Biden Officials Signal They Might Extend Student Loan Payment Freeze​​​

The Biden administration dropped a new hint this week that it may further extend the freeze on federal student loan payments for tens of millions of borrowers as the White House weighs a final decision, Politico reported. Education Department officials instructed the companies that manage federal student loans to hold off on sending required notices to borrowers about their payments starting. The guidance to loan servicers did not announce a further extension of the payment pause, the officials said, but the directive is the clearest indication yet that the Biden administration is leaning toward another extension of the pandemic relief. White House chief of staff Ron Klain said last week that such an extension was under consideration by the Biden administration as it grapples with a broader question of whether to cancel large swaths of student debt. The administration has not said publicly how long an extension it may consider. Monthly payments and interest on most federal student loans have been suspended since then-President Donald Trump signed the CARES Act in March 2020. The Trump and Biden administrations both extended the relief through executive action multiple times. Most recently, the White House in December reversed course at the last minute and announced it was again extending the payment pause after pressure from a wide range of Democrats. By that time, the department and its contractors had already sent millions of notices to borrowers about payments resuming. The department’s guidance to loan servicers this week reflects the logistical challenges that the agency faces when it comes to switching back on the massive $1.6 trillion portfolio of student loans that’s largely been frozen for the past two years.

Annual Inflation Increase Hits 7.9 Percent, Fastest Rate Since 1982​​​

Consumer prices rose 0.8 percent in February and 7.9 percent over the last 12 months, according to data released today by the Labor Department, The Hill reported. The Labor Department’s consumer price index (CPI), a key gauge of inflation, showed price growth speeding up on both a monthly and annual basis. Rising prices for gasoline, housing and food drove most of February’s inflation spike, the department said. Economists expected prices to rise roughly 7.9 percent on an annual basis and 0.6 percent between January and February. Annual inflation jumped to the highest rate since 1982 in February, and monthly inflation rose for the first month since October 2021. Rising prices for food, energy, shelter and a wide range of consumer goods have squeezed household budgets amid an otherwise strong recovery from the COVID-19 pandemic. Grocery prices rose 1.4 percent in February alone and are up 8.6 percent on the year — the fastest annual increase since April 1981. Energy prices rose 3.5 percent last month, led by a 6.6 percent monthly increase in gasoline prices and a 7.7 percent increase in fuel oil prices. Without food and energy prices, which are historically more volatile, the CPI rose 0.5 percent in February and 6.4 percent on the year.

Expected Rent Spike Adds to Record Inflation​​​

Rising rents are straining household budgets and fueling higher inflation as the rental market enters its hottest stretch of the year, The Hill reported. Rents skyrocketed in 2021 as the economy recovered from the recession caused by the COVID-19 pandemic and a surge in demand for housing overwhelmed a meager supply of vacant units. The average monthly rent rose 15.2 percent year-over-year in January, according to data from real estate firm RedFin, and is set to steam ahead thanks to a mix of long-term trends and pandemic-related shocks. Rents had risen steadily before the pandemic, as housing construction fell way behind the demand for new homes. Rapidly rising housing prices also kept many would-be buyers in rental units, which, in turn, gave landlords greater incentive to raise rents. But the recovery from the pandemic has kicked that dynamic into overdrive. The number of new households jumped dramatically in 2021 as Americans fell back into pre-pandemic patterns, boosting the demand for housing. But the pandemic and subsequent supply chain issues severely limited construction and left renters fighting over a sparse supply of vacant units.

U.S. States Weigh Tax Breaks to Ease Pain at the Gas Pump​​​

A surge in U.S. retail gasoline prices to record highs has prompted governors and lawmakers in several states to consider slashing their fuel taxes and to ramp up pressure on the federal government to do the same, Reuters reported. The push reflects worries in state governments that the rapid spike in fuel costs could hurt motorists and chill local economies, and that federal efforts to keep prices down so far have been insufficient. "Due to a total failure of leadership in Washington, we are actively working with the Georgia House and Senate to quickly move legislation that will temporarily suspend the state’s motor fuel tax,” said Georgia Governor Brian Kemp, a Republican. The state has a 29.1 cents-per-gallon gas tax. Governors and lawmakers in California, Maine, Michigan, New York, Tennessee and elsewhere are considering similar moves. A coalition of six Democratic governors — from Colorado, Michigan, Minnesota, Pennsylvania, New Mexico and Wisconsin — also sent a letter this week to U.S. Congressional leaders, asking them to support a bill to lift the nation’s 18.4 cents-per-gallon federal tax.

U.S. Weekly Unemployment Claims Climb 11,000 to 227,000 After Big Increases in New York and California​​​

New filings for unemployment benefits rose by 11,000 to 227,000 in early March largely because of unusually big increases in New York and California. Yet businesses are trying to avoid layoffs as they confront an extremely tight labor market and fill a record number of open positions, MarketWatch.com reported. Initial jobless claims rose from a revised 216,000 in the prior week, the Labor Department said today. Aside from the big increases in New York and California, new filings were little changed in almost every other state. Jobless claims still appear on track to fall near 200,000 again in the near future. They briefly fell to a 52-year low of 188,000 at the end of last year.

New Monetary Amounts Adjusting Under § 104 of the Bankruptcy Code Effective April 1​​​

Per notice in the Federal Register, Bankruptcy Code § 104 provides the mechanism for an automatic three-year adjustment of dollar amounts in certain sections of titles 11 and 28. The next such adjustment will occur on April 1, 2022, when the dollar amounts in effect under §§ 101(3), 101(18), 101(19A), 101(51D), 109(e), 303(b), 507(a), 522(d), 522(f)(3), 522(f)(4), 522(n), 522(p), 522(q), 523(a)(2)(C), 541(b), 547(c)(9), 707(b), 1322(d), 1325(b) and 1326(b)(3) of title 11, and § 1409(b) of title 28, are set to increase. This adjustment does not apply with respect to cases commenced before April 1, 2022. Click here for the full notice and chart with the adjustments.

ASM Session Spotlight: Subchapter V Landmines: What, Where and How to Deal with Them

A special panel of subchapter V experts at ABI’s Annual Spring Meeting will discuss the multitude of issues that have developed since the enactment of the statute, and how practitioners can best deal with these issues. Register today for this engaging session and many more!

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