receive less attention than broad-based student loan forgiveness plans, such as the one overturned by the Supreme Court in 2023, they are an important source of relief for the most vulnerable borrowers – those who took on debt but did not necessarily benefit from their investment in the ways they hoped.”

If you hold private student loans, 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.

HOW TO PAY FOR COLLEGE: 8 STRATEGIES TO SAVE MONEY

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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China’s response to U.S. tariffs will likely focus on stimulus, trade

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Chinese national flags flutter on boats near shipping containers at the Yangshan Port outside Shanghai, China, February 7, 2025. 

Go Nakamura | Reuters

BEIJING — China’s reaction to new U.S. tariffs will likely focus on domestic stimulus and strengthening ties with trading partners, according to analysts based in Greater China.

Hours after U.S. President Donald Trump announced additional 34% tariffs on China, the Chinese Ministry of Commerce called on the U.S. to cancel the tariffs, and vowed unspecified countermeasures. The sweeping U.S. policy also slapped new duties on the European Union and major Asian countries.

Chinese exports to the U.S. this year had already been hit by 20% in additional tariffs, raising the total rate on shipments from China to 54%, among the highest levied by the Trump administration. The effective rate for individual product lines can vary.

But, as has been the case, the closing line of the Chinese statement was a call to negotiate.

“I think the focus of China’s response in the near term won’t be retaliatory tariffs or such measures,” said Bruce Pang, adjunct associate professor at CUHK Business School. That’s according to a CNBC translation of the Chinese-language statement.

Instead, Pang expects China to focus on improving its own economy by diversifying export destinations and products, as well as doubling down on its priority of boosting domestic consumption.

Watch for cascading tariffs as tariffs reroute trade within Asia, says economist

China, the world’s second-largest economy, has since September stepped up stimulus efforts by expanding the fiscal deficit, increasing a consumption trade-in subsidy program and calling for a halt in the real estate slump. Notably, Chinese President Xi Jinping held a rare meeting with tech entrepreneurs including Alibaba founder Jack Ma in February, in a show of support for the private sector.

The policy reversal — from regulatory tightening in recent years — reflects how Beijing has been “anticipating the coming slowdown or even crash in exports,” Macquarie’s Chief China Economist Larry Hu said in a report, ahead of Trump’s latest tariff announcement. He pointed out that the pandemic-induced export boom of 2021 enabled Beijing to “launch a massive regulatory campaign.”

“My view stays the same,” Hu said in an email Thursday. “Beijing will use domestic stimulus to offset the impact of tariffs, so that they could still achieve the growth target of ‘around 5%.'”

Instead of retaliatory tariffs, Hu also expects Beijing will focus on still using blacklists, export controls on critical minerals and probes into foreign companies in China. Hu also anticipates China will keep the yuan strong against the U.S. dollar and resist calls from retailers to cut prices — as a way to push inflationary pressure onto the U.S.

China’s top leaders in early March announced they would pursue a target of around 5% growth in gross domestic product this year, a task they emphasized would require “very arduous work” to achieve. The finance ministry also hinted it could increase fiscal support if needed.

About 20% of China’s economy relies on exports, according to Goldman Sachs. They previously estimated that new U.S. tariffs of around 60% on China would lower real GDP by around 2 percentage points. The firm still maintains a full-year forecast of 4.5% GDP growth.

Changing global trade

What’s different from the impact of tariffs under Trump’s first term is that China is not the only target, but one of a swath of countries facing hefty levies on their exports to the U.S. Some of these countries, such as Vietnam and Thailand, had served as alternate routes for Chinese goods to reach the U.S.

At the Chinese export hub of Yiwu on Thursday, businesses seemed nonchalant about the impact of the new U.S. tariffs, due to a perception their overseas competitors wouldn’t gain an advantage, said Cameron Johnson, a Shanghai-based senior partner at consulting firm Tidalwave Solutions.

He pointed out that previously, the U.S. had focused its trade measures on forcing companies to remove China from their supply chains and go to other countries. But Chinese manufacturers had expanded overseas alongside that diversification, he said.

“The reality is this [new U.S. tariff policy] essentially gives most of Asia and Africa to China, and the U.S. is not prepared,” Johnson said. He expects China won’t make things unnecessarily difficult for U.S. businesses operating in the country and instead will try harder to build other trade relationships.

Since Trump’s first four-year term ended in early 2021, China has increased its trade with Southeast Asia so much that the region is now Beijing’s largest trading partner, followed by the European Union and then the U.S.

The 10 member states of the Association of Southeast Asian Nations (ASEAN) joined China, Japan, South Korea, Australia and New Zealand in forming the world’s largest free trade bloc — the Regional Comprehensive Economic Partnership (RCEP) — which came into being in early 2022. The U.S. and India are not members of the RCEP.

“RCEP member countries will naturally deepen trade ties with one another,” Yue Su, principal economist, China, at the Economist Intelligence Unit, said in a note Thursday.

“This is also partly because China’s economy is likely to remain the most — or at least among the most—stable in relative terms, given the government’s strong commitment to its growth targets and its readiness to deploy fiscal policy measures when needed,” she said.

Uncertainties remain

The extent to which all countries will be slapped with tariffs this week remains uncertain as Trump is widely expected to use the duties as a negotiating tactic, especially with China.

He said last week the U.S. could lower its tariffs on China to help close a deal for Beijing-based ByteDance to sell TikTok’s U.S. operations.

But the level of new tariffs on China was worse than many investors expected.

“Unlike some of the optimistic market forecasts, we do not expect a US-China bilateral grand bargain,” Ting Lu, chief China economist at Nomura, said in a note Thursday.

“We expect tensions between these two mega economies to worsen significantly,” he said, “especially as China has been making large strides in high-tech sectors, including AI and robotics.”

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