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    Poor reviews, missing product: firms’ anti-woke offerings soak consumers

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    Rightwing companies are attempting to “bilk” conservative Americans by pushing “anti-woke” products including razors, chocolate and floor cleaner, an analyst said, as the Daily Wire news outlet launched a “reclaim masculinity” multivitamin.The launch of the “manly green vitamin capsules”, which cost 10 times more than Centrum-branded multivitamins, fits into an emerging pattern of companies selling what they claim are masculine products in reaction to big brands allegedly embracing liberal values.In an article announcing its multivitamin, the Daily Wire asked readers if they wanted to “buy your men’s health products from a company that partners with drag queens and supports radical organizations that push gender procedures on children”. It did not name any particular company, but the “us v them” dynamic used by the Daily Wire and others is clear.Buying and consuming the multivitamin will help with that, the Responsible Man website says. It adds that the product, which comes in “manly green vitamin capsules”, “may be the finest Men’s Multivitamin on the market”.One of the best-known of the rightwing products, Jeremy’s Razors, was launched by the Daily Wire, a rightwing news operation, in 2022, while last year a Georgia man launched Ultra Right Beer, a rightwing alternative to Bud Light, after the latter ran a limited ad campaign with Dylan Mulvaney, a trans activist.Both products have received poor reviews, but that hasn’t stopped the Daily Wire from entering into the world of vitamins.“As a man, you have people relying on you and the world conspires to see you fail,” claims the Responsible Man multivitamin website, which was launched by the Daily Wire at the start of May.“With so much chaos and uncertainty, it’s crucial to take charge of your life and responsibilities.”As Media Matters reported, the site is promoting its multivitamin as a response to what it calls a “woke mind virus”, which it vaguely claims is infecting US corporations.This isn’t the Daily Wire’s first foray into selling rightwing products. Its co-founder and co-CEO Jeremy Boreing launched Jeremy’s Razors in 2022, after the razor company Harry’s said it would stop advertising on the Daily Wire.Going back further, brands such as Black Rifle Coffee have championed their conservative leanings to appeal to Republican-supporting consumers, while PublicSquare – like Amazon, but for people who “respect traditional American values” – has been backed by Donald Trump Jr.“What’s newer, I think, is we’ve seen from the Daily Wire in particular a sort of range of issues in which the media outlet side is kind of creating demand for particular products by tearing down particular companies,” said Matt Gertz, senior fellow at Media Matters, a progressive watchdog group.“And then on the business side, they’re creating a supply of products that they can endorse and sell, so that people can buy them instead.”Jeremy’s Razors has continually received poor reviews – “Absolutely terrible … Would rather use products from a woke company than rip my skin off with Jeremy’s Razors,” one person wrote on the company’s Facebook page in March – but that hasn’t stopped the company, and what seemingly began as a fit of pique has since evolved into a whole range of Jeremy’s products.skip past newsletter promotionafter newsletter promotionThere’s an all-purpose cleaner: “Sure to wipe out woke,” the blurb says; a shampoo: “Softens hair, not masculinity”; and a hand soap: “You’re not responsible for woke culture, and you don’t have to participate in it either. Wash your hands of it all.”“They’re attacking existing men’s health companies, saying that they can’t be trusted and are bad. And then they are providing you instead with an alternative,” Gertz said.“You just have to give them money and they will give you a product that I guess you can feel more politically comfortable with. Effectively what we see on the right is they create a very dedicated audience and then they bilk them for all they’re worth.”Notably, with many of the rightwing companies, commitment to non-woke causes comes at a price. Ultra Right beer retails at $45 for 24 beers, about twice the price of the liberal Bud Light. The Daily Wire’s multivitamin costs $39.99 for a 30-day supply – about 10 times the price of Centrum multivitamins.There’s a risk for the customer, too, even aside from the irritation allegedly caused by Jeremy’s Razors.Ultra Right Beer earned an F rating from the Better Business Bureau in January, after it received 175 complaints in six months – mostly for not delivering beer people had paid for.“​​Ordered 6 months ago. Tried to call no answer, emailed several times, no reply. Complete disgraceful fraud,” one person wrote on the Ultra Right Beer Facebook page.“I was duped!” More

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      Could you get by on a measly $43,000 a month? It seems Rudy Giuliani can’t | Arwa Mahdawi

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      ‘Bankruptcy” is a surprisingly amorphous term. For poor people, it means not having any money. For corporations and the super-wealthy it means a nifty legal strategy that can shield their riches from lawsuits. And for Rudy Giuliani, the disgraced former mayor of New York City and personal attorney of Donald Trump, it means being forced to try to subsist on a measly $43,000 (£34,200) a month.Half a million dollars in spending money a year might seem a princely sum to the common man, but “Sir” Rudy (recipient of an honorary knighthood) is anything but. We’re talking about a gentleman with elevated tastes here: a bon vivant who, during a legal battle with his estranged third wife, was accused of spending $7,000 on fountain pens and $12,000 on cigars over a five-month period. In that same timeframe, his ex-wife’s lawyer claimed he spent $286,000 on his alleged lover, $165,000 on personal travel and $447,938 “for his own enjoyment”. That’s a lot of enjoyment.Giuliani’s spendthrift ways are now facing legal roadblocks. In December, a judge ordered the 79-year-old to pay $148m in damages to two election workers he had baselessly accused of rigging votes in the 2020 US election. Almost immediately, Giuliani – who owes creditors $152m in total – filed for bankruptcy. Because he is a responsible citizen, Giuliani prepared a strict budget and told a federal bankruptcy court in January that he would spend no more than $43,000 a month. This was supposed to cover necessities and not include frivolities such as entertainment.Alas, budgeting doesn’t seem to come naturally to Giuliani, who ended up frittering away almost $120,000 in January alone (more than double the median US annual salary). It is not entirely clear where all this money went but, according to the New York Times, the information Giuliani provided to creditors’ lawyers listed “60 transactions on Amazon, multiple entertainment subscriptions, various Apple services… Uber rides and payment of some of his business partner’s personal credit card bill”. He hasn’t submitted detailed information about his finances since, so it’s unclear if this level of spending has continued. Still, someone needs to change that man’s Amazon password, stat.By now, it seems clear that Giuliani, whose fall from grace has been dizzying, needs quite a bit of help. And, you know what? I am happy to give it to him. I may not be a financial adviser, but I am a geriatric millennial who came into the working world during the 2008 recession – which means I have heard a lot of budgeting tips over the years. Don’t eat avocado toast if you ever want to buy a house, don’t get takeaway coffee, live on foraged beans and pond water, never leave the house. No doubt you’ve seen all these tips too – there’s always a helpful multimillionaire doling out advice to us plebs on how to pull ourselves up by our bootstraps. Kirstie Allsopp, the daughter of landed gentry, for example, has insinuated the affordable housing crisis is overblown, and anyone can buy a house if they just cut out Netflix and gym memberships. More recently, the CEO of Kellogg’s suggested that families who were having a hard time making ends meet might consider eating cereal for dinner.Giuliani can certainly try swapping out his lobster bisque dinners for Rice Krispies, but I’m not sure it’ll make a dent in the $152m he owes. It might be more effective, I reckon, if he takes a break from marrying and divorcing. This appears to be an extremely expensive habit of his: thrice-wedded Giuliani has spent millions on acrimonious divorce proceedings. (Fun related fact: Giuliani’s first wife was his second cousin and, after 14 years, they annulled the marriage because they hadn’t got the correct dispensations for cousin-marrying.) Another top financial tip is to avoid being charged with multiple crimes: lawyers are very expensive.If he can’t save his way out of financial ruin, Giuliani can do what conservatives like him are always telling the rest of us to do: work harder. He faces being disbarred, so lawyering probably isn’t an option. But the man can always go back to selling personalised videos at $375 a pop on Cameo. He has clearly got a knack for it: last year, a video of him reciting “I’m a little teapot” went viral. Now if he’s just a little teapot 405,333 more times, he should be out of hot water. More

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      ‘Totally devastating’: borrowers on the start of student loan repayment

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      Millions of Americans over the last three years experienced what it was like to live without student debt. For many, that meant hundreds of dollars a month that went toward life’s other expenses – rent, buying or maintaining a home, supporting family. The relief was also coupled with hope: Joe Biden announced in August 2022 a plan to cancel $10,000 in loans for low- and middle-income borrowers.But now, the reprieve for borrowers is coming to an end. Republicans forced an end to the pause in student debt repayments during the debt ceiling debate and student loans payments will begin again in October. In a second blow, the supreme court struck down Biden’s forgiveness plan earlier this summer.The impact is broad. About 12% of the US population has student loans, over 43 million Americans hold a collective $1.7tn in debt. The youngest borrowers have just graduated from college and some of the oldest have retired with student loans. Many parents who took out loans to pay for their children’s education are also still burdened by debt.The Guardian asked US student loan borrowers what forbearance meant for them. Their answers give a glimpse into the impact that student debt has beyond the numbers.‘We were able to afford our first home’Homeownership is the primary way Americans build their wealth. For many with student debt, buying a home can feel impossible. A poll from the National Association of Realtors from 2021 found that 60% of millennials who don’t own a home pointed to student debt as the main reason.But the payment pause, tied with low interest rates, allowed some student borrowers to put down a mortgage for their first home.Lauren Segarra, 41, a speech-language pathologist in Atlanta, Georgia, said the payment pause enabled her family to buy a home.“That extra cash put us over the threshold of being able to afford our first home,” Segarra said, adding that the pause – along with being in the Public Service Loan Forgiveness (PSLF) program – allowed her and her husband to save about $12,000 in cash. “We were able to responsibly put a down payment on a home without wiping out our savings.”The real estate company Zillow estimated that those with student loans in 29 out of the 50 largest housing markets in the US saved the equivalent of a 5% down payment on an entry-level home in their market, allowing people like Segarra to become homeowners.But the narrow window for affordable homeownership seems to have passed: Zillow reported that the principal and interest on a new home have now doubled since March 2020 because of record-high interest rates and soaring home prices. Now that payments are set to restart, homeownership for many will continue to be out of reach.‘I paid off $7,000 in medical debt’One out of 13 student loan borrowers are currently behind on other debt, a higher proportion than before the pandemic, the Consumer Financial Protection Bureau (CFPB) reported in June.Credit card debt has soared during the pandemic, especially over the last year as inflation reached record highs. The total amount of credit card debt in the US hit $1tn, the Federal Reserve Bank of New York reported in August, a record high. In a recent survey, 46% of those with credit card debt say they are still trying to pay off an emergency expense, including car or home repairs or medical bills. About a quarter said that everyday expenses, including groceries and childcare, have caused their bills to rack up.And this credit card debt is on top of other medical debt, which totaled $195bn in 2019. According to Kaiser Family Foundation Health News, one in 10 American adults owe more than $10,000 in medical debt.Lydia Gay, 36, a costume maker and tailor based in New York, said the student loan payment pause helped her pay off her medical debt.“It allowed me to save and pay off over $7,000 in debt from medical expenses, mostly from a couple of years of monthly insurance premiums,” she said. The Writers Guild of America (WGA) and Screen Actors Guild (Sag) strikes in Hollywood have meant she can only find part-time work, but “I have still been able to pay for rent and basics because I don’t have $400 a month coming out for student loans.”Gay said she is concerned about what the end of the pause will mean for her finances now, especially as there continues to be less work in her industry.“I’m extremely worried about being able to pay rent, bills and basics, along with student loans,” Gay said. “The stress and worry have even been affecting my sleep and mental health.”‘It allowed me to save money’A majority of Americans – as many as 61%, according to a recent survey – live paycheck to paycheck. More than one in five Americans don’t have emergency savings.For some student loan borrowers, forbearance empowered them to build up savings for the first time.“The pause has been a massive relief and allowed me to save more money,” said Brooke McGeorge, 26, a non-profit program assistant based in San Diego. “Knowing that loan repayment is kicking in again with no follow-through on promises for debt relief feels like a punch to the gut.”With forbearance ending, borrowers say they are worried about the strain that it will have on their finances once again.Ben Birkinbine, 41, an assistant professor based in Oshkosh, Wisconsin, had a daughter in late 2019, right before the pandemic began. During forbearance, his family moved back to Wisconsin to be closer to family. While the pause allowed him and his family to buy a home, he took a pay cut and has less job security.“Our budget is very tight and will be for at least another two years,” Birkinbine said, noting that childcare costs, in particular, have been rising. “Saving will be very difficult, and we will likely need to cut into existing savings to meet payments.”As much as the payment pause was a welcomed respite, the return to payments for many borrowers feels a bit like betrayal, especially when $10,000 in forgiveness seemed to be a reality just a year ago.McGeorge, echoing the frustration of fellow borrowers, said she is frustrated that the supreme court blocked Biden’s forgiveness plan, which many had hoped would help ease repayments starting.“It’s totally devastating,” she said. “Americans should have a chance to be optimistic about the future, but things that used to be so basic like affording good food and buying a home, are feeling more and more like a pipe dream.” More

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      US pension funds are on the brink of implosion – and Wall Street is ignoring it | David Sirota

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      US pension funds are on the brink of implosion – and Wall Street is ignoring itDavid SirotaPrivate equity firms managing millions of Americans’ retirement savings may be inflating their investments As public officials across America prepare to funnel even more of government workers’ savings to private equity moguls, an alarm just sounded for anyone bothering to listen. It is a warning that Wall Street executives, busy skimming fees off retirement nest eggs, want you to ignore. The longer the warning goes unheeded, however, the bigger the financial time bomb may be for workers, retirees and the governments that pay them.The world economy faces a huge stress test in 2023 | Kenneth RogoffRead moreEarlier this month, PitchBook – the go-to news outlet of the private equity industry – declared that “private equity returns are a major threat to pension plans’ ability to pay retirees in 2023”.With more than one in 10 public pension dollars invested in private equity assets – and with states continuing to keep their private equity contracts secret – PitchBook cited a new study finding that losses from the investments may be on the horizon for retirement systems that support millions of teachers, firefighters, first responders and other government employees.“Private equity returns get reported on a lag of up to six months, and with each update in 2022 values were coming down – which means 2022 numbers were including overstated private equity asset valuations and 2023 numbers are going to incorporate those losses,” noted the study from the Equable Institute.To comprehend this timebomb, you have to understand private equity’s business model.In general, private equity firms use pension money to buy up and restructure companies to then sell them at a higher price than they were purchased. In between buying and selling, there are no transparent metrics for valuing the purchased asset – private equity firms can manufacture an alleged value to tell pension investors (and there’s evidence they inflate valuations when seeking new investments).In a story about an investor receiving two different valuations for the same company, Institutional Investor underscored the absurdity: “Everyone Wants to Know What Private Assets Are Really Worth. The Truth: It’s Complicated.”Meanwhile, valuation and fee terms in contracts between private equity firms and public pensions are kept secret, exempt from open records laws.With that in mind, the new warnings are simple: private equity firms may have told their pension officials that their assets were worth much more than they actually are, all while the firms were skimming billions of dollars of fees off retirees’ money.If write-downs now happen, it could mean that when it’s time to sell the assets to pay promised retiree benefits, pension funds would have far less money available than private equity firms led them to believe. At that point, there are three painful choices: cut retirement benefits, slash social programs to fund the benefits, or raise taxes to recoup the losses.Signs of a doomsday scenario are already evident: some of the world’s largest private equity firms have been reporting big declines in earnings, and federal regulators are reportedly intensifying their scrutiny of the industry’s write-downs of asset valuations. Meanwhile, one investment bank reported that in its 2021 transactions, private equity assets sold for just 86% of their stated value last year.How to fight inflation? (Spoiler alert: not with interest rate rises) | Joseph StiglitzRead moreBut while pensioners may be imperiled, Wall Street executives are protected thanks to their heads-we-win-tails-you-lose business model. While reporting asset losses for investors, some of the firms managing pensioners’ money are raking in even more fees from investors and continuing to raise executives’ pay.Meanwhile, even as some sophisticated private investors rush to get out of private equity, the world’s largest private equity firm, Blackstone, recently reassured Wall Street analysts that state pension officials will continue using retirees’ savings to boost revenues for private equity firms, hedge funds, real estate funds and other so-called “alternative investments”.“The desire for alternatives remains very strong,” the president of Blackstone, Jon Gray, said in an investor call last week. “New York’s state legislature actually increased the allocation for the big three pension funds here by roughly a third.”Gray was referring to New York Democratic lawmakers passing legislation significantly increasing the amount of retiree money that pension officials can deliver to Wall Street. The bill was championed by the New York City comptroller, Brad Lander, just weeks after the Democrat won office promising he would be “reviewing the funds’ positions with risky and speculative assets including hedge funds, private equity, and private real estate funds”.The New York governor, Kathy Hochul, quietly signed the legislation on the Saturday before Christmas, just weeks after the Wall Street Journal reported that analysts have started warning pension funds of looming private equity losses. New York lawmakers simultaneously rejected separate legislation that would have allowed workers and retirees to see the contracts signed between state pension officials and Wall Street firms managing their money.The Empire State is hardly alone in continuing to use retirees’ money to enrich the planet’s wealthiest financial speculators – from California to Texas to Iowa, pension funds controlling hundreds of billions of dollars of workers’ retirement savings are planning to dump more money into private equity, while keeping the terms of the investments secret.While globetrotting to elite conferences in exotic locales, pension officials have defended the high-fee investments by parroting Wall Street executives’ claim that private equity reliably outperforms low-fee stock index funds. At the same time, those officials continue to conceal the terms of the investments, raising the question: if the investments are so great, why are the details being hidden?Perhaps because the investments aren’t as wonderful as advertised. In a landmark study entitled An Inconvenient Fact: Private Equity Returns & the Billionaire Factory, Oxford University’s Ludovic Phalippou documented that private equity funds “have returned about the same as public equity indices since at least 2006”, while extracting nearly a quarter-trillion dollars in fees from public pension systems.A 2018 Yahoo News analysis found that US pension systems had paid more than $600bn in fees for hedge fund, private equity, real estate and other alternative investments over a decade.“The big picture is that they’re getting a lot of money for what they’re doing, and they’re not delivering what they have promised or what they pretend they’re delivering,” Phalippou told the New York Times in 2021.Even some on Wall Street admit the truth: a JP Morgan study in 2021 found that private equity has barely outperformed the stock market, but it remains unclear whether that “very thin” outperformance is worth the risk of opaque and illiquid investments whose actual value is often impossible to determine – investments that could crater when the money is most needed.While the warnings have not halted the flood of pension cash to private equity, they have broken through in at least some corners of American politics.The Securities and Exchange Commission is considering new rules to require private equity firms to better disclose the fees they charge.The US should break up monopolies – not punish working Americans for rising prices | Robert ReichRead moreSimilarly, Ohio’s state auditor, Keith Faber, just issued a report sounding an alarm about state pension officials keeping private equity contracts secret – a practice replicated in states across the country.And following a pension corruption scandal in Pennsylvania – whose state government oversees nearly $100bn in pension money – there’s a potential financial earthquake: during his first week in office, Governor Josh Shapiro promised to shift pensioners’ money out of the hands of Wall Street firms.“We need to get rid of these risky investments,” Shapiro told his state’s largest newspaper. “We need to move away from relying on Wall Street money managers.”Shapiro could face opposition not only from private equity moguls and their lobbyists but also from the pension boards’ union-affiliated trustees. As the Philadelphia Inquirer reported: “Union members [on the boards] have mostly favored the old strategy of private investments, even when challenged by governors’ reps and the last couple of state treasurers.”When investment returns were somewhat better, the unholy alliance between some unions and Wall Street firms flew under the radar, even as pension funds were ravaged by fees. But with warnings of write-downs and losses getting louder, the dynamic could change.Better late than never – though the later it gets, the bigger the risk for millions of workers and retirees.
      David Sirota is a Guardian US columnist and an award-winning investigative journalist. He is an editor at large at Jacobin, and the founder of The Lever, where this article also appeared. He served as Bernie Sanders’ presidential campaign speechwriter
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      ‘Who should pay?’: student debt relief in limbo as supreme court decides fate of millions

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      ‘Who should pay?’: student debt relief in limbo as supreme court decides fate of millions Over 26m student loan borrowers are waiting for the country’s highest court to decide if they can receive debt reliefDebt-laden borrowers will be nervously watching the US supreme court come February when the justices hear arguments for two cases that will ultimately decide the fate of over 26 million student loan borrowers who have applied for loan forgiveness.US student debt relief: borrowers in limbo as lawsuits halt cancellation programRead moreThough the future of student loan forgiveness is uncertain in the hands of a deeply conservative court, two researchers who have studied public opinion on student debt and college accessibility see room for optimism, even amid uncertainty around the issue.The millions of Americans who applied were set to get at least $10,000 (£8,320) in relief for their loans under a plan that Joe Biden released over the summer. But the plan’s rollout was halted in November by a Trump-appointed federal judge in Texas, putting the possibility of forgiveness into question.“[Student loan forgiveness] is something that five years or 10 years ago, we wouldn’t have seen. It shows that there’s movement for politicians and the public to do something about student debt that has meaningful effects for a lot of people,” said Natasha Quadlin, a professor at University of California, Los Angeles who co-wrote a book this year, Who Should Pay?: Higher Education, Responsibility and the Public that documents the change in public opinion on how much the government should pay for higher education.Quadlin, along with her co-author Brian Powell, a professor at Indiana University, started administering surveys in 2010 asking people who should pay for college: parents, students or the government.In 2010, nearly 70% of respondents believed that only parents and students should be funding higher education. In 2019, the number dropped to 39%. Meanwhile, the percentage of people who believe the government, both federal and state, should primarily fund college rose from 9% in 2010 to 25% in 2019. All other respondents indicated that the government should help parents or students pay for college.When Quadlin and Powell set off to do this decades-long research in 2010, they did not realize how dramatically people’s perspectives on who should pay for college would change.“When we started working on the book and collecting data, the idea of loan forgiveness was not even really part of the American consciousness,” Powell said.The researchers note a few factors that went into this rapid shift. First, student debt nearly doubled in size between 2010 and 2015, reaching $1.3tn (£1tn) by the end of 2015. The cost of college was also rising, especially since states were slashing higher education budgets during the Great Recession.Fight against inflation raises spectre of global recessionRead more“It became apparent that the current generation that was going through higher education just wasn’t getting a very good deal in terms of the returns they were seeing,” Quadlin said.Some respondents also noted that the Affordable Care Act, passed in 2010, showed them that government can offer broad support for certain areas of life.“Several people said: ‘If we can do this for something as important as healthcare, and ensure health insurance, then we should be able to do that for education as well,’” Powell said.Sentiment had changed so much that some states were discussing the possibility of free college, a policy that Quadlin and Powell did not even consider putting on their survey in 2010. By 2019, over 20 states offered programs that either reduced or eliminated the cost of public college. Nearly 40% of respondents on the survey strongly and 32% somewhat agreed that public college should be free for those who are qualified to attend.Loan forgiveness and free college, while similarly addressing accessibility to higher education, are ultimately two different issues. While the researchers note that both should be pursued simultaneously, it appears that much of the current focus is on addressing debt forgiveness as the immediate problem.How quickly either will be addressed is unclear, but “the costs and burden [of student debt] is so high and so widespread”, Quadlin said.“There is a recognition that college is necessary for such a large percentage of the problem … and [its] not getting fixed,” she said.Throughout the book, Quadlin and Powell note how quickly public opinion had changed on same-sex marriage in a short amount of time. Powell, who has studied this change in opinion, noted that Congress just recently passed a bill protecting same-sex marriage with bipartisan support. In 2010, Gallup reported 28% of Republican support same-sex marriage. In 2021, the percentage rose to 55%.While Republicans have largely been against Biden’s student loan forgiveness plan, there is some evidence that there could be Republican support one day. In 2014, Tennessee, under a Republican governor, created a scholarship program for free community college – an initiative that is still thought to be too radical at the federal level.“We’ve had examples of bipartisan support. Education is one of those areas that people believe in – the American Dream, that people can be able to have the education they need to have a fulfilling life and successful career,” Powell said. “It’s hard to envision the changes in the past year without the dramatic change in public opinion that occurred in a really short period of time.”TopicsUS student debtHigher educationUS politicsRepublicansDemocratsBiden administrationDebt relieffeaturesReuse this content More

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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?

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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?The initiative’s income cap and unclear bureaucratic process could fail to address the racial disparities that already exist01:15As Joe Biden announced the details of his plan to help those with student loan debt, Kat Welbeck wrestled with the idea. For millions of Americans, the unprecedented relief would be “life-changing”, especially for low-income and Black and Latino Americans, who are disproportionately saddled with decades-long debt, she said.But the plans’ income cap on who can receive cancellation, and its unclear bureaucratic process for Americans seeking debt relief could perpetuate the inequities that underpin the nation’s student loan system, Welbeck, director of advocacy and civil rights counsel for the Student Borrower Protection Center, said.Student loan forgiveness: what you need to know about Biden’s planRead more“While a $10,000 cancellation is so meaningful for millions of student loan borrowers, there’s a lot that’s still to be done to fix this student debt crisis,” Welbeck says.On Wednesday, the White House released its long-anticipated plan on how to tackle the nation’s mounting $1.6tn student loan debt, accounting for more than 43 million people, with almost a third owing less than $10,000, according to federal data.The initiative would cancel up to $10,000 in debt for borrowers who earn less than $125,000 a year ($250,000 for married couples). Borrowers whose low income level qualified them for a Pell Grant will receive up to $20,000 in relief. The White House also extended a pause for “one final time” on student loan payments through January.The White House has projected that the plan would eliminate full debt balances for 20 million Americans and that 90% of debt relief dollars would go toward people with incomes less than $75,000. The White House also touted it as an effort to “advance racial equity”, pointing to its targeted relief for those who received Pell Grants. Officials noted that Black Americans were twice as likely to receive such grants as white Americans.Senator Elizabeth Warren, who, like others, have advocated for cancelling at least $50,000 in student debt, praised the administration’s plan as “transformative for the lives of working people all across the country” and would “help narrow the racial wealth gap among borrowers”.Still, some argue that the cancellation of just $10,000 for most borrowers would fail to substantially affect the racial disparities within the student loan system. Black and Latino borrowers disproportionately come from poorer households and, as a result, take on more debt than white Americans. At the same time, white American households have, on average, 10 times the wealth of Black households.Derrick Johnson, president of the NAACP, which had been advocating for cancellation of $50,000, wrote in an op-ed that Biden’s plan would “do little to help” Black Americans who, on average, hold nearly twice as much student debt as white borrowers. “Canceling just $10,000 of debt is like pouring a bucket of ice water on a forest fire,” he said. Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism.— Nina Turner (@ninaturner) August 23, 2022
      The emphasis on income in the White House’s cap represents a possible barrier that could exclude borrowers of color who meet the income threshold yet their families lack the wealth to tackle the debt, Welbeck says. A June 2020 report from the Student Borrower Protection Center found that 90% of Black Americans and 72% of Latino Americans took out student loans, a far cry from the 66% of white Americans.And 20 years after graduating college, the median Black borrower still owed 95% of their original debt while the median white borrower paid down the same amount. For Latinos, after 12 years, they owed 83% of their original debt, more than the white borrower over the same time.Given that Black and Latino Americans typically earn less than white Americans, borrowers of color will start from behind without the intergenerational wealth available to reduce the debt they already hold.“So if you’re already coming from a lower-wealth household, you now have more debt, and then that cuts into opportunities for you to build wealth for the next generation,” Welback says. “You might see higher-income households that are Black or Latino, but that does not take away the fact that you still have those wealth disparities.”Student loan forgiveness: what does it mean for the US debt crisis?Read moreHistorically, the education department has complicated access to loan forgiveness through the programs it creates, such as the Public Service Loan Forgiveness program for non-profit and public service workers seeking relief and the borrower defense program for those who were defrauded by predatory for-profit colleges.The White House initiative does nothing to address private student loan debt, which accounts for more than $140bn in debt. Although Latino borrowers were more than twice as likely to report struggling with private student loan debt as white borrowers, Black borrowers were a staggering four times as likely to fall behind on private debt payments, according to the Student Borrower Protection Center.An application process could make it harder for people to access relief, Welbeck says. But recent decisions by the education department to automatically discharge debts for hundreds of thousands of students who attended ITT Technical Institute and Corinthian Colleges, two for-profit college chains that imploded, show that a widespread relief without bureaucratic hurdles is possible. The two debt cancellations at the for-profit institutions amounted to roughly $10bn affecting more than 700,000 students.“The student debt crisis is a result of the longstanding history of racial discrimination that we have in our country, and it continues to perpetuate them,” Welback says. “So until we address student debt as a civil rights crisis, we’re not going to be able to make meaningful gains toward equity.”TopicsUS student debtBiden administrationUS student financeRaceJoe BidenUS politicsUS educationnewsReuse this content More

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      Biden unveils plan to cancel $10,000 in student loan debt for millions

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      Biden unveils plan to cancel $10,000 in student loan debt for millionsPresident delivers on campaign promise and outlines debt relief measures for those on lower incomes in White House speech01:15Millions of Americans received welcome news on Wednesday when Joe Biden delivered on a campaign promise to provide $10,000 in student debt forgiveness.Borrowers who earn less than $125,000 a year will be eligible for loan forgiveness, with those whose low incomes qualified them for federal Pell Grants receiving up to $20,000 in relief. About a third of US undergraduate students receive Pell Grants.Biden also extended a pause on federal student loan payments through the end of the year. The White House said it would be the last pause, and borrowers should expect to resume payments in January.If it survives probable legal challenges, Biden’s plan could offer a windfall to many Americans in the run-up to midterm elections in November. More than 45 million owe a combined $1.7tn in federal student debt. Almost a third owe less than $10,000, according to federal data.Biden also proposed a new income-driven repayment plan that would cap loans for low-income future borrowers and introduce fixes to the loan forgiveness program for non-profit and government workers.“Twelve years of universal education is not enough,” Biden said, announcing the plan at the White House. “How do we remain the most competitive nation in the world with the strongest economy in the world with the greatest opportunities?“That’s what today’s announcement is about. It’s about opportunity. It’s about giving people a fair shot. It’s about the one word America can be defined by: ‘possibilities’. It’s about providing possibilities.Biden noted that the federal government gave loans to small businesses during the Covid pandemic.“Now, it’s time to address the burden of student debt the same way.”Biden added that “an entire generation is now saddled with unsustainable debt.“The burden is so heavy that even if you graduate, you may not have access to the middle-class life that the college degree once provided. The burden is especially heavy on Black and Hispanic borrowers who, on average, have less family wealth to pay for it.”Biden said more information on the plan would soon be released and borrowers who qualify for forgiveness could expect a “short and simple form to apply for this relief”, sent by the Department of Education.The US has a long history of student debt, the vast majority owed to the federal government, which has been offering loans for college since 1958. US student debt has more than tripled over the last 16 years.Senior Democrats on Capitol Hill cheered Biden’s announcement. The Senate majority leader, Chuck Schumer, and the Massachusetts senator Elizabeth Warren, a longtime advocate of the policy, issued a joint statement.They said: “With the flick of a pen, President Biden has taken a giant step forward in addressing the student debt crisis by cancelling significant amounts of student debt for millions of borrowers.“The positive impacts of this move will be felt by families across the country, particularly in minority communities, and is the single most effective action that the president can take on his own to help working families and the economy.”The senators added that Democrats would continue with efforts “to help close the racial wealth gap for borrowers and keep our economy growing”.Biden has faced pressure from liberals to provide broader relief. The cancellation falls short of the $50,000 many activist groups wanted. Some groups have called for full student debt cancellation.“If we can cancel $10k, we can cancel it all,” the Debt Collective, a union of debtors, tweeted on Wednesday.Administration officials claimed the plan could reduce inflation. The top Senate Republican, Mitch McConnell, argued that it would worsen the problem.McConnell said: “Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our armed forces in order to avoid taking on debt. This policy is astonishingly unfair.”Biden’s continuation of the pandemic loan payment freeze came just days before millions were set to find out when their next student loan bills were due. The end of the payment freeze extension was set for 31 August.During the 2020 presidential campaign, Biden was initially skeptical of student debt cancellation as he faced progressive candidates including Warren and Bernie Sanders, the democratic socialist senator from Vermont.On Wednesday, Sanders hailed “a great step forward” but said: “We have got to do more.”New York special election victory gives Democrats hope for midterms – liveRead moreAs he tried to shore up support among younger voters, Biden unveiled a proposal for debt cancellation of $10,000 per borrower, with no mention of an income cap. That campaign promise was narrowed in recent months by embracing the income limit.Democrats pushed the administration to go as broad as possible, seeing debt relief as a galvanizing issue, particularly for Black and young voters.‘There’s been a dramatic shift in how Americans think about the role of government in helping people out for college,” said Brian Powell, professor of sociology at Indiana University Bloomington who co-authored a book on the student loan crisis.Powell noted that support for debt cancellation and college affordability has grown. Those who go to college make on average $30,000 more a year than those with just a high school degree.TopicsUS student debtJoe BidenUS politicsUS educationUS domestic policynewsReuse this content More

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      The Guardian view on Biden’s risky gamble: betting on lowering oil prices | Editorial

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      The Guardian view on Biden’s risky gamble: betting on lowering oil pricesEditorialThe climate agenda risks being derailed by energy market disruptions caused by Russia’s war in Ukraine Joe Biden’s trip to Saudi Arabia this month highlights the paradox of American power. The US has the economic heft to punish an opponent – but not enough to alter the behaviour of a determined adversary. Sanctions will see Russia’s economy contract by 9% next year. But Washington needs more nations to join its camp to halt Moscow’s brutal invasion of Ukraine. Mr Biden has been forced to prioritise war objectives over ethics in meeting Crown Prince Mohammed bin Salman, who the CIA says ordered the barbaric murder of the prominent journalist Jamal Khashoggi.The havoc that Russia’s war has caused on the world’s energy markets is contributing to an economic crisis that is playing into the hands of Mr Biden’s domestic opponents. This highlights the west’s failure to confront the climate emergency with a less carbon-intensive economic model. The green agenda risks being derailed by sky-high hydrocarbon prices. This scenario could have been averted if western nations had accelerated their net zero agendas by driving down energy demand – the lack of UK home insulation is one glaring failure – and spending on renewables to achieve energy security. Instead, this week the G7 watered down pledges to halt fossil fuel investment over fears of winter energy shortages as Moscow squeezes supplies.Boycotts and bans against Russia, even as they take a toll on the global economy, will cause ordinary Russians hardship. But this has not moved Vladimir Putin. Soaring crude prices fuel Moscow’s war machine. A price cap on Russia’s petroleum exports might choke off the cash. But a concern is that China and India will buy Mr Putin’s oil at a price that still lets the Kremlin profit. Clever technical solutions mask hard choices. Sanctions drive up energy prices for consumers unless there are alternative supplies available. Right now, to bring down oil prices means producing more planet-destroying energy. That requires US engagement with Saudi Arabia and the United Arab Emirates, both of which bear responsibility for the disastrous Yemen war. Washington might have to woo Venezuela and Iran, nations which will play Moscow off against the west.The US is pursuing a three-pronged strategy: increasing pressure on Russia; getting more oil into markets to bring prices down; and allowing central banks to raise interest rates to levels that look as if they might cause a recession. The latter is designed to signal to oil producers that energy prices will collapse. The painful recessions of the 1970s and early 1980s played a part in bringing down oil prices after energy shocks – and contributed to the Soviet Union’s disintegration. But this took 15 years. Mr Putin’s Russia may not be as powerful as its forerunner. It might be more brittle than the Soviet Union. But there are few signs of imminent collapse.As the west seeks to reduce its reliance on Russian hydrocarbons, there seems to be a global “gold rush” for new fossil fuel projects defended as temporary supply measures. The risk, with the US as the largest hydrocarbon producer, is that the world becomes locked into an irreversible climate catastrophe. Europe might become as reliant on US gas as it once was on Russian gas. Donald Trump proved America could be an unreliable ally. Rightwing supreme court justices have hobbled Mr Biden’s power to limit harmful emissions. Meanwhile, China has emerged as a world leader in renewable energy as well as the metals on which it depends. Mr Biden had wanted to transition the US away from oil. Yet during his time in office the sector’s market value has doubled because prices have risen. Jarringly, as the climate emergency grows ever more urgent, fossil fuel appears the pivot on which the war in Ukraine will turn.TopicsUkraineOpinionClimate crisisJoe BidenUS politicsSaudi ArabiaMohammed bin SalmanOileditorialsReuse this content More

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      Budget 2021 calculator: What does it mean for you

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      Rishi Sunak vowed to help families to meet the rising cost of living and promised a “stronger economy of the future” as he revealed a host of changes in the 2021 Budget. The chancellor announced a planned fuel duty hike would be scrapped and duty on UK domestic flights would be slashed in his statement to parliament on Wednesday.Another key announcement was about changes to alcohol duties, which included a planned rise in duty on spirits, wine, cider and beer would be cancelled. The Budget also contained a rise in the minimum wage from the current £8.91 to £9.50 an hour next year.Extra funding was also announced for schools, childcare and “A Start for Life” parenting programmes. Clearly, there is a lot to consider. But the online calculator below, created by accountants Blick Rothenberg, offers a quick reckoner as to how the latest raft of changes will affect you, broadly speaking.Input a few details and it will offer an indication as to how much better or worse you will be following the chancellor’s announcements. More