Finance
Millions of borrowers to see student loan payments drop in July after SAVE adjustment
In July, borrowers enrolled in the SAVE plan will have their payments calculated using 5% of their income. (iStock)
President Joe Biden’s Saving on a Valuable Education (SAVE) plan has lowered student loan payments for 153,000 borrowers. In July, the plan is set to drop payments even more for nearly every borrower enrolled.
The plan uses a borrower’s income to determine payment amounts. Until July, the formula considers 10% of a borrower’s discretionary income when calculating these monthly payments. Starting on July 1, the repayment formula will start basing payments on 5% of borrowers’ income instead, lowering the payment of every person enrolled in the SAVE plan.
This drop to 5% only applies to those paying down undergraduate student loans. For borrowers with a mix of undergraduate and graduate loans, they’ll pay a weighted average of between 5% and 10% of their income.
The same forgiveness applies under the plan. After 20 or 25 years, depending on whether borrowers have graduate loan debt, the remaining balance of the loans is forgiven. This includes retroactive payments borrowers made before they enrolled in the SAVE plan.
If you have private student loans, federal relief doesn’t apply to you, but you can potentially lower your payments by refinancing. Visit Credible to find your personalized interest rate without affecting your credit score.
BIDEN CANCELS $1.2 BILLION IN STUDENT LOANS FOR BORROWERS ENROLLED IN SAVE
Some borrowers have until 2025 to apply for forgiveness
Parents who take out Parent PLUS loans for their children are eligible for a loophole that could lower their payments. However, this loophole is set to end in 2025.
Unfortunately, Parent PLUS loans don’t qualify for President Biden’s SAVE plan, but they do qualify for consolidation options. The loophole they qualify for is called double consolidation.
Parents essentially consolidate each of their loans twice and, in the end, do become eligible for the SAVE plan. For those with two or more Parent PLUS loans, parents can consolidate them into two separate Direct Consolidation loans. After these consolidations, parents can then consolidate those two loans into a single Direct Consolidate loan that’s eligible for SAVE plan enrollment.
For parents who have a Parent PLUS loan and other federal loans, the process is similar. The Parent PLUS loan needs to be consolidated first and then that loan and the rest of the federal loans get consolidated together in a Direct Consolidation loan, which is also eligible for the SAVE plan.
If you don’t have federal student loans that qualify for these programs, refinancing can also help save you money. You can use Credible to compare student loan refinancing rates from multiple private lenders at once.
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Thousands of defrauded student loan borrowers set to get checks from the FTC
Many borrowers who were taken advantage of by debt relief scammers will receive a check in the mail soon to refund some of the money they lost.
The Federal Trade Commission plans to send more than $4.1 million in refunds to 27,584 consumers affected by these scams.
These consumers were lured into fake forgiveness claims by sham companies such as Mission Hills Federal, Federal Direct Group, National Secure Processing and The Student Loan Group.
The 2019 complaint the FTC filed alleged that these companies got borrowers to pay thousands of dollars in illegal fees and falsely claimed they would lower payments for borrowers.
These fraudulent companies also tricked consumers into sending payments directly to them, saying they were going to take over the servicing of borrowers’ loans.
Recipients of these checks will need to cash their checks within 90 days, which should be indicated on the check.
“Don’t trust anyone who contacts you promising debt relief or loan forgiveness, even if they say they’re affiliated with the Department of Education,” the FTC advised.
“Scammers try to look real, with official-looking names, seals and logos,” it continued. “They promise special access to repayment plans or forgiveness options — which don’t exist. If you’re tempted, slow down, hang up and log into your student loan account to review your options.”
If you want help lowering your monthly student loan payments, consider refinancing your loans into a private loan with a lower interest rate. To see if refinancing is right for you, view this rates table from Credible that compares rates from multiple lenders at once.
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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.
Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
Nurphoto | Nurphoto | Getty Images
BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.
Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.
Contextual clues
Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.
Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.
Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.
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