On The Money — How borrowers can prepare for forgiveness

·5 min read

The Biden administration is expected to release applications for broad-based student loan forgiveness in the coming weeks — but that doesn’t mean there aren’t steps borrowers can take now for preparation. We’ll also look at the recent housing forecast out of Goldman Sachs, the pressure building around Amazon’s worker safety “crisis,” and more.

But first, see why some off-duty pilots are picketing at airports nationwide ahead of the busy Labor Day travel weekend.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane and Aris Folley. Someone forward you this newsletter? Subscribe here.

What borrowers can do waiting for loan forgiveness

In a matter of weeks, the Biden administration is set to unveil applications for student borrowers to register for up to $20,000 in loan forgiveness.

Applications are expected to drop by early October, and borrowers will have a short window to apply if they want to see relief take effect before the end of the year. Here are a few key steps student borrowers can take now to prepare for the application process:

  • Log into your student aid account: One of the first things experts have urged borrowers to do in the coming weeks is log into their account at StudentAid.gov. There, borrowers will be able to view a breakdown of their federal loan and grant information as well as track and manage their federal loans. 

  • Find out which loans you have: President Biden’s forgiveness plan likely won’t relieve private loan debt, experts say, though there are questions about whether borrowers with certain loans issued by private lenders will be able to see relief. In particular, experts are awaiting more information on how the department will handle Federal Family Education Loan Program (FFELP) loans. 

  • Check your income eligibility: Eligibility for the relief extends to borrowers with incomes of less than $125,000 for individuals and $250,000 for married couples and heads of households. Experts say the amount will be based on income earned in 2020 and 2021, so borrowers may need to have that information available.

Check out the other steps here.


Goldman Sachs releases forecast on housing downturn: ‘Further to fall’

Goldman Sachs says home sales have taken a larger dip than previously reported, a trend experts say could continue further into the year.

Researchers said in the new report that new and existing home sales saw a nearly
30 percent drop from the peak seen in October 2020 amid higher mortgage rates and a reversal in what was described as several “pandemic-related preference shifts.”

  • During the pandemic, the nation saw a boom in household formation and demand for second homes, researchers noted. But they added that multiple areas that once saw “outsized increases in home sales and building permits in 2020 and 2021” are currently seeing disproportionate declines. 

  • Researchers say home sales could fall even further in the months ahead due to multiple factors, including what they listed as a “sustained reduction in affordability, waning pandemic tailwind, and recent decline in purchasing intentions.” 

  • A model included in the report forecasts a potentially sharp slowdown for home price growth in the coming quarters and for “home prices to be flat” next year, as what researchers described as a current imbalance between supply and demand levels out more.

Aris has more on this here.


Groups call for Amazon CEO to testify on warehouse worker safety ‘crisis’

More than 30 worker and civil society groups are demanding Amazon CEO Andy Jassy testify in a congressional hearing on the company’s worker safety “crisis.”

In a letter sent to Senate Majority Leader Charles Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.) and top lawmakers on two congressional labor committees on Thursday, the coalition urged the lawmakers to hold a congressional hearing on “the dangerous labor practices” the groups said have caused a number of deaths and injuries at Amazon warehouse facilities and to call Jassy and others “responsible” for those conditions to testify.

  • The letter noted that three Amazon workers at a New Jersey warehouse facility died last month within a three-week span and about 34,000 serious injuries were reported at company facilities last year.  

  • The groups also cited a report from the Strategic Organizing Center that found on-site injuries at the company’s facilities around the country increased by
    20 percent from 2020 to 2021 and another report from nonprofit organization Make the Road NJ that noted injuries at Amazon fulfillment centers in New Jersey increased by 54 percent in that time.

The Hill’s Olafimihan Oshin has more info here.


Bank of America announces measures to boost Black, Hispanic homeownership

Bank of America has announced a new effort aimed at bolstering homeownership opportunities in Black and Latino communities, with plans to offer zero down payment and zero closing cost mortgage options in certain neighborhoods.

The bank said the new options, announced this week, will be offered in Black and Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami, as well as other markets.

  • Bank of America says its effort, dubbed the Community Affordable Loan Solution, is targeted at helping “eligible individuals and families obtain an affordable loan to purchase a home.” 

  • As part of the new rollout, the bank said the program will use “credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments,” and will not require “mortgage insurance or minimum credit score.”

Aris has the deets here.

Good to Know

The social cost of carbon is significantly higher than the federal estimate, according to a study published Thursday in the journal Nature.

Researchers put the financial toll associated with projected future carbon emissions at $185 per ton of carbon pollution added to the atmosphere, more than three times the federal government’s figure of $51.

Here’s what else we have our eye on:

  • A bipartisan data privacy bill faces another roadblock, with Speaker Nancy Pelosi (D-Calif.) expressing concern Thursday that the proposal could limit state protections.

  • House Republicans on Thursday asked Meta CEO Mark Zuckerberg to hand over communications between Facebook and the FBI related to the platform’s reduced distribution of a New York Post story on Hunter Biden.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.


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