Latest news with #repayment
The Guardian
3 days ago
- Business
- The Guardian
‘It would destroy me': fear of student loan default haunts US borrowers
When David* logs into the online portal for his federal student loans, he sees some big numbers staring back at him: he owes more than $27,000 in his own name, plus about $63,000 in loans that are co-signed with his father but that he pays off himself. 'It's sort of an inconceivable amount to think about paying off anytime soon,' says David, a 26-year-old in Seattle who graduated as a political science major in 2021, and now works for a non-profit. 'You almost never see yourself paying it off.' The worst part for David is that, next to information about his debts, it says in large red letters: 'PAST DUE.' David says right now repayments of about $500 a month are needed for his loan debts, which 'feels crushing' after rent and utilities of about $1,500 a month in Seattle. He missed loan repayments for the month of June. About 5.8 million federal student loan borrowers – roughly 31% – were 90 days or more past due on their payments as of April 2025, according to analysis from TransUnion, as delinquency and default rates soar in the wake of pandemic-era repayment relief ending. US federal student loan debt is worth almost $1.7tn, with 42.7 million people owing some form of federal loan debt. And in May, the Trump administration resumed collecting on defaulted student loans after a five-year pause started during the pandemic. About 1.8 million borrowers are at risk of falling into default – which occurs once they are 270 days past due – making them subject to wage garnishment and other collection actions by the Department of Education, and having a ruinous impact on people's credit scores. While the $27,000 loans in David's name are currently in forbearance, it is those co-signed by his father that are not – and past due. He says when he missed a payment it caused friction in their relationship. 'My dad's credit score dropped by like 50 points,' David says. 'It's difficult to navigate that. He was angry.' Michael James, a 26-year-old in Sioux City, Iowa, studied at Iowa State University and then the University of South Dakota. But, before graduating, he was forced to stop full-time studying and take on full-time work for financial reasons. Five years on from leaving his studies unfinished, James owes almost $18,500 in federal student loan debt. Even though his loan is currently in forbearance – which means he's not paying anything towards it, but interest keeps climbing – he's 'immensely' worried about defaulting. 'A default would absolutely destroy me for the next 10 years of my life, there's no amount of hard-working that's going to remove a default from a credit file,' he says. Barbara, a 62-year-old in Auburn, Maine, has found that even paying hundreds of dollars a month for more than two decades hasn't stopped the debt hanging over her due to eye-watering interest. Barbara borrowed about $60,000 in federal student loans for a master's program in psychiatric nursing at New York University, graduating in 2001. She paid off at least $66,000 over 20 years, but due to interest, she still owes nearly $61,700, according to documents shared with the Guardian. Barbara said her husband would like to retire, and she's trying to put money towards retirement, too, but the debt is stopping her. One of her loans even has an estimated repayment year of 2054. 'I'll be 91,' she says. Federal student loans cannot typically be discharged in bankruptcy court, unlike other forms of loan, which Barbara and other borrowers want to see changed. Barbara says she's currently putting two kids through college and trying, as far as possible, to help them do it without federal student loans. 'I don't want them to get caught with that noose around their necks,' she says. Over the Fourth of July weekend, Sean Redmond's wife and children – an eight-year-old son and three-year-old twins – traveled from their home in Perkasie, Pennsylvania, to upstate New York to see family. But Redmond, 46, stayed behind, working overtime at his job in pharmaceutical manufacturing. He has federal student loan debt of $61,696, and after a period of forbearance which ends on 30 August, he'll need to pay $806 a month. 'I know I have the ability to get extra hours to get the money to pay it, it's just more of an annoyance, a hassle,' Redmond says. It means more evenings and weekends sacrificed to working overtime, less time spent with his family. 'I had hopes for Trump when he got elected and he talked about dismantling the Department of Education and stuff,' Redmond says. He thought this might have meant federal student loans being able to be canceled on the same terms as other loans in bankruptcy court. But Redmond found it 'disappointing' that the Trump administration later said what remains of the department will continue to govern student debt. Peter is a 31-year-old museum worker in Washington state. After graduating with a fine arts degree in 2016, he has nearly $22,000 to repay in federal loans. He says education in the US is 'unnecessarily expensive', and that even with the relative security of full-time work, it's a financial struggle as 'the cost of living is becoming more and more extreme'. Peter is not currently at risk of default, because he's implemented an income-driven repayment plan. But he said the idea of paying off the loans seems far-fetched. It's 'a very important thing for our society' to have people working in the arts, he said, 'and I push back on the idea that, 'Well, you should have just got a degree in something else' – that minimizes the value of the arts'. Peter, however, says he can't imagine a future in which he's free from debt: 'It's like a staple of American life, that you're in debt in some way, shape or form.' *Some names changed
The Guardian
4 days ago
- Business
- The Guardian
‘It would destroy me': fear of student loan default haunts US borrowers
When David* logs into the online portal for his federal student loans, he sees some big numbers staring back at him: he owes more than $27,000 in his own name, plus about $63,000 in loans that are co-signed with his father but that he pays off himself. 'It's sort of an inconceivable amount to think about paying off anytime soon,' says David, a 26-year-old in Seattle who graduated as a political science major in 2021, and now works for a non-profit. 'You almost never see yourself paying it off.' The worst part for David is that, next to information about his debts, it says in large red letters: 'PAST DUE.' David says right now repayments of about $500 a month are needed for his loan debts, which 'feels crushing' after rent and utilities of about $1,500 a month in Seattle. He missed loan repayments for the month of June. About 5.8 million federal student loan borrowers – roughly 31% – were 90 days or more past due on their payments as of April 2025, according to analysis from TransUnion, as delinquency and default rates soar in the wake of pandemic-era repayment relief ending. US federal student loan debt is worth almost $1.7tn, with 42.7 million people owing some form of federal loan debt. And in May, the Trump administration resumed collecting on defaulted student loans after a five-year pause started during the pandemic. About 1.8 million borrowers are at risk of falling into default – which occurs once they are 270 days past due – making them subject to wage garnishment and other collection actions by the Department of Education, and having a ruinous impact on people's credit scores. While the $27,000 loans in David's name are currently in forbearance, it is those co-signed by his father that are not – and past due. He says when he missed a payment it caused friction in their relationship. 'My dad's credit score dropped by like 50 points,' David says. 'It's difficult to navigate that. He was angry.' Michael James, a 26-year-old in Sioux City, Iowa, studied at Iowa State University and then the University of South Dakota. But, before graduating, he was forced to stop full-time studying and take on full-time work for financial reasons. Five years on from leaving his studies unfinished, James owes almost $18,500 in federal student loan debt. Even though his loan is currently in forbearance – which means he's not paying anything towards it, but interest keeps climbing – he's 'immensely' worried about defaulting. 'A default would absolutely destroy me for the next 10 years of my life, there's no amount of hard-working that's going to remove a default from a credit file,' he says. Barbara, a 62-year-old in Auburn, Maine, has found that even paying hundreds of dollars a month for more than two decades hasn't stopped the debt hanging over her due to eye-watering interest. Barbara borrowed about $60,000 in federal student loans for a master's program in psychiatric nursing at New York University, graduating in 2001. She paid off at least $66,000 over 20 years, but due to interest, she still owes nearly $61,700, according to documents shared with the Guardian. Barbara said her husband would like to retire, and she's trying to put money towards retirement, too, but the debt is stopping her. One of her loans even has an estimated repayment year of 2054. 'I'll be 91,' she says. Federal student loans cannot typically be discharged in bankruptcy court, unlike other forms of loan, which Barbara and other borrowers want to see changed. Barbara says she's currently putting two kids through college and trying, as far as possible, to help them do it without federal student loans. 'I don't want them to get caught with that noose around their necks,' she says. Over the Fourth of July weekend, Sean Redmond's wife and children – an eight-year-old son and three-year-old twins – traveled from their home in Perkasie, Pennsylvania, to upstate New York to see family. But Redmond, 46, stayed behind, working overtime at his job in pharmaceutical manufacturing. He has federal student loan debt of $61,696, and after a period of forbearance which ends on 30 August, he'll need to pay $806 a month. 'I know I have the ability to get extra hours to get the money to pay it, it's just more of an annoyance, a hassle,' Redmond says. It means more evenings and weekends sacrificed to working overtime, less time spent with his family. 'I had hopes for Trump when he got elected and he talked about dismantling the Department of Education and stuff,' Redmond says. He thought this might have meant federal student loans being able to be canceled on the same terms as other loans in bankruptcy court. But Redmond found it 'disappointing' that the Trump administration later said what remains of the department will continue to govern student debt. Peter is a 31-year-old museum worker in Washington state. After graduating with a fine arts degree in 2016, he has nearly $22,000 to repay in federal loans. He says education in the US is 'unnecessarily expensive', and that even with the relative security of full-time work, it's a financial struggle as 'the cost of living is becoming more and more extreme'. Peter is not currently at risk of default, because he's implemented an income-driven repayment plan. But he said the idea of paying off the loans seems far-fetched. It's 'a very important thing for our society' to have people working in the arts, he said, 'and I push back on the idea that, 'Well, you should have just got a degree in something else' – that minimizes the value of the arts'. Peter, however, says he can't imagine a future in which he's free from debt: 'It's like a staple of American life, that you're in debt in some way, shape or form.' *Some names changed
Irish Times
23-07-2025
- Business
- Irish Times
Financial consultant who misappropriated funds to repay money, court told
A financial consultant has given a number of undertakings to the High Court to take steps to repay money he misappropriated from two companies he was engaged to wind up. Accountant David Kennedy and David Kennedy Financial Consulting of David Kennedy Financial Consulting Ltd, Orwell Shopping Centre, Templeogue, Dublin, consented to several orders, including judgment against him personally in the sum of €588,301 in favour of the two companies owned by third parties. On Wednesday, the court was told Mr Kennedy was taking steps to wind up his business, as he had a number of other liquidations which he had to deal with beforehand. Mr Justice Brian Cregan said it was a matter of significant concern that in circumstances where Mr Kennedy admitted misappropriation and breach of duties that he could 'possibly continue for a day longer as a liquidator'. READ MORE Micheál D O'Connell SC, for the defendants, said the orders made preclude him from misappropriating funds for other 50 companies he was dealing and it was necessary that they be wound down in an orderly fashion. It is anticipated allowing him to continue in his role for the time being will enable him to improve the situation not only in relation to the clients in this case but to others who are affected. Jarlath Ryan SC, for the plaintiff companies, said his side was satisfied that was addressed by obligations in the part of the orders restraining him from only to paying €1,000 per business transaction apart from normal wages, all monitored by the liquidators put in to replace him. He also must 'come clean' and disclose all other assets, he said. The judge said he wanted the Association of Chartered Certified Accountants (ACCA) to be notified and supplied with court papers so that it could tell the court whether it wished to be a notice party in the case. The other orders require that Mr Kennedy is only entitled to €15,000 in living expenses until the end of October and that he repay funds he had diverted from the plaintiff companies and restraining him from reducing assets in his consulting company below €588,301. He must also transfer €300,000 from a Bank of Ireland account he held to Micheál Leydon, the receiver who has now been appointed by the court to recover the funds. The court heard he had already transferred €200,000 from that account back to receivers who replaced in as liquidators of the plaintiff companies. He must deliver to those liquidators all books and records of those companies. The court heard gardaí were investigating him and had removed records and the Office of Corporate Enforcement had also been notified. The orders provide that proceedings against his wife, Danielle Colgan, who is also a defendant, can be adjourned generally on payment of €19,000 to the receiver. Mr O'Connell said she was the unknowing recipient of funds from her husband. Ms Colgan is the sole shareholder of David Kennedy Financial Consulting. Earlier this month, the court granted orders freezing assets of the defendants below €800,000, the sum which Mr Kennedy was engaged to capitalise on behalf of the two plaintiff companies. When the case returned, the court was told Mr Kennedy had 'put his hands up' in relation to the misappropriation and wished to be as much assistance as he can in recovering the money. Mr Justice Cregan adjourned the case to October but said in the meantime he would like to hear from the ACCA in relation to possibly making it a notice party.
Yahoo
23-07-2025
- Automotive
- Yahoo
Tampa woman turns to Ramsey Show hosts after her brother refused to repay a car loan she took out to help him
Four years ago, Carmen from Tampa, FL, did her brother a solid by letting him move into her home when he was low on cash. She didn't charge him rent and she even took out a car loan for him — in her name. Fast forward to now, and their fortunes are reversed. Carmen needs the money, but her brother doesn't want to repay the car loan. During an episode of The Ramsey Show, Carmen said her brother has 'fully recovered' from his financial woes. He works on commission, has stocks, CDs and retirement savings, and 'is living a good life,' she said. Yet, when it comes to the car loan, he told his sister he wasn't going to 'take that upon my credit.' As Carmen pondered whether she should pay off the remaining loan herself — which is around $11,000 — co-host Ken Coleman told her: 'You know what you're supposed to do.' Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it What happened? Carmen's husband made a career switch that she says will eventually pay off, but in the meantime, they're bringing in less money. And to get a mortgage, they were told by their lender that they need to get rid of the car loan debt first. Carmen didn't just co-sign the loan; she put it under her name. So her brother is making monthly payments to Carmen on a car that's not in his name and that 'he's never going to own,' said co-host Jade Warshaw. If he's not willing to pay back the full amount of the loan, then Carmen has every right to repossess the vehicle. 'That is not mean, Carmen. That is not a bad sister,' said Warshaw. 'That is just you doing something that is very normal and fair by saying, 'if I'm paying for a car that's in my name, I'm going to be the one owning it and driving it.'' If her brother wants to keep making monthly payments, 'then he needs to go rent a car,' said Warshaw. Carmen said a private seller would pay $19,000 for the vehicle. 'I would go get that car from your brother today and sell it instantaneously,' said Coleman. At that point, her brother can decide whether he wants to buy the car from her, in which case he can pay back his sister for the full amount of the loan and she can transfer the title over to him. If he's not interested in buying it, she can find another buyer and pay back the loan from the proceeds. Still, Carmen is hesitant because she doesn't want to cause a rift in the family. 'It already has,' said Warshaw. 'The damage you're worried about being done has already been done.' Warshaw said she wants Carmen to be respected. 'It's a disrespectful transaction and if you let it continue, he's not just disrespecting you — you're disrespecting yourself at that point.' Read more: Americans are 'revenge saving' to survive — but millions only get a measly 1% on their savings. Should you loan a family member money? While you may want to help out a family member in need, a 'friends and family' loan should still be treated as any other loan. Otherwise, you could consider the money a gift (particularly if you don't think you'll ever see that money again). About one-third of U.S. adults have provided financial support to friends or family, according to the Consumer Financial Protection Bureau (CFPB). It could make sense in some circumstances — for example, parents may loan their adult child some money when they're just starting out in their career or don't yet have a credit history to qualify for a loan. Whatever the case, if you're thinking about lending money to a friend or family member, first consider your own financial situation — for example, it's probably not a good idea to drain your own emergency fund to pay for a family member's emergency. And, if you do have some extra cash, how much of it can you afford to part with and for how long? If you do lend money to a friend or family member, put it in writing (you can find several options for templates online by searching under loan agreements). This contract should outline the terms of the loan, such as when you expect it to be repaid (either in a lump sum or a series of payments over a specified period of time). You should also specify whether you'll be charging interest on the loan (perhaps the rate you'd be getting if that money was sitting in your high-interest savings account) and what the consequences will be if they can't pay you back. For example, in Carmen's case, if she had made her brother sign a contract before getting a car loan, she could have specified that she'd take back possession of the vehicle if he didn't pay back the loan in full by a certain period of time. Another option is co-signing a loan, but only do so if you trust this person — not because you're feeling pressured by your family to do so. A co-signer is a person 'who agrees to be legally responsible for someone else's debt,' according to Equifax, one of the three major credit reporting agencies in the U.S., along with Experian and TransUnion. This provides a safety net to lenders, but it also means the co-signer is legally responsible for that debt if the borrower is unable to pay it back. Plus, if you're the co-signer, that debt will show up on your credit report and could influence your credit score and/or debt-to-income ratio. If the borrower fails to make payments, that will harm your credit rating — and it will likely put a strain on your relationship. If you're already in that situation, like Carmen, there's no easy way out. 'We didn't say this was going to be fun but… it's already not fun,' said Coleman, 'so let's go ahead and rip the band-aid off and take possession of the car.' What to read next Robert Kiyosaki warns of 'massive unemployment' in the US due to the 'biggest change' in history — and says this 1 group of 'smart' Americans will get hit extra hard. Are you one of them? How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you'll need a substantial stash of savings in retirement Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
21-07-2025
- Business
- Yahoo
Blair urged to pay back thousands on discounted designer clothes, files show
Prime minister Tony Blair was advised to repay thousands of pounds in discounts which he received on designer clothes, according to newly-released official files. Papers released to the National Archives show that No 10 officials recommended he should pay back more than £7,600 on items bought from Nicole Farhi and Paul Smith. The discounts were negotiated by his wife Cherie's controversial friend and style adviser, Carole Caplin, who bought clothes for Mrs Blair. Ms Caplin told officials that because she bought the clothes wholesale she was able to to secure discounts of up to 60% – including on items bought for Mr Blair as well. However, officials were concerned that such large discounts would not be available to ordinary members of the public. According to the files, between July 2001 to December 2002 the couple spent £8,021.50 with one designer alone – Nicole Farhi – when the retail price would have been £20,855. It meant the total discount they received came to £12,8343, more than the total amount they spent. Initially, officials advised that Mr Blair should repay the discounts he received in full – around £10,000 – and that Mrs Blair should pay back half the benefits she obtained – £28,000. Clare Sumner, a No 10 official, wrote: 'We are not arguing that anything has been done wrong, indeed nothing has. The issue is one of public perception.' However, after discussions with the cabinet secretary Sir Andrew Turnbull it was agreed that Mrs Blair did not receive any 'preferential or beneficial treatment' in her role as prime minister's wife. It was agreed, however, that the suppliers would in future have to sign confidentiality agreements to ensure there was no incentive for them to provide goods cheaply in order to exploit the fact they the prime minister's wife wore their clothes. But for Mr Blair, however, officials said they believed he still should pay the full amount, advising him to write cheques for to £1,116 to Paul Smith and £6,532 to Nicole Farhi. Ms Sumner wrote: 'For you, we still think the simplest thing is to pay for your clothes in full and that Carole should be made aware of this for the future.'
