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Why is student loan forgiveness a perennial American concern?

Cardona, himself a former fourth-grade teacher, calls an audible as we begin our interview in the library of the Glendora (New Jersey) Elementary School, sat in plush, huge, hand-shaped child seats. “Wait,” he replies. “Let’s terminate this interview and replace these seats.”

That makes perfect sense, Mr. Secretary. The chairs did not function. In light of his current circumstances, the man needs all the solace he can get.

I’m referring to Cardona’s role as the point person for the Biden administration’s contentious student debt relief scheme, which is expected to launch this month with real-time updates.

President Biden issued an executive order in late August that will cancel up to $10,000 in school debt for individuals earning less than $125,000 annually. Those receiving federal Pell grants, which are awarded to students with extraordinary financial need, will earn up to $20,000 in loan forgiveness if their annual income is less than $125,000.

The idea has become a political hot potato, receiving criticism mostly from the political right, as well as from certain constitutional academics and education and personal financial specialists who view it as problematic, insufficient, or both. On the other hand, the roughly 40 million Americans whose student loan debt would be lowered or perhaps eliminated — more than 15% of the U.S. adult population — may be pleased with the president’s resolve to continue through with the proposal despite its opponents.

I asked Cardona why the plan has become a lightning rod.

“If we’re serious about America being the best and leading the world and producing the best thinkers, then we need to invest in education,” he said. “It’s almost hypocritical for folks to be complaining about this yet applauding what we did to keep businesses open during a pandemic, through our PPP [Paycheck Protection Program].”

Biden’s proposal appears to have the backing of the Democratic Party’s far-left wing, some members of which, such as Bernie Sanders, have campaigned for the cancellation of all student debt. New York Representative Alexandria Ocasio-Cortez applauded the proposal but asked her supporters to advocate for even more forgiveness.

“President Biden was responsive to the stories that we amplified, and his action is one that is historic and will change lives for the better,” fellow Squad member Massachusetts Rep. Ayanna Pressley told us. “There were those who considered this issue to be fringe and marginal. We worked with a coalition for two years to prove that it was not, and that canceling student debt would be transformative.”

Pressley stressed that the Biden administration should continue supporting historically black colleges and universities; pushing for tuition-free college; and investing in Pell Grants. “But this is a bold, strong, necessary step in the right direction. It is a victory for everyone,” she said.

‘Illegal and inflationary’

Now for the opposition: Opponents argue that the Biden administration lacks the Constitutional right to erase that much debt, therefore contributing to inflation. Some opponents argue that this is unfair to those who have never incurred student loan debt and that Biden went too far when he offered up to $20,000 in loan forgiveness for Pell Grant winners.

“Student debt is crippling,” Texas Rep. Kevin Brady acknowledged to Yahoo Finance. “And when too much is taken on it can change your life. But this proposal by the president is illegal and inflationary. It is financially irresponsible. But most of all, it’s just unfair. It’s a kick in the teeth to all the blue collar workers and all the Americans who don’t have student loans.”

Brady mentioned a proposed bipartisan bill dubbed SECURE 2.0 as an alternative to the forgiveness scheme, stating that it would allow employers to contribute to the retirement accounts of employees who make student loan payments. For instance, if you contribute $100 to your student loan, your employer may contribute up to $100 to your 401(k) or other retirement plan (k).

“So in effect while that worker is paying off their student debt, they will no longer miss out on putting matching funds into their retirement,” Brady said. “It brings a private sector approach to helping students with their debt while helping them save for the future and for their retirement.”

Additionally, the president’s plan confronts a variety of legal obstacles. Six states, including Iowa, Missouri, Nebraska, Arkansas, Kansas, and South Carolina, have filed a lawsuit against the Biden administration, claiming the plan will harm state education programs and reduce tax revenues.

Sheila Bair, former chair of the FDIC and former president of Washington College, recently wrote for Yahoo Finance that while she favors certain student debt forgiveness, the proposal does not address issues in the student loan ecosystem as a whole. These include intricacy, opaqueness, expensive tuition, and poor results.

She said of Biden’s idea, “It’s too generous. Bair stated, “$10,000 in Pell-eligible student aid would have been far more justifiable.” “If we enter a recession, I believe federal spending should prioritize individuals who have lost their jobs above those with school debt,” This may be a wonderful political issue for Democrats in November, but it will prolong borrowers’ uncertainty and pain.”

With the midterm elections less than a month away, Biden and the Democrats seek to sell student loan relief as a victory to voters.

That is certainly not a guarantee. In the absence of legal obstacles, the government is attempting to thread a needle in order to recalculate millions of dollars in loan payments in January. In the same month, the suspension of student loan payments due to the epidemic would cease.

Should these kids be held accountable for this debt? The argument between those who advocate for a free market and those who advocate for government intervention illustrates an enduring American concern.

The proponents of a free market claim that these young individuals choose to incur debt, thus this is their problem. Insofar as this is an ugly contract, free marketers would argue that the “invisible hand” of the market will render the business of student loans unsustainable, as borrowers shun unattractive loans.

The issue with this perspective is that millions of people are harmed along the way, which is an unacceptable way to operate a society. We cannot allow folks to sell Halloween sweets with ground glass and wait for the market to remedy the situation. People must be protected by the government, and in some cases, made whole if they have been hurt.

The argument is whether the government is required to assist individuals who have already incurred excessive debt. This argument is likely to keep Secretary Cardona in the spotlight.

The NIL pay of a college quarterback approaches $4 million due to a new NFT collaboration

Yahoo Finance has heard that Texas quarterback Quinn Ewers has begun an NFT campaign with Metabillia that will pay him a total of $1 million.

Consequently, the 19-year-total old’s remuneration from name, image, and likeness (NIL) arrangements is rapidly nearing $4 million.

According to Opendorse, the typical NIL quarterback sponsorship earns the player $2,466 per agreement. The $1 million sponsorship of Ewers is divided into 12 payments of varying amounts well above the average, in addition to a 50% revenue share.

“Our focus is to partner with young and upcoming athletes,” Metabilia CEO Joe De Perio told Yahoo Finance. “It’s well-documented Quinn is, if not number one in his [NFL] draft class, but pretty up there. I think his game is made for Sunday as well.”

On June 30, 2021, college players were granted permission to benefit from their NIL when the NCAA approved an interim regulation allowing all student-athletes to profit from their NIL. Players can receive monetary compensation for sponsoring appearances, social media postings, signatures, and even non-fungible tokens (NFTs).

Currently, 29 states have enacted their own NIL laws outside of the NCAA. According to Opendorse, the sector generated an estimated $917 million in its first year of operation and is predicted to surpass the $1 billion mark in 2022.

Since he left high school a year early to join Ohio State, Ewers has been a prominent figure in the space. On Saturday, he is scheduled to return from an injury against rival Oklahoma.

Ewers played his debut season in Ohio, where NIL regulations were less restrictive, and signed a $1.4 million contract with GT Sports Marketing. In addition to other agreements, Ewers has negotiated a six-figure deal to market Wrangler jeans (KTB) after relocating to Texas.

The debut of Ewers’s NFT focuses on exclusivity. Supporters pay an initial membership fee ranging from $30 to $500 to have access to future special NFT drops and autographed items.

NFTs have gained popularity in space. Multiple industry analysts told Yahoo Finance that NFTs might play an important role in supporting the NIL sector.

As with any other potentially expensive collector’s item, there is no defined price for NFTs. Fans of the University of Texas may continue to invest millions of dollars in Ewers’ NFT with the knowledge that half of the earnings will be returned to the team’s star quarterback, despite the fact that the NFT market as a whole has declined this year in tandem with the drop of crypto. Ewers will also earn 50% of any secondary market revenue generated by the firm.

“It’s a way for fans to connect with the athlete,” De Perio said, “and for boosters to purchase NFTs on athletes they support.”

And because there is no predetermined price for the service and the NIL space as a whole lacks governmental control, there is no cap on how much Ewers or any other athlete may earn from a project like this.

Through NFTs, boosters may assist athletes at their discretion. According to a press release from Metabilia, Ewers has already secured a “six-figure plus” commitment to fund the project from a renowned donor organization.

“I think it’s awesome,” Ewers told KXAN-TV in Austin last month. “I think it’s a great deal that players are finally getting paid. You know all this hard work that we do with summer workouts, all this fall camp and film studies — I think it’s a great deal that we can finally get paid.”

Wall Street Bankers Are Told They Can Set Their Own CO2 Terms Following Dispute

As it works to straighten things up in advance of next month’s COP27 climate meeting, the world’s largest climate-finance coalition has moved to deny allegations that a number of Wall Street banks are threatening to quit.

The Glasgow Financial Alliance for Net Zero stated it has “had no indication from any of our members that they intend to depart” in a statement to Bloomberg News on Saturday.

According to those familiar with the situation, GFANZ, which unites more than 500 financial institutions managing more than $135 trillion in assets, has been threatened by potential defections from companies like JPMorgan Chase & Co., Morgan Stanley, and Bank of America Corp. According to the sources, the strong hitters were not pleased with the idea of adding enforceable limitations to fossil financing.

Tensions increased after Race to Zero, a United Nations-backed organization, suggested such conditions as a need for net-zero claims to be credible early this year. Following a softening of that phrasing, GFANZ said in a statement on Saturday that each sub-alliance of the organization is “subject exclusively to their own governance systems,” thus allowing them the right to disregard such suggestions.

Race to Zero has already been publicly criticized by Mark Carney, co-chair of GFANZ, for going “too far.” A GFANZ advisory board member, Jakob Thomae, predicts that ultimately, some of GFANZ may cut relations with Race to Zero and look for a more specialized decarbonization approach to please members.

However, there are already some voices of fear that the seeming marginalization of science is a disturbing tendency. Al Gore, a former US vice president who is now a climate campaigner, issued a warning last month that investors are getting frustrated with evidence of possible “greenwashing” and hints that certain members of the financial industry’s net-zero promises aren’t legitimate.

While the alliance and its subgroups are associated with the Race to Zero, the seven sub-alliances, which span everything from insurance to banking and asset management, are autonomous businesses with their own governance frameworks, according to the GFANZ spokeswoman. As a result, these sub-groups “reside with the alliances for any modifications to the nature of their commitments” and “are accountable for maintaining responsibility of their members.”

The GFANZ stated that Saturday’s statement just reflected the previous governance structure and added that several of its sub-alliances are UN-convened. However, building tensions have undermined the need to convince members of their independence in recent weeks, with banks reportedly demanding urgent explanation behind the scenes.

According to climate nonprofits, it is risky to let the sub-alliances, whose boards are largely comprised of members of the banking industry.

According to a banker with direct knowledge of the issue, making such a statement should be seen as an essential concession to Wall Street in order to keep the banks on board.

The net-zero alliance might be “killed,” according to Lucie Pinson, executive director of the Paris-based environmental NGO Reclaim Finance, if efforts are made to relax the requirements for GFANZ membership.

“Even before the revelations that some banks may leave GFANZ in opposition to real climate action, there were plenty of doubts that the alliance could really deliver on net zero,” she said before Saturday’s statement was released. “The outcome of this issue will tell us decisively whether we should expect banks to lead the climate fight or act simply as agents of greenwashing.”

The problem is too crucial to allow non-sector experts define the guidelines, according to Thomae, who is also managing director of the 2 Degrees Investing Initiative in Germany, for GFANZ to continue its affiliation with Race to Zero. However, he said, abandoning a UN-backed climate program will undoubtedly look bad politically regardless of the rationale, and its successor might have a lower level of scientific legitimacy.

Finance sector professionals have cautioned that unless the governments of the nations in which they are situated offer suitable frameworks that eventually inspire their clients to step up, they won’t be able to reach their net-zero targets.

“The net-zero journey for banks is very challenging,” said Antoni Ballabriga, global head of responsible business sustainability at Spanish bank BBVA. “We will only succeed in achieving this objective if our clients and other stakeholders also play their part.”

Leaders from all around the globe are getting ready to gather in Egypt for the COP27 climate meeting, and the tensions surrounding GFANZ are expected to set the tone for finance-industry discussions there next month. The representative for GFANZ stated that the organization is “committed on presenting a thorough practitioner-led work plan on transition finance at COP27.”

The conflict in Ukraine and a worldwide energy crisis, which has hampered attempts to replace fossil fuels, are in the background of the Sharm El Sheikh meeting. Scientists believe that the Earth may already be on a warming trajectory that is double the crucial limit of 1.5C because of the ongoing increase in emissions.

The former governor of the Bank of England, Carney, cautioned against being overly critical of the financial sector in an interview earlier this year. He stated that getting commitments was the first stage. He described the following stage as “plumbing work,” with the objective of “operationalizing those pledges into net-zero plans and transition plans.”

Some for-profit colleges see students as “prey,” according to the education secretary.

One of the largest for-profit institutions in New York City, ASA College, agreed this week to pay $112,500 in civil fines to resolve claims that its advertisements targeted immigrants and students in need of financial aid and deceived customers.

U.S. Education Secretary Miguel Cardona made a statement about the propensity of for-profit institutions to prey on more helpless Americans on a recent edition of “Influencers with Andy Serwer.”

“The majority of the cases that we had to intervene are for-profit institutions that are really looking at our students, not as future students, but as prey where they can take advantage of them and sell them a dream and put them in debt and then not deliver,” Cardona told Yahoo Finance’s editor-in-chief.

Loan amounts taken out by students attending for-profit colleges are frequently far higher than those at nonprofit colleges. According to data from the National Center for Education, students at these institutions borrowed around $8,000 in loans for the 2019–2020 academic year. As opposed to $4,700 for two-year community institutions and $7,000 for four-year public colleges, respectively.

Four-year for-profit college students are also more likely to fall behind on their payments. In a research published in April, the Journal of Financial Economics discovered that four years of attendance at for-profit colleges more than doubles the probability of defaulting on student loans, from 6.95% to 11.0%.

A 2020 study of 453 schools by the Washington, DC-based think group Third Way found little evidence that such schools typically provide higher results. Within ten years of enrolling, low-income graduates at more than 60% of those institutions earned less than the typical high school graduate.

According to Cardona, “a lot of the work we’ve done is basically regulation to make sure that for-profit schools are not profiting off first generation college students who are being misled or are being lied to.” I don’t want to generalize, but I will say that a lot of the work we’re doing is pursuing some of those for-profit schools who are seriously exploiting our kids.

The American government has scrutinized for-profit colleges to varied degrees during the last ten years. The Obama administration stopped supporting for-profit college programs in 2010, which were known for leaving graduates with significant debt. In order to promote openness and make student data from higher education institutions more widely known, he also developed the College Scorecard.

Many of the Obama-era attempts to hold for-profits responsible were pushed back when the Trump administration took office. For example, it did away with the “Gainful Employment” requirement that for-profit institutions prove its graduates have the skills necessary to pay back their student loans.

Cardona claims that the Biden administration is once more pushing stricter laws on for-profit universities. For instance, it recently put out a proposal to limit the amount of money that such colleges may earn from enrolling veterans. Additionally, it revoked the federal recognition that ACICS (the Accrediting Council for Independent Colleges and Schools) had granted to Corinthian Colleges and ITT Technical Institute, two for-profit institutions that have been accused of scamming students.

“It’s our job to make college affordable and accessible — and that means getting rid of the bad actors that are taking advantage of our students,” Cardona said.

Cardona was the commissioner of the Connecticut State Department of Education from 2019 to 2021, when he was appointed Education Secretary in March 2021. The University of Connecticut awarded him a degree in education, and he began his career as a fourth-grade teacher.

Bluerock Homes Trust Stock Gain 19% Upon Initiation of Trading

Following its debut on the New York Stock Exchange American, shares of Bluerock Homes Trust Inc. soared 19% to $23.76 on Thursday.

Bluerock Homes Trust was established on Thursday as an externally-managed REIT specializing on the single-family rental market. The IPO comes after Bluerock Homes Trust was spun off from Bluerock Residential Growth REIT Inc.

The original portfolio of the firm consists of interests in about 4,000 homes, including 2,300 operational homes and 1,600 properties owned through preferred equity and mezzanine loan investments.

BHM common shares began trading under the symbol BHM on Thursday.

To recover NYSE compliance, Berkshire Hathaway will name an independent director.

To recover conformity with the New York Stock Exchange, Berkshire Hathaway Inc. BRK.A, -2.47% BRK.B, -2.63% stated that its board will select a new independent director as soon as possible.

The Omaha, Nebraska-based corporation, which holds businesses such as insurer Geico, railroad BNSF Railway, and sportswear manufacturer Brooks Running, stated on Monday that the exchange alerted Berkshire of the violation. This is due to the death of director David Gottesman last month.

Prior to Gottesman’s death, Berkshire’s board consisted of eight independent directors and seven non-independent directors; however, with Gottesman’s demise, the business no longer had the majority of independent directors needed by the NYSE.

The business stated in a regulatory filing, “The Berkshire Hathaway Board of Directors intends to select a new independent director as soon as possible.”

Carnival’s stock rises to rebound from a 30-year low, but underperforms because problems seem to be “industry peculiar.”

After Stifel Nicolaus analyst Steven Wieczynski said Carnival’s problems are “company specific,” shares of Carnival Corp. CCL, -3.15% rose 1.1% in morning trading on Monday, reversing a loss of as much as 6.4%. However, they underperformed shares of rival cruise operators and the overall stock market. The stock was the most actively traded on the New York Stock Exchange with 43.1 million shares moved (NYSE). After announcing a considerably larger-than-expected quarterly loss, the stock fell 23.3% on volume of 237.7 million shares on Friday to settle at its lowest price since Oct. 15, 1992. Analyst at Stifel Nicolaus While shares of Royal Caribbean Group rose 2.9% and those of Norwegian Cruise Line Holdings Ltd. increased 3.7%, the S&P 500 SPX, -2.80% increased by 2.0%, while Carnival’s stock dipped. Not all cruise operators are created equally, according to Stifel Nicolaus analyst Steven Wieczynski, who believes that Carnival’s pricing problems are “company specific” and related to the company’s “overexposure” to Europe, where currency fluctuations, COVID, and a weaker economy than the U.S. are hurting close-in bookings.