A growing number of Americans struggling with the burden of student loans are turning to bankruptcy and successfully discharging this debt. (iStock)
An increasing number of borrowers who filed cases seeking student debt discharge are successfully receiving debt relief through bankruptcy after a policy change by President Joe Biden’s administration, according to the Department of Education.
A total of 588 people filed cases seeking student debt discharged through bankruptcy between October 2023 and March 2024 — a 36% increase from the prior six-month period. Also, a total of 1,220 cases were filed from November 2022 through March of this year. This trend is expected to continue, the Education Department said in a statement.
In filed cases, 96% of all borrowers are voluntarily using the updated guidelines from the Justice and Education departments, announced in November 2022, which includes a standard attestation form that allows borrowers more easily to identify and provide relevant information in support of their discharge request.
Previously, borrowers seeking to file for bankruptcy had to demonstrate they would suffer undue hardship if the debt was not discharged. Now, borrowers must prove they meet three criteria to offload their student loan debt: they lack the ability to repay the loan currently, are unable to repay the loan in the future, and have made a good-faith effort to repay it.
“Our clear, fair, and practical standards are helping struggling borrowers find relief that was previously out of reach,” U.S. Under Secretary of Education James Kvaal said. “This data should puncture the myth that struggling borrowers cannot discharge their student loan debt through bankruptcy. We will continue to work with our partners at the Department of Justice to make it simpler and easier for borrowers to get much-needed relief in the way it was intended.”
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.
A recent ruling from the 8th Circuit Court of Appeals effectively entirely blocks the SAVE student loan repayment plan. Education Secretary Miguel Cardona said in a statement that borrowers enrolled in the SAVE Plan will be placed on an interest-free forbearance while the Biden Administration mounts a legal defense of the plan in court.
“Today’s ruling from the 8th Circuit blocking President Biden’s SAVE plan could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect,” Cardona said. “It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers.”
The Biden Administration introduced the Saving on a Valuable Education (SAVE) plan 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. The plan now has more than 8 million enrollees.
Initially, only some of the provisions under SAVE– mainly cutting the payments on the loans to 5% of discretionary income from 10% that was set to take effect on July 1st and any new debt cancellations through the program – were stalled as a result of the court-ordered block.
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.
Only 33% of student loan holders have been making regular payments since they started up again in October – and roughly half aim to use an income-driven repayment plan or are seeking outright forgiveness, according to a Civic Science survey.
Student loan payments picked up again last October after a 42-month payment and interest accrual pause. After a more than three-year pause, many Americans have had to make significant adjustments to their household budgets to afford their student loan payments.
Roughly 58% of student loan holders said that they are at least “somewhat” or “very” concerned about paying their student loans, and more than 60% of borrowers said their student loan debt is impacting their ability to save for retirement. This concern pushes many borrowers to seek ways to suspend loan repayment, even if it means that interest will continue to build on the debt.
“New data reveal a plurality of loan holders have deferred their loans, but 14% report they have one or more loans currently in forbearance, meaning having received a temporary pause on repayment for up to 12 months, while 14% say it’s likely they will apply for forbearance,” the survey said. “Perhaps more concerning, 9% of borrowers have defaulted on their loans, and 6% expect they will go into default. If repayments continue as they have been, the majority of student loan holders will experience forbearance, deferment, or default at some point,” the survey 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.
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It’s milestone month for the exchange-traded fund industry.
Actively managed ETFs now have more than $1 trillion in assets under management, according to independent research firm ETFGI.
That’s roughly the market cap of Berkshire Hathaway, Saudi Arabia’s gross domestic product and the value of 121 New York Yankees franchises.
The ETF Store’s Nate Geraci thinks it will grow even bigger due to the appetite for new active investing strategies.
“It’s interesting for an industry where the roots are passively managed products. That’s what the industry was built on,” the firm’s president told CNBC’s “ETF Edge” this week. “It’s interesting to see active ETFs getting all of the attention right now.”
Geraci finds most of the flows are going into “much more systemic strategies,” including a combination of passive and aggressive.
“When you look at the growth in the number of actively managed ETFs out there … these aren’t what you necessarily think of as traditional active,” he added. “It is products like options-based income ETFs [and] buffer ETFs.”
Actively managed ETFs now comprise almost one-tenth of the ETF industry, according to VettaFi’s Kirsten Chang.
A flying taxi displayed at the China Telecom booth at SNIEC in Shanghai, on June 26, 2024, during the opening of Mobile World Congress 2024.
Nurphoto | Nurphoto | Getty Images
Flying taxis will become a viable method of transportation in China in the next three to five years, according to a senior executive at Ehang, a company that makes autonomous aerial vehicles (AAVs).
The prediction by Ehang’s Vice President He Tianxing comes days after the company became the first company, along with its joint venture partner Hefei Heyi Aviation, to obtain a certificate to operate “civil human-carrying pilotless aerial vehicles” from the Civil Aviation Administration of China.
Ehang said the certification clears the way for commercial operations of its vehicles, allowing for paid human-carrying services and any other low-altitude use cases the company develops.
At first, Ehang’s AAVs will be used for tourism, with passengers able to ride along designated routes in Guangzhou and Hefei by the end of June, He told CNBC in an interview translated from Mandarin.
The company will gradually explore air taxi services as its tourist operations progress. He named Hefei and Shenzhen as examples of some of the first cities expected to get air taxi services.
Ehang’s EH216-S, which received the certification, is a fully electric, pilotless two-seater aerial vehicle that features 16 propellers, according to Ehang’s website. It has a maximum design speed of 130 kilometers per hour, with a maximum range of 30 kilometers.
He expects to get certifications to operate in additional cities this year and next, with the second set of locations for tourist operations expected to include Zhuhai, Shenzhen, Taiyuan, Wuxi, Wenzhou and Wuhan.
For the forthcoming Hefei and Guangzhou locations, he declined to share the price per ride but hoped it would be reasonable enough to encourage more people to try out the pilotless aerial vehicle.
The experience should be “just like riding in a car,” added He, noting that no helmet or parachute is required. He said the initial length of rides offered by the company would vary from around three minutes to 10 minutes.
When asked about global markets, He said overseas partners had actively reached out since news of the certification, and he expected Ehang could expand overseas in the next few years.
Early lead
According to technology analysts, China’s allowing commercial use of passenger AAVs signifies its innovation and leadership in transportation and mobility.
“This is a major development and shot across the bow from China showing technology innovation is accelerating,” said Dan Ives, global head of technology research at Wedbush Securities.
China has already established itself as a global leader in electric vehicles and autonomous driving. Flying taxis, meanwhile, represent “one of the next frontiers for the auto and tech industry,” said Ives, adding that China already has created a clear lead in that space.
Beijing first released rules for unmanned aircraft flight — vehicles without a pilot on board — in June 2023. The U.S., on the other hand, has yet to roll out comparable regulations.
Instead, Washington’s Federal Aviation Administration last year unveiled general rules for “powered-lift” vehicles, which includes some electric vertical takeoff and landing (eVTOL) aircrafts.
eVTOL encompasses electric-powered aircrafts designed to carry passengers and take off and land vertically without the need for runways. However, the FAA has focused on those that are manually piloted.
Tu Le, founder of auto industry consultancy Sino Auto Insights, told CNBC that the U.S. has been falling behind China and even the EU in eVTOLs due to this lack of favorable policies, chalking it up to overregulation, lobbying from competing industries or “just plain politics.”
Meanwhile, China has been backing eVTOL technology as part of its “low-altitude economy,” the development of which has become a major policy goal. The term refers to economic activity taking place in airspace below 1,000 meters, well under the around 9,000 meters most commercial planes cruise around.
In addition to flying taxis and other eVTOLs, examples of the low-altitude economy include unmanned drones for delivery and helicopter-operated air shuttle routes.
The term was recently included in China’s annual work report for 2025, with the government promising to promote its development. Beijing has also committed to boosting consumption in the low-altitude economy, notably in low-altitude tourism, air sports, and consumer drones, as part of a special action plan in March.
Already, China’s low-altitude economy is one of its fastest-growing industries, with it projected to be worth 1.5 trillion yuan ($205 billion) by 2025, and almost double that by 2035, according to a report by the research group Hurun.
Competition ramping up
Sino Auto Insights’ Le also credits China’s progress in the eVTOLs sector to a high degree of domestic competition.
China has seen a major ramp-up of prospective players in recent years, as companies prepare for a high-tech future that was once confined to science fiction.
Firms investing in the space have included electric vehicle makers like GAC, Geely and Xpeng.
Xpeng’s flying car division, Xpeng Aero HT, last week, completed a maiden flight of its “Land Carrier” product — a van paired with a 2-man quadcopter, the company told CNBC.
Xpeng Aero HT said it will hold a pre-sale launch event and complete the construction of its mass production factory in the second half of the year. It also aims to obtain certifications for airworthiness by the end of the year.
Last month, XPeng Motors CEO He Xiaopeng told state media the company plans to mass-produce flying cars by 2026, as China’s low-altitude economy is boosted by supportive policy.
However, despite China leading in eVTOL regulation, it is expected to face competition from international companies also investing in and building various types of air vehicle technologies.
Some of those companies include international companies like America’s Boeing, France’s Airbus, and the Brazilian firm Embraer, which have taken steps to take advantage of future flying car demand.
Numerous startups, including Joby Aviation, Archer, and Wisk, in the U.S. are also planning on launching various commercial air taxi services over the next few years.
According to Wedbush’s Ives, the global electric vertical takeoff and landing (eVTOL) aircraft business could grow into a $30 billion market opportunity over the next decade.
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.
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 Beijingto “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 theiroverseas 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.
“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.”