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As young adults wrestle with student debt in the United States, where it has reached $1.5 trillion, many recent graduates in some countries are debt free, the New York Times reported. Denmark is among the countries in the Organization for Economic Cooperation and Development that spend the most on postsecondary education, at 1.6 percent of its gross domestic product. (The United States allocates 0.9 percent of its G.D.P.) An increased emphasis on higher education attainment has led to 45 percent of Taiwan’s population aged 15 and older earning a technical college or university degree, a 10 percent increase over the last decade, according to the Taiwanese government. Government grants help undergraduate students pay for living costs and education fees in Ireland. Some students have protested the contribution fees of 3,000 euros ($3,360) a year, calling for a publicly funded education system like those elsewhere in Europe. The Labour Party in New Zealand, led by Prime Minister Jacinda Ardern, initiated a policy in 2018 that eliminates fees for postsecondary students’ first year. The policy is scheduled to extend to three years by 2024. Read more. 

The issue of student loan debt and bankruptcy is the first problem addressed in the Final Report of the ABI Commission on Consumer Bankruptcy. Click here to download your copy. 

Since the Federal Reserve’s annual report on household well-being began in 2013, the survey (most recently of more than 11,000 Americans) has become a key measure of whether the benefits of the recovery have reached beyond the upper end of the socioeconomic spectrum. Although this year’s report painted a positive picture overall, it identified underlying fragility and exposed pockets of distress, the Washington Post reported. Almost four in 10 people (39 percent) said that they wouldn’t be able to scrape together the cash to meet a $400 emergency expense. Even without any sudden expense, about 17 percent of adults said they would miss a payment on at least one bill during the month surveyed. More than 6 in 10 said losing their job would mean they couldn’t cover three months of expenses, even if they took out loans, sold assets or borrowed from friends and relatives. Only 36 percent said their retirement savings are on track. Almost a quarter of Americans skipped some form of medical care in the past year because they couldn’t afford it. Separately, 1 in 5 faced major, unexpected medical bills. About 4 in 10 of those folks were still carrying debt related to those bills.

The Department of Education yesterday released a trove of information that shows the average amount of debt incurred by graduates of different academic programs at each college and university in America, the New York Times reported. Different majors have different economic payoffs, but federal laws that regulate college success don’t account for that. Instead, they average results across the university. People don’t have a good way of seeing how big those differences are within a particular university, let alone comparing programs across universities. The new, more detailed debt information was created in response to an executive order issued in March by President Trump. Currently the federal government measures the percentage of borrowers at a given college who pay their loans back. If too many students fail to repay, colleges are barred from receiving federal funds. In addition, a bipartisan congressional coalition that includes Senators Joni Ernst and Elizabeth Warren has sponsored the College Transparency Act, which would create more comprehensive program-level data. The debt information released by the Department of Education is still preliminary, so students should be cautious when using it to choose programs and colleges. But there are other examples of how program-level data could change how we look at higher education. Read more. 

The issue of student loan debt and bankruptcy is the first problem addressed in the Final Report of the ABI Commission on Consumer Bankruptcy. Click here to download your copy. 

Over the past year, a spate of suicides by taxi drivers in New York City has highlighted in brutal terms the overwhelming debt and financial plight of medallion owners. All along, officials have blamed the crisis on competition from ride-hailing companies such as Uber and Lyft. But a New York Times investigation found much of the devastation can be traced to a handful of powerful industry leaders who steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst. Over more than a decade, they channeled thousands of drivers into reckless loans and extracted hundreds of millions of dollars before the market collapsed. These business practices generated huge profits for bankers, brokers, lawyers, investors, fleet owners and debt collectors. The leaders of nonprofit credit unions became multimillionaires. Medallion brokers grew rich enough to buy yachts and waterfront properties. One of the most successful bankers hired the rap star Nicki Minaj to perform at a family party. But the methods stripped immigrant families of their life savings, crushed drivers under debt they could not repay and engulfed an industry that has long defined New York. More than 950 medallion owners have filed for bankruptcy, according to a Times analysis of court records. The practices were strikingly similar to those behind the housing market crash that led to the 2008 global economic meltdown: Banks and loosely regulated private lenders wrote risky loans and encouraged frequent refinancing; drivers took on debt they could not afford, under terms they often did not understand.

The director of the Consumer Financial Protection Bureau says that the Trump administration's Education Department is getting in the way of efforts to police the student loan industry, NPR.org reported. The revelation comes at the same time that lawsuits are alleging that widespread wrongdoing by student loan companies is costing some borrowers thousands of dollars. CFPB Director Kathy Kraninger explained the problem in an April letter responding to questions from Sen. Elizabeth Warren (D-Mass.) and other lawmakers about whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans. A central issue is that companies that manage student loans, known as student loan servicers, are refusing to share information that the CFPB says it needs to perform proper oversight. "Since December 2017," Kraninger wrote in the letter, "student loan servicers have declined to produce information requested by the Bureau for supervisory examinations" related to federal student loans. She said that servicers are not sharing the information because the Department of Education has issued guidance telling them not to do so, citing "privacy" concerns. Kraninger also said that information from student loan servicers is "necessary for supervisory examinations." Read more. 

The issue of student loan debt and bankruptcy is the first problem addressed in the Final Report of the ABI Commission on Consumer Bankruptcy. Click here to download your copy.