Latest news with #Kantrowitz
CNBC
5 days ago
- Business
- CNBC
You could be repaying student loans for 30 years under GOP plan. It's 'indentured servitude': expert
Federal student loan borrowers could be in repayment for up to 30 years under proposed changes in the House Republicans' massive spending and tax package, dubbed the "One Big Beautiful Bill Act." Currently, most student loan repayment plans range from 10 years to 25 years — which already generate concerns about people bringing their education debt into middle-age and beyond, said higher education expert Mark Kantrowitz. "A 30-year repayment term means indentured servitude," Kantrowitz said. The House passed the bill last week. With control of Congress, Republicans can use "budget reconciliation" to pass their legislation, which only needs a simple majority in the Senate. The House bill's student loan provisions are unlikely to significantly change in the upper chamber before Trump signs it into law, Kantrowitz said. Under the House GOP's bill, there would be just two repayment options for those with federal student loans. (Currently, borrowers have about a dozen ways to repay their student debt, according to Kantrowitz.) If the legislation is enacted as currently drafted, borrowers would be able to pay back their debt through a plan with fixed payments over 10 years to 25 years, or via an income-driven repayment plan, called the "Repayment Assistance Plan," which would conclude in loan forgiveness after three decades. Monthly bills for borrowers on RAP would be set as a share of their income. Payments would typically range from 1% to 10% of a borrowers' income; the more they earn, the bigger their required payment. The new plans would potentially make student loan repayment terms much longer for some borrowers. The U.S. Department of Education now offers a 10-year fixed repayment program, known as the standard plan, and its IDR plans typically conclude in debt cancellation after 20 years or 25 years. "Simplifying the program with fewer repayment plans is a good idea, but not at the cost of another decade of repayment," said James Kvaal, who served as U.S. undersecretary of education for former President Joe Biden. More from Personal Finance:What the House GOP budget bill means for your money'Maycember' is almost over — here's how to recover financiallyCourt order challenges Trump's plan to move student loans to SBA Longer repayment terms will only exacerbate the problem of more Americans carrying student loans into their old age, consumer advocates say. There are some 2.9 million people aged 62 and older with federal student loans, as of the first quarter of 2025, according to Education Department data. That is a 71% increase from 2017, when there were 1.7 million such borrowers.
Business Insider
22-05-2025
- Business
- Business Insider
Google cofounder Sergey Brin says it's time for retired computer scientists to get back to work
Google cofounder Sergey Brin says now is the time for retired computer scientists to dust off their keyboards. Six years after leaving Alphabet in 2019, Brin is back working on its most ambitious projects. Reports of Brin helping out at Google began to emerge sometime in 2023 after OpenAI rocked the tech industry with ChatGPT's release in 2022. It's clear that Brin is no longer a retired computer scientist. And you shouldn't be either, Brin told "Big Technology's" Alex Kantrowitz during a live interview onstage at Google's IO developer conference on Tuesday. "Honestly, anybody who's a computer scientist should not be retired right now," Brin said alongside Google DeepMind CEO Demis Hassabis. DeepMind, a subsidiary of Alphabet, is the research lab behind the company's AI projects, including its genAI assistant Gemini. Brin told Kantrowitz that he's at Google "pretty much every day now" to help with training the latest models from Gemini. With artificial intelligence becoming an increasingly competitive and near-constantly changing tech field, it's a "very unique time in history," according to Brin. When Kantrowitz asked if his return was solely about competing with rivals who are working toward their own artificial general intelligence systems, Brin said it's not just about the AI arms race. "There's just never been a greater, sort of, problem and opportunity — greater cusp of technology," he responded. Google DeepMind did not immediately respond to Business Insider's request for additional comments from Brin. Having witnessed tech advancements like the earliest iteration of the internet, Web 1.0, and the phases that followed, Brin said Tuesday AI is "far more exciting" to be immersed in and will have a greater impact on the world. However the race to reach AGI, a tech milestone of machine intelligence that can solve human tasks, is still on his mind. "We fully intend that Gemini will be the very first AGI," Brin said. His retirement included working an airship startup, LTA Research, funding research for Parkinson's, and investing in real estate. The former Alphabet president led moonshot projects as the head of Google X before his departure in 2019. He notably worked on its failed attempt at smart glasses — Google Glass.
The Star
21-05-2025
- Business
- The Star
U.S. stocks close lower amid rising Treasury yields
NEW YORK, May 21 (Xinhua) -- U.S. stocks ended lower on Wednesday as 20-year bond auction saw weak demand, and U.S. Treasury yields surged. The Dow Jones Industrial Average dropped 816.80 points, or 1.91 percent, to 41,860.44. The S&P 500 fell 95.85 points, or 1.61 percent, to close at 5,844.61, while the Nasdaq Composite lost 270.07 points, or 1.41 percent, ending at 18,872.64, its first negative day in three. Ten of the eleven major S&P 500 sectors closed in negative territory. Real estate and health care led the declines, falling 2.63 percent and 2.37 percent, respectively. Communication services was the only sector to post a gain, rising 0.67 percent. The downturn came as U.S. Treasury yields climbed, with the 10-year yield nearing 4.6 percent and the 30-year yield rising above 5 percent. Yields spiked further after the U.S. government's 16-billion-U.S.-dollar auction of 20-year bonds received weaker-than-expected demand, resulting in a higher yield than markets had anticipated. In a client note published Wednesday, Piper Sandler's chief investment strategist Michael Kantrowitz outlined important thresholds for the 10-Year Treasury yield and explained how movements around those levels could affect the stock market. "The path of rates will also be crucial for equities, particularly for relative performance," Kantrowitz wrote. "Since 2022, equity markets have struggled when 10 yr rates moved above 4.5-4.75 percent and we are pushing up against that zone once again." Meanwhile, investors kept a close eye on developments in Washington, D.C., where debate continues over U.S. President Donald Trump's tax-and-spending bill. The proposed legislation would extend existing tax cuts and introduce new ones, but is projected to add roughly 3 trillion U.S. dollars to the federal deficit over the next decade. "The question now is, from a fiscal perspective, what will the tax bill look like, and will it undo all of the recent fiscal frugality by simply raising the debt level at a slower rate of pace? So I think that's why the 10-year yield is moving higher -- because investors are worried that we're really not doing anything to slow the pace of inflation and to reduce the debt," Sam Stovall, CFRA Research chief investment strategist, told CNBC in an interview. The bond-driven pressure on equities was compounded by disappointing earnings reports from major retailers. Target dropped 5.21 percent after slashing its annual forecast, citing reduced consumer spending and lower confidence. Lowe's lost 1.68 percent after reaffirming its guidance, and TJX fell 2.89 percent after maintaining its outlook, assuming tariffs with China remain unchanged.
NBC News
14-05-2025
- Business
- NBC News
Student loan borrowers in default could see up to 15% of Social Security benefits garnished
Social Security beneficiaries are at risk of receiving a smaller benefit if they've fallen behind on their student loans. The Trump administration recently announced it would move to offset defaulted student loan borrowers' federal benefits, and warned that payments could be garnished as soon as June. That involuntary collection activity could have serious consequences on those who rely on the benefits to pay most, if not all, of their bills, consumer advocates say. There are some 2.9 million people age 62 and older with federal student loans, as of the first quarter of 2025, according to Education Department data. That is a 71% increase from 2017, when there were 1.7 million such borrowers, according to the data. More than 450,000 borrowers in that age group are in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found. Here's what borrowers need to know. Up to 15% of Social Security benefits can be taken Social Security recipients can typically see up to 15% of their monthly benefit reduced to pay back their defaulted student debt, but beneficiaries need to be left with at least $750 a month, experts said. The offset cap is the same 'regardless of the type of benefit,' including retirement and disability payments, said higher education expert Mark Kantrowitz. The 15% offset is calculated from your total benefit amount before any deductions, such as your Medicare premium, Kantrowitz said. Little notice provided Student loan borrowers facing offsets of their federal benefits seem to be getting less notice under the Trump administration, Kantrowitz said. While a 65-day heads-up used to be the norm, it seems the Education Department is now assuming borrowers who are in default were already notified about possible collection activity prior to the Covid-19 pandemic, he said. 'The failure of the U.S. Department of Education to provide the 65-day notice limits the ability of borrowers to challenge the Treasury offset of their Social Security benefit payments,' Kantrowitz said. Still, borrowers should get at least a 30-day warning, Kantrowitz said. The notice should be sent to your last known address, so borrowers should make sure their loan servicer has their most recent contact information. The Education Department provided defaulted federal student borrowers with the required notice, a spokesperson told CNBC after collections efforts resumed May 5. 'The notice may be sent only once, and borrowers may have received this notice before Covid,' the spokesperson said. You can still contest offset Once you receive a notice that your Social Security benefits will be offset, you should have the option to challenge the collection activity, Kantrowitz said. The notice is supposed to include information on how you can do so, he said. You may be able to prevent the offset if you can prove a financial hardship or have a pending student loan discharge, Kantrowitz added. 'Borrowers who receive these notices should not panic,' said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program. 'They should reach out for help as soon as possible.' Getting out of default The best way to avoid the offset of your Social Security benefits is to get current on your loans, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit. You can contact the government's Default Resolution Group and pursue several different avenues to get out of default, including enrolling in an income-driven repayment plan. 'If Social Security is their only income, their payment under those plans would likely be zero,' Mayotte said.
CNBC
14-05-2025
- Business
- CNBC
Social Security benefits are at risk for student loan borrowers in default. What to know
Social Security beneficiaries are at risk of receiving a smaller benefit if they've fallen behind on their student loans. The Trump administration recently announced it would move to offset defaulted student loan borrowers' federal benefits, and warned that payments could be garnished as soon as June. That involuntary collection activity could have serious consequences on those who rely on the benefits to pay most, if not all, of their bills, consumer advocates say. More from Personal Finance:Wage garnishment for defaulted student loans to beginWhat loan forgiveness opportunities remain under TrumpIs college still worth it? It is for most, but not all There are some 2.9 million people age 62 and older with federal student loans, as of the first quarter of 2025, according to Education Department data. That is a 71% increase from 2017, when there were 1.7 million such borrowers, according to the data. More than 450,000 borrowers in that age group are in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found. Here's what borrowers need to know. Social Security recipients can typically see up to 15% of their monthly benefit reduced to pay back their defaulted student debt, but beneficiaries need to be left with at least $750 a month, experts said. The offset cap is the same "regardless of the type of benefit," including retirement and disability payments, said higher education expert Mark Kantrowitz. The 15% offset is calculated from your total benefit amount before any deductions, such as your Medicare premium, Kantrowitz said. Student loan borrowers facing offsets of their federal benefits seem to be getting less notice under the Trump administration, Kantrowitz said. While a 65-day heads-up used to be the norm, it seems the Education Department is now assuming borrowers who are in default were already notified about possible collection activity prior to the Covid-19 pandemic, he said. "The failure of the U.S. Department of Education to provide the 65-day notice limits the ability of borrowers to challenge the Treasury offset of their Social Security benefit payments," Kantrowitz said. Still, borrowers should get at least a 30-day warning, Kantrowitz said. The notice should be sent to your last known address, so borrowers should make sure their loan servicer has their most recent contact information. The Education Department provided defaulted federal student borrowers with the required notice, a spokesperson told CNBC after collections efforts resumed May 5. "The notice may be sent only once, and borrowers may have received this notice before Covid," the spokesperson said. Once you receive a notice that your Social Security benefits will be offset, you should have the option to challenge the collection activity, Kantrowitz said. The notice is supposed to include information on how you can do so, he said. You may be able to prevent the offset if you can prove a financial hardship or have a pending student loan discharge, Kantrowitz added. "Borrowers who receive these notices should not panic," said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program. "They should reach out for help as soon as possible." The best way to avoid the offset of your Social Security benefits is to get current on your loans, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit. You can contact the government's Default Resolution Group and pursue several different avenues to get out of default, including enrolling in an income-driven repayment plan. "If Social Security is their only income, their payment under those plans would likely be zero," Mayotte said.
