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Forbes
4 days ago
- Business
- Forbes
Borrowers Receive Misleading Student Loan Interest Notices — Here's What To Know
Hundreds of thousands of federal student loan borrowers received a formal notice this week warning them that interest is accruing on their balance, and suggesting that they make a payment. But for many of these borrowers, interest isn't actually accruing, and the notice provided misleading information. The federal student loan repayment system remains plagued by dysfunction, making the environment ripe for confusion and misinformation. More than eight million borrowers who had enrolled in the SAVE plan remain stuck in a forbearance after a court blocked the program last summer. The ruling came in response to a legal challenge brought by Republican-led states. Meanwhile, the Department of Education and its contracted loan servicers are trying to work through a two-million application backlog for income-driven repayment plans after the Trump administration shut down the system earlier this year following a new court order related to the SAVE plan litigation. Then, last month, Republican lawmakers pushed legislation through the House to reshape the federal student loan repayment system, although no legal changes are in effect quite yet. Here's the latest, and what borrowers should know about student loan interest accrual during these turbulent times. At least eight million federal student loan borrowers who had been enrolled in the SAVE plan are currently in a forbearance. A federal appeals court issued an injunction last summer blocking the program after a group of Republican state attorneys general filed a legal challenge, arguing that the Biden administration exceeded its authority by crafting a student loan repayment plan with such generous terms. The court blocked, but did not strike down, the SAVE plan, as the challenge continues. As a result, SAVE plan borrowers were put into a forbearance. The SAVE plan forbearance period does not count toward student loan forgiveness for both IDR purposes or for Public Service Loan Forgiveness, or PSLF. But borrowers don't have to make payments during the forbearance, and interest should not be accruing. 'You are in a general forbearance,' the Department of Education tells SAVE plan borrowers on its website, 'because your loan servicer is not currently able to bill you at an amount required by the court injunction. You will be in this forbearance until servicers are able to accurately calculate monthly payment amounts or the court reaches a decision on the availability of the SAVE Plan.' The department's notice indicates that during this general forbearance, 'You do not have to make your monthly payments on your student loans, interest is not accruing, and time spent does not provide credit toward Public Service Loan Forgiveness (PSLF) or IDR.' This week, millions of federal student loan borrowers who are in the SAVE plan forbearance received a notice from their loan servicer, MOHELA, telling them that interest is accruing on their loans. 'In an effort to keep you updated on your federal loan(s), we have enclosed details about your loans), including the accrued interest, interest rate, and total balance,' reads the notice. "The loan(s) listed in this letter are currently in forbearance. Although no payments are due at this time, interest continues to accrue on your loan(s) during the forbearance period. You have the option to pay the interest during forbearance." But for many of these borrowers, interest should not be accruing, and this mass notice provided misleading information, suggesting that borrowers should make payments on their student loans when no payment is due and no interest is accruing. Borrowers still in the SAVE plan forbearance can look to the second page of the letter, which should indicate that the interest rate for the covered loans is 0%, and no interest has accrued so far this year. After the notices were sent to borrowers, MOHELA issued a statement on its website clarifying the situation. 'If you recently received an interest notice for your student loan account, please know that this is not a bill, and no action is necessary at this time,' said MOHELA. 'For borrowers on the SAVE administrative forbearance, interest is currently set at 0%. Refer to your loan details in your notice.' Some borrowers in the SAVE plan forbearance are reporting that interest actually is accruing on their student loan balances. These borrowers are reportedly being told by their loan servicer that this is a mistake, and that the Department of Education should correct the error when the SAVE plan forbearance ends, likely later this year or sometime next year. However, some borrowers may be understandably concerned about this. If you're in the SAVE plan forbearance and not sure whether interest is accruing on your student loans, there are a few things you can do: Federal student loan borrowers should be aware that while the SAVE plan forbearance halts interest accrual, interest will continue to accrue on balances during most other forbearance periods. 'If you get a forbearance, you're still responsible for the interest that accrues while you're not making payments,' says general Department of Education guidance on forbearance periods. Importantly, this includes 'processing' forbearances, where a loan servicer places borrowers in forbearance if a student loan repayment application (such as for an IDR plan) takes longer than a couple of weeks to complete. 'Servicers may place borrowers into a different forbearance category, known as processing forbearance, if the servicers need additional time to process those borrowers' applications to enroll in IDR, recalculate their payments on an IDR plan, or recertify their incomes for their IDR plan,' says the Department of Education. 'In contrast to the general forbearance for borrowers enrolled in SAVE (previously known as REPAYE), interest will accrue while a borrower is in processing forbearance. Additionally, time spent in processing forbearance (up to 60 days) is eligible for PSLF credit. Processing forbearance will last no longer than 60 days." After that, borrowers may return to a general forbearance. Federal student loan borrowers should be aware that it is no longer possible to apply for the SAVE plan following the most recent court ruling earlier this year. This means that borrowers who aren't already in the SAVE plan forbearance cannot enroll, and therefore cannot benefit from the zero interest accrual benefit. Borrowers can still apply for other IDR plans, but interest will continue to accrue during any associated processing forbearance.
Yahoo
20-05-2025
- Business
- Yahoo
Just how many jobs and GDP dollars do US clean energy factories create?
American manufacturing has already surged in the clean energy sector, bringing with it significant economic rewards. That's the main takeaway from a census of U.S. clean energy factories, published today by the American Clean Power Association trade group. The report identifies 200 operating across 38 states as of early 2025. The production of solar panels leads the count with at least 90 facilities. About 65 factories are making batteries, while a smaller number produce equipment for onshore and offshore wind. A broader population of over 800 facilities plays a supporting role in the clean energy supply chain, manufacturing materials and subcomponents that turn the solar panels and batteries into full-fledged power plants. Those facilities already contribute 122,000 jobs and create $33 billion of economic activity annually, which includes earnings, goods and services produced, and payments to supporting industries, ACP found. Notably, 73% of these factories operate in what the report describes as 'Republican states' (as determined by presidential vote). That economic impact could grow to $164 billion by 2030 if the currently planned and announced factories come to fruition. The report came out as ACP met for its annual conference in Phoenix, but the intended audience includes the Republican members of Congress who will soon vote on cuts to the slew of tax credits underpinning this factory buildout. The report asserts that the burgeoning cleantech factory sector could 'be the foundation for American energy dominance that is built by Americans for Americans.' 'We have seen a tremendous amount of momentum over just even the past couple of years in clean energy manufacturing growth,' MJ Shiao, ACP's vice president of supply chain and manufacturing, said on a press call Friday. 'With stable tax and stable trade policy, we can really continue to amplify, grow that momentum.' Clean energy leaders have spent the months since the November election hoping that the sheer economic dynamism their factories inject into Republican congressional districts could overcome President Donald Trump's desire to unravel Joe Biden's legacies. It didn't help that the Democrats passed the Inflation Reduction Act, with its many highly targeted tax credits for clean energy deployment and manufacturing, on a party-line vote. But enough Republican representatives publicly argued against a wholesale repeal of the credits to give cleantech insiders hope. Indeed, the House Ways and Means Committee declined to eradicate the credits entirely in its budget proposal from last week. But the proposed tweaks to many of the individual programs narrow their scope and could render them wholly unworkable nonetheless. 'If they are implemented as currently drafted, which we certainly hope they are not, we will see factories shutting down,' Shiao said. 'We will see these American manufacturers have to lay people off, and we will see them having to tell their local business partners that they no longer have the opportunity to work with them.' In that light, the ACP report reads as a tabulation of what the country could miss out on if policy changes underway in Washington bring the onshoring trend to a staggering halt. The manufacturing job count could grow to 579,000 by 2030 if the other announced factory projects get built and come online. Total job count doesn't confirm how desirable the work is, but these jobs happen to pay quite well, especially solar manufacturing salaries, which averaged $134,000 in 2024. A Canary Media visit to the enormous QCells solar factory in Dalton, Georgia, last year showed why this work pays more than traditional manufacturing. The brand-new factories leverage considerable automation and robotic assistance for the heavy lifting and repetitive, high-precision tasks. Workers patrolled the lines and intervened when the machinery needed help. That greater output of an in-demand, high-tech product supported considerably higher pay than the carpet factories down the road. 'This is not our parents' generation's manufacturing,' Shiao said. 'There is automation, there is robotics, there is AI in these facilities. And that's a good thing, because these are high-tech, high-skill opportunities that are being brought into some of these communities that are really eager to find ways to keep their best, keep their brightest in the places that they grow up in.' Across cleantech factories, annual earnings from clean energy manufacturing averaged $118,000, the study found, well above the average U.S. worker's pay of $76,000. It's not just immediate employees who benefit, though. First comes the intensive but temporary construction phase. Once complete, the factories create additional work for support services in the region, such as shipping and delivery companies, food vendors, hotels for visiting customers, and waste disposal. Domestic manufacturing also relies on other component suppliers: Utility-scale solar panels sit on American steel trackers, covered in U.S.-made solar glass. The authors calculate that each job in a clean energy factory leads to three more in supporting industries. This reality sounds a lot like the vision that Trump campaigned on last year, of growing jobs at home by restoring U.S. manufacturing from the ravages of globalization. He also repeatedly emphasizes a desire to secure more critical minerals for the U.S.; clean energy technologies provide much of the expected demand growth for those minerals. 'This administration talks a lot about an all-of-the-above energy strategy that facilitates American energy dominance,' Shiao said. 'I think there needs to continue to be that recognition that solar, wind, energy storage are key pieces and critical pieces to realizing that growth, certainly in terms of the speed at which those projects can be deployed.' The Ways and Means budget proposal dealt a blow to the cleantech industry's hopes for a predictable investment landscape. It was also the opening volley of a weekslong negotiating process that will soon involve the Senate as well. Amid all that uncertainty, ACP has at least provided some fresh numbers on the value clean energy factories have created in their short moment of ascendancy, as well as helped clarify what's at stake. 'We think we've got a winning message, one that is bringing positivity, and of course, economic growth to the country,' said John Hensley, ACP's senior vice president of markets and policy analysis. 'We're going to continue to tell that story, and hopefully it lands on ears that are willing to listen.'
Reuters
19-05-2025
- Business
- Reuters
House bill would choke US solar investment, says top trade group
May 19 (Reuters) - Legislation advanced by Republicans in the U.S. House of Representatives last week could put 300 domestic solar and energy storage factories at risk and kill nearly 300,000 jobs, a top solar trade group warned on Monday. The analysis by the Solar Energy Industries Association comes amid a lobbying blitz aimed at convincing U.S. lawmakers to safeguard clean energy tax credits, which in the Republican plan would be phased out more quickly and face new restrictions on the use of Chinese-made components. "If this proposal becomes law, nearly 300 U.S. factories —mostly in red states — could close or never open, and we simply won't have the energy we need to power American innovation in AI and data centers," SEIA President Abigail Ross Hopper said in a statement. The proposed legislation targets key subsidies from former President Joe Biden's climate law, the Inflation Reduction Act, that support wind and solar power, hydrogen, and other climate-friendly technologies. Most of the solar and storage factories that benefit from the IRA tax credits are in Republican states that voted for President Donald Trump. The budget proposal would result in the loss of $220 billion in solar and storage investments by 2030, SEIA estimated. It would also cost 292,000 solar jobs, including 86,000 in manufacturing. Solar and storage, under existing policies, are expected to account for 73% of U.S. electric capacity additions between 2025 and 2030, making the sector critical to meeting soaring U.S. power demand. SEIA is urging Congress to revise the legislation, which still has several hurdles to clear before it can become law.
