Nearly 26 Million Borrowers Have Applied for Student Loan Forgiveness, but Legal Challenges Persist​​​

The White House said today that close to 26 million Americans have applied for student loan forgiveness, and the Biden administration has already approved 16 million of the requests, CNBC.com reported. Yet its entire loan-cancellation plan could be in jeopardy due to the legal challenges brought by Republicans, it warned. Since the White House unveiled its plan in August to cancel $10,000 for most student loan borrowers, and up to $20,000 for those who received grants for low-income families, it has faced at least six lawsuits. Most recently, a legal challenge from six GOP-led states temporarily stopped the administration from starting to forgive borrowers’ debt. Although their lawsuit was rejected by a federal judge in Missouri earlier this month, the states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — have appealed. U.S. District Judge Henry Autrey in St. Louis ruled earlier this month that while the states had raised “important and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case. The main obstacle for those hoping to foil the president’s action has been finding a plaintiff who can prove they’ve been harmed by the policy, experts say. Read more.

Surging Rents Push More Americans to Live with Roommates or Parents​​​

After a long stretch of record-high rents, Americans are renting fewer apartments as demand in the third quarter fell to its lowest level in 13 years. Some renters are choosing to take on roommates, while others are boarding with family or friends. More people are opting to stay longer in their parents’ homes or moving back in, rather than pay steep rent increases, according to a recent UBS survey, the Wall Street Journal reported. Apartment demand in the quarter, measured by the one-year change in the occupancy of units, was the lowest since 2009, when the U.S. was feeling the effects of the subprime crisis, according to rental software company RealPage. Measured quarterly, the drop in demand was the worst of any third quarter — normally prime leasing season — in the more than 30 years RealPage has compiled the data. Meanwhile, the apartment-vacancy rate rose to 5.5% in the third quarter, up from 5.1% the quarter prior, according to property data firm CoStar. Rents have risen 25% over the past two years, according to rental website Apartment List, pushing many renters beyond what they can now afford. Meanwhile, inflation on other essential goods, such as food and energy, is also eating into how much people have left to spend on housing. (Subscription required.) Read more.

Sessions Examining Student Loans, Consumer Filing Trends, Subchapter V and More at CPEX22! 30+ Hours of Online Programming and Networking for Just $100!​​​

The virtual Consumer Practice Extravaganza, being held Nov. 10-18, promises to be the premier consumer debt event of the year. Leading practitioners will explore the latest consumer debt practices in five session tracks — Student Loans, Technology and the Future, Subchapter V of Chapter 11, Well-Being and Nontraditional Practice — ensuring that there is something for everyone. CPEX22 will also feature a range of special “demo days” showcasing technology and money-saving tools especially designed for consumer practitioners, circuit-specific breakout sessions, and plenaries focused on issues relevant to the entire consumer bench and bar. Register for all this and more for only $100! 

Slightly Fewer Americans Applied for Jobless Aid Last Week​​​

Applications for jobless benefits fell slightly last week with the U.S. job market remaining resilient in the face of rising interest rates and persistent inflation, the Associated Press reported. Unemployment claims for the week ending Oct. 29 fell by 1,000 to 217,000 from 218,000 the previous week, the Labor Department reported Thursday. The four-week moving average ticked down by 500 to 218,750. Considered a proxy for layoffs, applications for jobless claims have remained historically low this year, even as the Federal Reserve has cranked up its benchmark borrowing rate six times in its efforts to cool the economy and tame inflation. The total number of Americans collecting unemployment aid rose by 47,000 to 1.49 million for the week ending Oct. 22, the highest in seven months, but still not at a troubling level. Read more.

Retailers Predict Record Holiday Sales Amid Historic Inflation​​​

Holiday retail sales are set to grow between 6 and 8 percent this year, according to an estimate from the National Retail Federation (NRF), as inflation remains stubbornly high, The Hill reported. Spending from Nov. 1 to Dec. 31 could total as much as $960 billion, a record-shattering figure, showing that consumers continue to spend even as inflation hits their wallets. The predicted growth would mark a slowdown from 2021, however, when year-over-year holiday sales rose 13.5 percent. While the bulk of the anticipated sales increase will be driven by higher prices — NRF estimated that most categories will be up 4 to 5 percent annually — the organization noted that volumes are expected to continue to rise as well. NRF president and CEO Matthew Shay said that spending by higher-income individuals remains strong, while less wealthy households are increasingly tapping into their savings or taking on debt to buy products. Read more.

U.S. Factory Orders Rise Moderately in September​​​

New orders for U.S.-manufactured goods increased moderately in September as a surge in bookings for civilian aircraft was partially offset by declines elsewhere, suggesting a loss of momentum in manufacturing amid rapidly rising borrowing costs, Reuters reported. The Commerce Department said on Thursday that factory orders rose 0.3% after gaining 0.2% in August. September's increase was in line with economists' expectations. Orders advanced 13.0% on a year-on-year basis in September. Demand for goods is slowing also as spending rotates back to services. The Federal Reserve on Wednesday raised its policy rate by another three-quarters of a percentage point to a range of 3.75% to 4.00%, but signaled future increases in borrowing costs could be made in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far. It was the fourth straight 75-basis-point rate hike as the Fed fights to bring inflation back to its 2% target. A survey from the Institute for Supply Management early this week showed that its manufacturing PMI fell to its lowest level in nearly 2-1/2 years in October, with new orders remaining subdued. Comments from manufacturers ranged from "customers are canceling some orders" to orders are slowing "substantially." Manufacturing accounts for 11.3% of the U.S. economy. Read more.

U.S. Probes Insider Trading in Prearranged Executive Stock Sales​​​

U.S. authorities are investigating whether executives have been gaming prearranged stock-sale programs designed to thwart the possibility of insider trading, Bloomberg News reported. The Justice Department and Securities and Exchange Commission are using computer algorithms in a sweeping examination of preplanned equity sales by C-suite officials, according to people familiar with the matter. Investigators are concerned that some people are manipulating the stock-sale programs, which are intended to shield executives from misconduct allegations by letting them schedule transactions in advance and on preset dates. Critics say the plans have many possible loopholes. There’s no cooling-off period, so executives may adopt one and then use it to trade just days later. Insiders can nix scheduled trades that would cause them to miss out on a stock-price bump tied to good corporate news. What’s more, executives can also have multiple overlapping plans, increasing opportunities for such abuses. Corporate America has widely adopted the so-called 10b5-1 plans since the SEC created rules for them two decades ago, and they’re now responsible for thousands of transactions collectively worth billions of dollars annually. Yet the agency hasn’t updated the regulations in years, the program’s recordkeeping has been antiquated, and recent academic research has pointed to significant gaps in surveillance. The share-sale plan investigations, which are being led by the Justice Department’s fraud section in Washington and SEC enforcement attorneys, are the latest examples of authorities taking a tougher line on long-standing Wall Street trading practices during the Biden era. Read more.

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