NY Fed: End of Student Loan Payment Pause ‘Will Likely Increase Financial Hardship and Delinquency Rates’​​​

New research from the New York Fed estimates that student loan borrowers benefiting from the current interest-free pause are expecting pain whenever the pause ends, YahooFinance.com reported. "Our analysis suggests that the scheduled discontinuation of student debt forbearance on August 31 will likely increase financial hardship and delinquency rates," the authors at the New York Fed stated in a new blog post. The payment pause on federal student loans was recently extended through August 31, 2022. The pause had been set to expire after May 1 after being enacted by former President Donald Trump amid the coronavirus pandemic in March 2020 and extended multiple times by President Biden. Using data from the May 2021 Survey of Consumer Expectations, the researchers at the New York Fed highlighted how many student loan borrowers were unprepared to restart payments in multiple ways. If student loan forbearance were to be totally discontinued at the end of the month, the Fed researchers found that borrowers were expecting a 16.1% risk of delinquency on their student debt. The pre-pandemic student loan delinquency rate was 15.6% of borrowers. Those debtors without an income-driven repayment (IDR) plan expect even more adverse outcomes, "with an almost 50% higher expected delinquency rate," they added.

An expert panel at ABI's Annual Spring Meeting next week will examine issues surrounding student loan debt and bankruptcy. Are you registered?

Jobless Claims Dipped Lower Last Week Amid Tight Labor Market​​​

New applications for U.S. unemployment benefits fell slightly last week as employers clung to workers in a tight labor market, the Wall Street Journal reported. Initial jobless claims, a proxy for layoffs, decreased to 184,000 last week from 186,000 a week earlier, the Labor Department said Thursday. Jobless claims have hovered around half-century lows since late 2021 as the labor market has continued to improve during the economic recovery. The four-week average for claims, which smooths out volatility, nudged up to 177,250 from 172,750 a week earlier. Other signs of labor-market strength abound. The unemployment rate fell to 3.6% last month and is just above a half-century low touched before the pandemic. Employers have added an average of nearly 600,000 jobs each month this year through March. Continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, declined to 1.42 million for the week ended April 9 from the previous week’s total of 1.48 million. Other signs of labor-market strength abound: The unemployment rate fell to 3.6% last month and is just above a half-century low touched before the pandemic, and employers have added an average of nearly 600,000 jobs each month this year through March. (Subscription required.)

See You Next Week in D.C. for ABI's Annual Spring Meeting!

We look forward to seeing all of our attendees and sponsors next week at ABI's Annual Spring Meeting in Washington, D.C. Not registered? You will not want to miss:

• Our first in-person Annual Spring Meeting since 2019 — one of the largest gatherings of bankruptcy and insolvency professionals in the country

• A celebration of ABI’s 40 years of innovation and leadership, featuring a retrospective from some of the industry’s most respected and honored leaders

• Incisive programming on such topics as the “Texas two-step,” the monetization of intellectual property, subchapter V landmines, cybersecurity and much more

• An informative keynote on the current political scene by David Wasserman, senior analyst for The Cook Political Report with Amy Walter

• Opening Reception at The Wharf in D.C., plus lots of other opportunities to network face-to-face with friends and colleagues

We can’t wait to see you there! Click here to register!

CFPB Report Spotlights Medical Billing Challenges​​​

A report issued yesterday by the Consumer Financial Protection Bureau (CFPB) examines the financial consequences of medical billing and collections endured by individuals and families across the country. The report draws from the rising volume of medical billing and collection complaints submitted to the CFPB. The CFPB is using today’s research to strengthen its government and industry efforts to support patients and families suffering the consequences of medical billing and collections. People report that they receive medical bills that are inaccurate or not owed, and they describe the subsequent and significant difficulties identifying, verifying or eliminating the bills. People also report learning of an outstanding medical bill only after experiencing a drop in their credit score and being told that only by paying the bill will the negative collections information be removed from their credit report. When they did receive prior notice of medical bills in collections, people reported that debt-collectors included detailed medical information that resulted in privacy breaches of sensitive medical information. Many people reported paying medical bills to avoid adverse financial and privacy consequences, even when they did not believe the bill to be valid.

Analysis: How America’s Farmers Got Cut Out of the Supply Chain​​​

Beyond a logistical torment, the crisis assailing almond-producers is inflicting deep financial consequences, from diminished revenues to higher costs for storage. The same can be said for a broad array of other American agricultural exporters — from wheat-growers in North Dakota to soybean-producers in Nebraska — as shipping crops to customers has become maddening to the point of futility, the New York Times reported. The exasperation of agricultural exporters amounts to the latest chapter of the "Great Supply Chain Disruption," the tumultuous reordering of international trade and transportation amid the worst pandemic in a century. At the center of the story is the shipping container — the steel box that revolutionized commerce, allowing unfathomable quantities of goods to be carried around the planet. Shipping companies — which last year collectively secured profits reaching $190 billion — harvested especially enormous returns on their routes from Chinese ports to the West Coast of the United States.

Video Memoriam of Ed Creel​​​

ABI mourns the passing of one of its co-founders, L.E. "Ed" Creel. We are forever in debt to his service and commitment to ABI.


Learn more about Mr. Creel from a video that was originally produced for ABI's 25th anniversary in 2007, featuring Prof. Robert M. Zinman, Bill Brandt, Prof. G. Ray Warner, former U.S. Senator Dennis DeConcini (D-Ariz.), Deborah D. Williamson and Robin Phelan speaking about Ed, and his commitment to ABI and helping others advance within the profession. Watch here.

Bankruptcy Judges Have Taught Financial Literacy with CARE for 20 Years​​​

After a two-year hiatus from in-person outreach programs due to COVID-19, bankruptcy judges have been returning to classrooms to teach students how to manage personal finances with informed planning and decision-making, according to a press release from the U.S. Courts. Bankruptcy judges have participated in the Credit Abuse Resistance Education (CARE) initiative for 20 years, helping to mobilize judges and bankruptcy professionals interested in teaching financial literacy throughout the country. “I’m proud of the program’s generational impact on families when students participate and bring information home to their parents,” said Bankruptcy Chief Judge Mildred Cabán, who runs a CARE-based program in the District of Puerto Rico. CARE was established in 2002 by retired Bankruptcy Judge John C. Ninfo II in Rochester, N.Y. ABI now administers the program, having expanded it into a national nonprofit organization that helps local CARE programs reach high schools, colleges and community youth groups across the country. April marks National Financial Literacy Month, although bankruptcy judges work year-round planning creative programs with court staff, the bankruptcy law community and nonprofit organizations to help audiences of all ages understand personal finance and avoid falling victim to deceptive credit traps. For more information and to volunteer with CARE, click here.

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!