%1

Gov. Brian Kemp on Thursday signed bills to help college nursing instructors and state medical examiners repay their student loans, the Atlanta Journal-Constitution reported. The bills are aimed at recruiting and retaining workers in those hard-to-fill jobs. Senate Bill 246 incentivizes nursing faculty members with at least a master’s degree in nursing to remain in teaching instead of leaving for potentially more lucrative nursing jobs. Officials have said one way to address Georgia’s nursing shortage is to make sure there’s enough teachers to train students who want to enter the profession. Nursing faculty members who are currently employed and have been employed for at least a year in a nursing program within the University System of Georgia or the Technical College System of Georgia can get up to $100,000 in student loan repayments over five years. Kemp approved House Bill 163, which will pay off up to $120,000 in student loans for Georgia Bureau of Investigation medical examiners over five years. Another Kemp-backed bill, to help Georgia police officers repay their student loans, failed to pass the Legislature this session.

Arguing that medical debt “has nothing to do with your ability to pay your bills,” Senate Banking Committee Chair Sherrod Brown (D-Ohio) yesterday urged the CEOs of the nation’s three major credit-reporting agencies to remove that information from consumers credit reports, Cleveland.com reported. “Medical debt does not correlate with credit risk; it correlates with illness,” Brown told the CEOs of Equifax, Experian and TransUnion at a hearing of the Senate Banking, Housing and Urban Affairs Committee, which he chairs. “No one should have their financial future destroyed because of a medical emergency, or a sick family member.” Testifying before the committee in tandem for the first time ever, all three CEOs told Brown’s committee their reports don’t include medical debts below $500. They said they would exclude all medical debts if the Consumer Financial Protection Bureau ordered them to do so but would not commit to doing so without that motivation. TransUnion CEO Chris Cartwright told Brown that credit agencies should continue to analyze the issue to determine what level of medical debts should be included in credit records. “I think we have to acknowledge that at some level, medical debt could become a burden for a consumer to incur even more debt,” Cartwright told him. “I think the best outcome is when all the players in the credit-reporting system, be it the bureaus, the banks, consumers, and certainly this committee, collaborate and analyze the information and let the data lead us to the best outcome.”

The Education Department and consumer advocates warned this week how devastating the House Republican debt ceiling plan would be for student borrowers and those seeking higher education, YahooFinance.com reported. The plan would reverse the president’s student loan forgiveness up to $20,000 even if the Supreme Court rules in favor of its legality in the next months. It would also cancel the creation of a more affordable student loan payment plan. Overall, the Education Department would see a 22% reduction in funding, the department said Tuesday, which would shrink the Pell Grant program that helps lower-income students afford college. The proposal, which House Speaker Kevin McCarthy tweaked Tuesday evening in an effort to wrangle enough votes among the GOP to pass the House, comes as the Treasury continues to move money around to keep the federal government from defaulting on its debt. Those maneuvers could stop working sooner than expected — as early as mid-June — if capital gains revenue continues to come in weaker than expected, Yahoo Finance previously reported. A default could shake the markets and send ripple effects through the economy. President Joe Biden has already promised a veto, with the White House pointing to a recent Moody’s Analytics report that found the bill would cut into near-term economic growth if enacted.

Student loan servicers are in a tough bind, dealing with reduced staff as they prepare for the unprecedented situation of 44 million borrowers returning to payments later this summer, The Hill reported. Student loan payments are expected to restart at the end of August at the latest, including for many borrowers who graduated during the pandemic and have never made such payments before. “I think the real challenge is the resource constraint, right? That’s really on the customer service side,” said Scott Buchanan, executive director for Student Loan Servicing Alliance (SLSA). “Systemically, we can handle this, but that customer service component is going to be constrained, and that’s because the [Education] Department has continued to make cuts to the customer service funding for student loan servicers.” SLSA is a nonprofit trade association that works on student loan servicing issues. It says its members, which include federal student loan servicers Aidvantage and Edfinanical Services, are “responsible for servicing over 95% of all federal student loans and the vast majority of private loans.” The lack of money for customer service in the industry can potentially be traced back to a denial of increased funding for the Federal Student Aid (FSA) office by Congress last year. In preparation for student loan payments turning back on, the Education Department has announced multiple initiatives they say will make the transition easier for borrowers, including reforming the income-driven repayment (IDR) system so that some borrowers wind up owing as low as $0 a month. The department is still hoping the Supreme Court won’t kill President Biden’s student debt forgiveness program, though that will require it and the student loan servicers to take on the Herculean task of sweeping debt relief and loan repayment resumption at the same time.

The U.S. Supreme Court on Thursday refused to halt a legal settlement that would erase more than $6 billion in debt owed by former students of colleges — many of them for-profit institutions — who have said they were misled by schools about academics and job prospects, Reuters reported. The justices turned away a request from three colleges that are challenging a settlement between the U.S. Education Department and borrowers that linked the colleges to claims of "substantial misconduct," an allegation they dispute. Three of the schools identified in the settlement — for-profit Lincoln Educational Services Corp and American National University Inc. as well as nonprofit Everglades College Inc. — challenged the agreement after it was approved by a federal judge in California last November. Around 3,500 borrowers entitled to automatic loan discharge under the settlement attended one of the three schools. The decision was separate from a case pending before the high court over the legality of President Joe Biden's plan to cancel $430 billion in student debt for about 40 million borrowers. A ruling in that case is expected by the end of June.

After high-profile bank collapses sent shockwaves through the banking system last month, regulators also hold some concerns about digital wallets and money transfer apps that consumers often use as bank accounts, The Hill reported. “I’m very worried,” said Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB). “A lot of people are storing money in peer-to-peer apps and online payment systems,” he continued. “Apps like CashApp, Venmo, Paypal have become part of the digital wallets of so many Americans, but many may not know whether those funds are insured or not.” Many of these apps are regulated as money transmitters — commonly used for international remittance payments — instead of banks, Chopra said. Banks are subject to stricter federal regulation and oversight. Banks overseen by the Federal Deposit Insurance Commission (FDIC) are also backed up by up to $250,000 in deposit insurance per account. “Many people think of this as like a bank account, as a place I can store funds, but the reality is it’s not like a bank account and there are certain circumstances where those balances may not be fully insured,” he said.

President Joe Biden’s student loan forgiveness program faces a new threat from Senate Republicans even before the U.S. Supreme Court rules on whether it can be implemented, CNN.com reported. Republican Sens. Bill Cassidy of Louisiana, Joni Ernst of Iowa and John Cornyn of Texas, along with 36 other GOP senators, introduced a resolution on Monday to overturn Biden’s debt relief program, which promises up to $20,000 of debt relief for eligible borrowers. The measure would also end the pandemic-related pause on federal student loan payments, which has been in place since March 2020 and is set to expire this summer. Biden would very likely veto the resolution if it succeeds in both the Senate and House. But votes would force members of his own party, who have not all been in support of the student loan forgiveness program, to take a public stance. The program is currently blocked. The Supreme Court is expected to issue its ruling in late June or early July.