Biden Administration Wants to Ease Student Loan Forgiveness for Some​​​

Students could have a clearer path to loan forgiveness and affordable repayment of their education debt under plans unveiled yesterday by the Biden administration, the Washington Post reported. The rash of proposals overhaul several programs designed to discharge federal student loans when borrowers are defrauded by their colleges, as well as those who are permanently disabled, spend years in public service or face a school closure. These decades-old programs have been widely criticized for being difficult to navigate and for failing people who count on them. Collectively, the proposals amount to some of the most significant updates to the federal student loan repayment system in years, but are sure to be met with pushback from industry leaders, conservatives and some liberal advocates. “We are committed to fixing a broken system. If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to obtain it,” Education Secretary Miguel Cardona said Wednesday. “Student loan benefits also should not be so hard to get that borrowers never actually benefit from them.” Department officials are aiming to have the rules in place by November, which means they would take effect next July. People can submit comments on the proposed rules over the next 30 days. The proposed changes would cost $85 billion over the coming decade, according to the department. Among the proposals is an update to the “borrower defense to repayment” statute, which clears the debts of students whose colleges used illegal or deceptive tactics to persuade them to borrow. The Biden administration wants to streamline the process by allowing for group claims, relaxing the limits on when borrowers can file an application and giving borrowers timely decisions about their claims. The department is also expanding the types of violations that would make borrowers eligible for loan forgiveness to include aggressive and deceptive recruitment practices, a charge that has been lobbed at a number of for-profit colleges including the University of Phoenix. Read more. 

Click here to read the Department of Education's press release.

Add Rent to the Rising Costs Bedeviling Small Businesses​​​

The rent has come due for America’s small businesses and at a very inopportune time, the Associated Press reported. Landlords were lenient about rent payments during the first two years of the pandemic. Now, many are asking for back rent, and some are raising the current rent as well. Meanwhile, most of the government aid programs that helped small businesses get through the pandemic have ended while inflation has sharply pushed up the cost of supplies, shipping, and labor. Thirty-three percent of all U.S. small businesses could not pay their May rent in full and on time, up from 28% in April, according to a survey from Alignable, a small business referral network. And 52% said rent has increased over the past six months. Data from the commercial real estate financing and advisory firm Marcus & Millichap shows rent rose 4.6% in the first quarter of 2022 compared with the year-ago quarter as the vacancy rate dropped to 6.5%, the lowest since before 2015. But Daniel Taub, national director of retail sales at Marcus & Millichap, said that inflation will make it harder for landlords to impose rent increases as the consumer begins to feel squeezed.

Read more. 

Next Tuesday: Experts on FREE abiLIVE Bankruptcy Filing Trends Through First Half of 2022, What Lies Ahead ​​​



In partnership with Epiq, a key abiLIVE webinar on July 12 will feature experts looking at filing trends through June 30 and providing their thoughts on what could happen with bankruptcies moving forward. Speakers on the program include ABI President Hon. Kevin Carey (ret.) of Hogan Lovells (Philadelphia), Deirdre O’Connor of Epiq (New York) and ABI's Ed Flynn (Alexandria, Va.). Christopher Kruse of Epiq (San Francisco) will serve as moderator for the program. Click here for your complimentary registration.

U.S. Weekly Jobless Claims Increase; Layoffs Hit 16-Month High in June​​​

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week and there are growing signs that demand for labor is cooling, with layoffs surging to a 16-month high in June as the Federal Reserve's aggressive monetary policy tightening stokes recession fears, Reuters reported. But the weekly jobless claims data from the Labor Department on Thursday was likely distorted by Monday's Independence Day holiday, which resulted in several states, including California, submitting estimates. Nevertheless, the labor market is losing momentum. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 235,000 for the week ended July 2, the highest level since January. Economists say claims need to rise above 250,000 on a sustained basis to raise concerns about the labor market's health. Unadjusted claims increased 11,919 to 219,507 last week. Claims for California, which saw a big jump in applications, were estimated as were those for Connecticut, Kansas, Louisiana, Nebraska, Tennessee and Virginia. There is a chance the claims data will be revised next week. Claims have been bouncing around the 230,000 level since the beginning of June, underscoring the labor market's strength even as some companies in the housing and technology sectors have been cutting jobs. Tesla has laid off hundreds of workers in the United States.

Read more. 

Don’t Miss Bankruptcy's Maine Event: ABI Northeast Kicks Off Next Thursday! Sessions on Regulatory Issues in Energy Restructurings, Health Care M&A, Lifecycle of a Subchapter V and More!​​​

Attendees will join a faculty comprised of 16 active and retired judges, top practitioners and leading academics at ABI’s 2022 Northeast Bankruptcy Conference and Consumer Forum, taking place July 14-17 at the Samoset Resort in Rockport, Maine. The conference is eligible for up to 10.25/12 hours of CLE/CPE, including 2.75/1.3 hours of ethics, and will again offer a separate three-day Consumer Forum at a reduced registration rate. Enjoy engaging panels and relaxing networking with fantastic coastal views. Register today!

Retailers Scale Back Hiring as Worry about a Slowdown Grows​​​

After going on a frenzied hiring spree for a year and a half to meet surging shopper demand, America’s retailers are starting to temper their recruiting, the Associated Press reported. The changing mindset comes as companies confront a pullback in consumer spending, the prospect of an economic downturn and surging labor costs. Some analysts suggest that merchants have also learned to do more with fewer workers. The nation’s top employer, Walmart, said that it recently over-hired because of a COVID-related staffing shortage and then reduced its head count through attrition. In April, Amazon said it, too, had decided that it had an excess of workers in its warehouses. And FedEx, whose customers include big retailers, said late last month that it was hiring fewer people. In addition, new data shows that retailers in recent months have been scaling back sign-on bonuses and are no longer relaxing job requirements — a sign that they no longer feel compelled to expand their applicant pool, according to the labor analytics company Emsi Burning Glass. And Snagajob, an online marketplace for hourly work, reports that job postings in retailing have been slowing in the past couple of months, though they remain up from a year ago. Retailers “are going to take a conservative view of what’s possible and what’s necessary, because the price they will pay for being wrong will be minimum if they run out of goods and don’t have enough staff, and massive if they wind up with an inventory glut and they have too many people employed,” said Mark Cohen, director of retail studies at Columbia University and a former CEO of Sears Canada. The easing of retail hiring is happening in a labor market that has undergone volatile swings throughout the recovery from the pandemic recession of 2020. Early on, companies like Amazon, Target and Walmart that provide necessities and goods for the home stepped up their hiring to meet a crushing demand from online shoppers. At the same time, stores like Macy’s and Nordstrom whose clothing lines were considered non-essential by many at the time, temporarily laid off workers during nationwide lockdowns.

Read more. 

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!