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The U.S. Department of Education approved about $6.8 billion in student debt relief for more than 113,000 borrowers through adjustments to its Public Service Loan Forgiveness Program, Bloomberg News reported. The relief -- which the DOE says will average about $60,000 per borrower -- is being given after President Joe Biden made changes to the program in October, under which nonprofit and government employees can have their federal student loan debt forgiven after 10 years, or 120 payments. While the debt forgiveness will come as a relief to those who qualify, the number represents only 0.26% of the 43.4 million Americans burdened by federal student loan debt. Biden has come under pressure in recent weeks to make good on his campaign promise to forgive $10,000 worth of student loans per borrower as the deadline for the student loan payment moratorium approaches at the end of August. The president said he will either extend the moratorium, which has been in place since the start of the Covid-19 pandemic, or do some sort of debt cancellation before then. The White House has been looking into whether Biden has the legal authority to forgive student loan debt through executive action. White House Press Secretary Jen Psaki said Tuesday that the president was considering limiting his student loan forgiveness program to Americans earning less than $125,000 a year. Forgiveness of $10,000 per borrower would clear loans for 15 million borrowers.

President Joe Biden is considering limiting his program to relieve student debt to Americans earning less than $125,000, White House Press Secretary Jen Psaki said yesterday, Bloomberg News reported. Biden said last week he would soon take executive action to forgive some student debt. White House officials have previously said the plan would relieve at least $10,000 of debt per borrower, and that they expected the program would include income restrictions. Psaki offered $125,000 as a possible threshold in a briefing for reporters traveling with the president to a weapons plant in Alabama. The president has been prodded by progressives including Democratic Senator Elizabeth Warren to forgive at least $50,000 per borrower, but Biden has said he won’t relieve that much debt by executive action. He proposed eliminating $10,000 per borrower during his presidential campaign. The Biden administration has repeatedly extended a temporary freeze on student debt payments enacted shortly after the pandemic began in 2020. White House aides have said the president hoped Congress would take legislative action on student debt relief, and that his team has been divided on the merits of broad forgiveness. Read more. 

In related news, Republicans are attacking Democrats and President Biden on the issue of student loan debt cancellation, linking the effort to inflation and calling it a transfer of wealth to elites, The Hill reported. It is an “absurd fiscal policy that will make inflation worse” and that shows Democrats have “prioritized the demands of the liberal elite” over working Americans, in the words of House Minority Leader Kevin McCarthy (R-Calif.). It is a “gross attack on hardworking Americans that did not attend college or saved to pay back their loans,” according to Rep. Jason Smith (R-Mo.), the ranking member on the House Budget Committee. He calls it a “bailout” to the wealthiest 20 percent of households that have “graduate degrees, six-figure incomes, and high lifetime earnings.” The White House, for its part, is hoping that executive action by Biden on federal student debt cancellations will rally its base to the polls at a time when polls show Democrats are deflated with what their leaders have achieved. Biden has come under steady pressure from liberal groups, the NAACP and Senate Majority Leader Charles Schumer (D-N.Y.), among other voices, to take action to forgive student debt. Those voices say it is critical to give relief to people carrying excess debt, particularly minority and working-class Americans. Read more. 

As President Joe Biden moves closer to canceling some student loan debt, the top federal student loan official said any forgiveness by the president would be additive to other reforms taking place, YahooFinance.com reported. "That's a decision that the White House will make," Federal Student Aid (FSA) Chief Operating Officer Richard Cordray said. The Biden-era Education Department (ED) has taken several actions — aside from extending the payment pause multiple times — to refine the unwieldy student loan system and erase debt. These include overhauling the troubled Public Service Loan Forgiveness (PSLF) program for student loan borrowers in public service; erasing debt held by some students who were defrauded by a predatory for-profit college; discharging debt of totally and permanently disabled borrowers; and increasing scrutiny of student loan servicers. One estimate is that 700,000 borrowers have seen more than $17 billion wiped away through various actions. An estimated 37 million borrowers haven't had to make payments on their loans during the payment pause, and no new interest has accrued. The New York Fed recently found the payment pause has led to "an estimated $195 billion worth of waived payments through April 2022."

Consumers spent more in March, showing American households are absorbing high inflation and are positioned to propel the economy heading into the spring and summer, the Wall Street Journal reported. Personal-consumption expenditures increased a seasonally adjusted 1.1% in March from the prior month, the Commerce Department said Friday. Adjusting for inflation, consumer spending rose 0.2% last month, driven by higher services spending. Household spending also rose at a faster rate than inflation from a year earlier. Consumers stepped up spending on services like travel and dining, as well as on goods like gasoline and food. Spending on durable goods declined for the second month in a row, led by lower spending on vehicles. Personal income, a measure that includes wages and government assistance, climbed 0.5% from the prior month. That was a slower rise than overall inflation, which increased 0.9% on the month in March, according to the Commerce Department. Some Americans tapped their savings to offset cost increases. The savings rate fell to 6.2% in March, the lowest in nine years.

President Biden said yesterday that he is considering wiping out some student loan debt and will make a final decision “in the coming weeks,” the New York Times reported. “I am considering dealing with some debt reduction,” Mr. Biden said after a speech in the Roosevelt Room of the White House. The comments were the clearest signal yet from Mr. Biden that he may make good on a promise to cancel at least some debt for student loan borrowers. During the campaign in 2020, he said he would “make sure that everybody in this generation gets $10,000 knocked off of their student debt.” The White House has been under intense pressure to provide the relief through executive action, and Mr. Biden this month extended a pause on loan payments for a fourth time. But the president made clear that his decision would disappoint at least some progressive Democrats and advocates who argue that large-scale cancellation is necessary to address economic and racial disparities and want him to wipe out $50,000 or more per borrower. “I am not considering $50,000 debt reduction,” Mr. Biden said. But he added that he was “taking a hard look” at debt forgiveness. “I’ll have an answer on that in the next couple of weeks,” he said. The timeline comes after Mr. Biden discussed the issue with members of the Congressional Hispanic Caucus this week in a closed-door meeting at the White House. Representative Tony Cárdenas, Democrat of California, said that Mr. Biden signaled he was open to debt forgiveness when asked if he would follow through on his $10,000 promise. In a statement, Mr. Cárdenas said he was glad to see Mr. Biden confirm that position.

A type of consumer loan that fell out of favor in the pandemic’s early months is popular again, the Wall Street Journal reported. Lenders originated $222 billion of personal loans last year, up 31% from a year earlier and 22% from 2019, according to credit-reporting firm Experian PLC. It was the highest level for a full year going back to at least 2011. Lenders cut back sharply on personal loans in early 2020, when it looked like the pandemic was going to devastate Americans’ household finances. People tend to use personal loans to pay for things like home renovations or vacations, or to pay off higher-interest credit-card debt. The loans are often unsecured, meaning lenders can’t seize collateral if the borrower defaults. But stimulus payments kept Americans afloat during Covid lockdowns, and a feared jump in defaults never materialized. The unemployment rate is nearly back to where it was in February 2020. Lending, as a result, has returned in full force, even to borrowers with lower incomes and less-than-pristine credit. (Subscription required.)

The Education Department said Thursday that it will cancel the loans of 28,000 student borrowers who attended a now-defunct for-profit chain of cosmetology schools, the latest move by the Biden administration to address the politically charged issue of student-debt forgiveness, the Wall Street Journal reported. Borrowers who attended the Marinello Schools of Beauty between 2009 and its closure in 2016 are eligible for relief, which amounts to $238 million. The federal government previously determined that Marinello had “engaged in pervasive and widespread misconduct that negatively affected all borrowers” enrolled during that period — among other things, that it had “failed to train students in key elements of a cosmetology program, such as how to cut hair.” Some Marinello loans have already been forgiven, but Thursday’s action is a broad group discharge for anyone who went to the school during that period, even those who haven’t applied for relief. It is the first such group loan forgiveness since the Obama administration.

More New York apartment renters are declining to renew leases as they’re being presented with post-pandemic rate increases, landlord Equity Residential said, Bloomberg News reported. Deal-seekers are “choosing to move out versus paying the higher current price,” Chief Executive Officer Mark Parrell said Wednesday on the real estate investment trust’s first quarter earnings call. “But not a concern since we are easily able to attract new residents at these higher rates.” The current renewal rate at the company’s buildings in the New York area is around 60%, down five percentage points from the beginning of the year, Parrell said. The drop comes as tenants who secured deep discounts during the pandemic leasing lull face the dilemma of paying more to renew or hunting for a cheaper place in a competitive market. Across Manhattan, the first-quarter vacancy rate was below 2%, and rents were up 25% from early 2021, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.