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Unaffordable rents are changing low-income life, blighting the prospects of not only the poor but also growing shares of the lower middle class after decades in which rent increases have outpaced income growth, the New York Times reported. Nearly two-thirds of households in the bottom 20 percent of incomes face “severe cost burdens,” meaning they pay more than half of their income for rent and utilities, according to the Harvard Joint Center for Housing Studies. Among working-class renters — the 20 percent of people in the next level up the income scale — the share with severe burdens has nearly tripled in two decades to 17 percent. For both groups, the proportion with severe cost burdens has reached record highs. The federal government deems shelter affordable if it takes 30 percent or less of household income, a goal that only about half of the nation’s 44 million renter households meet.

A Bloomberg report draws attention to the financial distress faced by suburban moms who invested in boutique fitness franchises such as CycleBar, Pure Barre, Club Pilates, Stride, and Row House, among others. These franchises, offering specialized workouts to cater to individual preferences, have reportedly led many franchisees, particularly suburban moms, towards financial ruin. Franchisees are attracted to brands like CycleBar, a fitness chain akin to SoulCycle, but minus the high-profile amenities and atmosphere. Targeting a demographic of thirty- and fortysomething women, CycleBar offers upscale, technology-infused spinning classes. Other specialized fitness franchises cater to niche workout preferences, such as barre workouts at Pure Barre, Pilates at Club Pilates, treadmill-based interval training at Stride, and rowing at Row House. Additional fitness experiences include AKT for dance workouts, Rumble Boxing for a nightclub-style boxing gym, Body Fit Training for traditional workouts, YogaSix for yoga, and StretchLab for muscle stretching services. Despite the allure of owning a fitness franchise, many suburban moms who invested in these brands are now facing financial devastation. The report highlights the possible pitfalls of franchising in an industry marked by its competitiveness and volatility. The situation is exacerbated by rising costs, labor shortages, and economic instability, leading to significant losses for companies involved in physical operations.

The Biden administration discharged another $4.8 billion in student loan debt for more than 80,000 borrowers, the Education Department announced yesterday, YahooFinance.com reported. That brings the total amount discharged since President Joe Biden took office to $132 billion for more than 3.6 million borrowers. The latest discharges include $2.6 billion for 34,400 borrowers using the public service loan forgiveness (PSLF) program and waiver and $2.2 billion for 46,000 borrowers under the one-time payment adjustment for income-driven repayment plans. Around 750,000 borrowers have received $53.5 billion in relief from the PSLF program, which includes the limited PSLF waiver that ended last October. Only about 7,000 borrowers had received forgiveness through these programs when the president took office. Teachers, nurses, doctors, lawyers, and other professionals who work in public service jobs with federal, state, local, or certain non-profit organizations are eligible to have their remaining loan balances discharged after 10 years of payments through the PSLF program. PSLF is also available for military service members who don’t qualify for other military loan forgiveness programs. The number of PSLF borrowers who got a discharge increased because of settlement of a lawsuit brought by the American Federation of Teachers (AFT) that offered a PSLF waiver allowing those denied loan forgiveness to reapply by last October.

A flurry of states now require financial literacy classes for high school students, covering topics like budgeting, saving and managing debt, the New York Times reported. Just seven states — Alabama, Iowa, Mississippi, Missouri, Tennessee, Utah and Virginia — earned an A grade, meaning they require students to take a semester-long personal finance course, or its equivalent, on a “report card” from the Center for Financial Literacy at Champlain College in Vermont. Five states got an F, meaning they have “virtually no requirements” for personal finance education in high school. But, the report said, 23 states are projected to receive an A grade in 2028, when additional programs recently approved by state legislatures are in place. The surge in offerings is partly a response to the pandemic, which focused attention on precarious household finances and glaring income inequality. “Things got turbocharged after the pandemic,” said John Pelletier, the center’s director. Higher inflation has also strained consumers’ budgets and the resumption of student loan payments has renewed worries about student debt. Concern is also growing about financial disparities among racial and ethnic groups. While about a third of American adults reported having “too much” debt, the percentage is higher — 39 percent — for Black adults, according to a large survey conducted in 2021 by the FINRA Investor Education Foundation. (The foundation — which is an arm of the Financial Industry Regulatory Authority, a nongovernment regulator that oversees brokerage firms — conducts the survey every three years.)

The private insurance market has proved increasingly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living or other types of assistance with daily living, the New York Times reported. For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live and how much their care would cost. Only 3 to 4 percent of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70 percent of people 65 and older will need critical services before they die. Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits or drop coverage altogether.

The Consumer Financial Protection Bureau (CFPB) and 11 states announced today that Prehired will provide more than $30 million in relief to student borrowers for making false promises of job placement, trapping students with “income share” loans that violated the law, and resorting to abusive debt collection practices when borrowers could not pay, according to a CFPB press release. The CFPB partnered with Washington, Delaware, California, Oregon, Minnesota, Illinois, South Carolina, North Carolina, Massachusetts, Virginia, and Wisconsin to bring the enforcement action against Prehired and two affiliated companies. The order approved by a federal court requires Prehired to cease all operations, pay $4.2 million in redress to consumers that were affected by its illegal practices, and voids all of its outstanding income share loans, valued by Prehired at nearly $27 million.

The lending arm of Toyota Motor Corp. will pay $60 million to settle allegations by a U.S. regulator that it misled customers into buying extra products that boosted their payments and then gave them a runaround when they tried to cancel, Bloomberg News reported. Toyota Motor Credit Corp. allegedly lied about whether the extras were mandatory or rushed through paperwork to hide them, according to a Monday statement by the Consumer Financial Protection Bureau. Toyota unreasonably hindered customers who tried to cancel, and if they succeeded, it withheld refunds by applying the sum to the loan’s principal, the CFPB said. The lender sometimes also falsely reported payment information to credit agencies, the agency said. The unit will pay $48 million to consumers and $12 million to a victims’ relief fund.