March 2021

If misery loves company, the more than one million New Yorkers collectively carrying $35 billion in student debt can rest assured they are not alone.

The New York City Department of Consumer and Worker Protection (DCWP) says about 14% of city residents with student debt are 90 days or more behind on loan payments, according to its commissioner, Lorelei. Salas.

“I care about that a lot,” Salas said. “I graduated from law school with $150,000 in student debt. So I know what it does to people’s finances and to their stress levels.

“It’s a long process,” added Salas, who still has nearly $50,000 in student debt. “There were times when I thought, ‘I’ll never stop paying until I die.'”

Borrowers have taken to social media and advocacy organizations like the non-profit Student Debt Crisis to share their stories of woe (and also their accomplishments if they managed to repay or repay their debts ).

“For the past three years I’ve had a pretty solid job at a top university,” one New Yorker wrote on studentdebtcrisis.org.

“I make a pretty decent salary and get a free MBA. I have a 401(k) and a Roth IRA and I put 25% of my salary in my savings account every month. I have about $45,000 student debt — $15,000 private loan and $30,000 federal loans I’m trying to contribute $600 a month to these loans.

“Last year I contributed $1,762.12 to a large chunk of federal loans totaling $25,000. Over the past year, that total debt has gone down by $415. I invested $300 there I’m seven days old and I already owe $20. I burst into tears when I realized this. For years, my student loan debt has been this shadow hanging over me.

Indeed, a Moody’s report released in January found that slow repayments have become a key driver of what has been the fastest growing type of household debt over the past decade.

Student loan debt soared to $1.6 trillion in the fourth quarter of 2019, according to the Federal Reserve. One in five adults – 45 million Americans – contributes to the total.

Over the past decade, the overall annual net repayment rate (or the amount of existing balances eliminated each year) for U.S. student loans has averaged just 3%,” and many recent graduates have not repaid their balance at all,” Moody’s said.

Meanwhile, the student debt clock on FinAid.org has topped $1.7 trillion, and the issue looms large as the presidential election approaches.

The student loan woes put education concerns ahead of job loss and market downturn fears to become the No. 1 financial disruptor in a recent Harris poll on behalf of TD Ameritrade.

The results came in a time of low inflation, record employment, a rising market (pre-coronavirus), noted Tom Butch, general manager of retail distribution at TD Ameritrade.

In five years, education concerns have risen slightly, with student debt jumping more than 25% in that time, he said, especially for millennials.

The NYC DCWP, formerly the Department of Consumer Affairs, released three reports on student debt, including one in 2017 with the Federal Reserve Bank of New York looking at student loan default and delinquency rates in different neighborhoods, a study that has been replicated in other cities.

The DCWP held debt clinics in targeted areas in 2018 based on the findings of the Fed’s joint report – delinquency and default rates are higher in lower median income neighborhoods.

He offers counseling for student borrowers at nyc.gov/studentloans and provides free counseling at Financial Empowerment Centers in all boroughs.

There are many resources available across the country, but borrowers should be sure to find one that offers student loan expertise, whether it’s a financial advisor, CPA, or attorney, said Bruce McClary, vice president of communications at the National Foundation for Credit Counseling, which runs studentloanhelp.org.

Try to avoid for-profit debt relief companies, he warned.

“Clients pay a lot of money up front and in many cases end up worse off than when they started,” he said.

LONDON, May 14 (Reuters) – The world’s major development banks will not see their coveted credit ratings penalized for providing temporary debt relief to the world’s poorest countries during the coronavirus crisis, it said on Thursday. rating agency Moody’s.

Plans by the G20 group of major economies to allow around 76 countries in Africa and other parts of the world to suspend debt payments for the rest of the year have raised potential rating issues for all parties. concerned.

The worry is that it could put countries themselves in default, shutting them out of borrowing markets.

It was feared that this would undermine the “preferred creditor” status enjoyed by multilateral development banks (MDBs) such as the World Bank, African Development Bank or European Investment Bank, which also lend to Africa.

This status – where they are paid off before a country or company’s commercial lenders – helps underpin what are in many cases highly prized triple A ratings. These higher ratings enable the MDBs to obtain the best rates for borrowing money from the international credit markets, which is then lent to countries in need.

“The way we see this is not really debt relief, but debt deferral for a relatively short period of time,” Moody’s Senior Vice President Kathrin Muehlbronner said.

The banks themselves have yet to declare whether they will provide the debt relief advocated by the G20.

“We would not consider an extended debt suspension offer at the discretion of an MDB affecting our view of preferred creditor status.”

Moody’s estimates that around a quarter of the 40 MDBs it tracks have preferred creditor status in their ratings.

A broader look at the potential impact of coronavirus on development bank ratings showed that the big ones were likely to be protected by strong financial buffers while smaller ones that focus on Africa could be downgraded. .

However, performance and asset quality will deteriorate for all, with private and public borrowers finding it harder to meet their financial obligations and non-performing loans likely to rise from generally very low levels.

Development bank debt ratios are also expected to rise as they expand their balance sheets in response to the pandemic.

The largest response in nominal terms is expected to come from member institutions of the World Bank Group (WBG), totaling up to $160 billion over the next 15 months.

The European Investment Bank is creating a new €25 billion ($26.95 billion) COVID-19 guarantee fund, which aims to mobilize up to €200 billion.

Others are also primarily redeploying their planned lending programs. For example, the European Bank for Reconstruction and Development said that all of its planned loans for the two-year period 2020 and 2021 – a total of 21 billion euros – will be spent to counter the economic shock.

The Inter-American Development Bank (IDB) Group will reallocate resources of $18.35 billion this year and the African Development Bank Group’s Covid-19 Rapid Response Mechanism – which totals $10 billion – will mainly accelerate its planned lending for the year.

“We expect the credit profiles of highly rated MDBs to withstand the pandemic-induced shock to many of their borrowers…But some of the lower rated MDBs may come under greater credit pressures,” Moody’s said. . (Reporting by Marc Jones Editing by Alexandra Hudson)

Attorney General Andy Beshear has issued a scam alert to warn former and current students about companies offering student debt relief for a fee.

Beshear’s office and the Federal Trade Commission (FTC) say it’s illegal for companies to charge upfront fees before providing debt relief services.

Kentuckians from Allen, Breckinridge, Clark, Daviess, Fayette, Jefferson, Kenton, Mason and Warren counties recently reported receiving strange calls and voicemails from a woman saying she needed to discuss new repayment options federal student loan. Many people who receive calls say they don’t even have a student loan, but have been provided with a callback phone number and a reference number.

The third-party companies behind the calls claim to offer document preparation services and claim they can help you qualify for a loan forgiveness program – but they may want upfront fees and personal and financial information.

“Far too many Kentuckians are already struggling to repay their student loans and I don’t want them to get tricked by scammers and go into even more debt,” Beshear says. “The truth is, there is no service these scammers can offer that you can’t do yourself for free.”

According to the FTC and the Attorney General’s Office, some companies that promise debt relief are scams. To spot them, follow these tips:

• Never pay in advance

Federal debt consolidation with the United States Department of Education is free, and reputable private lenders do not require any upfront payment.

• Beware of imposters

Beware of scammers claiming to be federal government employees. Contact the Department of Education directly at StudentAid.gov or 800-433-3243, or independently contact your private loan officer through a verified number or website.

• Resist pressure

Know that no company can promise quick loan forgiveness and never rush to qualify for repayment plans, loan consolidation or loan forgiveness programs.

• Beware of legal tricks

Beware if a company asks you to sign a “power of attorney”, “third party authorization” or other similar agreements that give third parties legal permission to talk to your student loan officer and make decisions in your name.

• Never provide sensitive information

Never provide your FSA ID or PIN or other personal and financial information to anyone who randomly calls you by phone or contacts you by email.

The Beshear Consumer Protection Office urges current and former students who feel victimized by questionable service to complete a complaint form.

Students having problems with their student loan agent or collection agent should contact the US Department of Education’s Student Loan Ombudsman at 877-557-2575.

Since taking office, Beshear and his team have worked to protect students from predatory colleges and for-profit lenders.

Last week, Beshear’s Consumer Protection Bureau secured $2.2 million in debt relief for former Kentucky ITT Tech students under pressure from deceptive lending practices.

To date, nearly 8,000 Kentucky students have received more than $8 million in student debt relief or restitution from for-profit colleges that Beshear has held accountable.

(provided by the Commonwealth of Kentucky Attorney General’s Office)

Over the past four months, Jeff Bezos’ ex-wife, MacKenzie Scott, has make a donation more than $4 billion to hundreds of humanitarian and charitable organizations, including food banks battling the impact of the pandemic. Scott has a personal net worth of over $60 billion, making him the 18th richest person in the world. Last year, she vowed to give away much of her wealth following her divorce settlement with Bezos.

In July, Scott announced that she had donated $1.7 billion to 116 charities. She then decided to “accelerate” her donations. In the past four months, it has donated an additional $4.15 billion to 384 organizations in the United States and Puerto Rico, bringing its total contributions this year to $6 billion.

Scott wrote in a blog post:

This pandemic has been a wrecking ball in the lives of already struggling Americans. Economic losses and health problems have been worse for women, people of color and people living in poverty. During this time, he significantly increased the wealth of billionaires.

Bezos, who was married to Scott for 26 years, is the richest person in the world. According to the Bloomberg Billionaires Index, Benzos’ fortune before the pandemic was estimated at $113 billion, and now it has risen to around $185 billion.

Scott took a “data-driven” approach to selecting donation recipients. His team primarily focused on “those operating in communities facing high food insecurity, high measures of racial inequality, high local poverty rates, and low access to philanthropic capital.”

Some of his donations have targeted basic needs, such as emergency relief funds, food banks and support for the most vulnerable. Others were aimed at long-term issues that the pandemic has made worse, including debt relief, legal defense funds, civil rights groups, job training and education for “people historically marginalized and underserved”.

Overall, his team looked at 6,490 organizations and selected 822 for “further research”. Scott’s list of organizations that will receive funds include Meals on Wheels, the YMCA, the National Association for the Advancement of Colored People and the Global Fund for Women.

Last year, Scott became involved in the Giving Pledge Initiative, set up by Bill and Melinda Gates and Warren Edward Buffett, which encourages exceptionally wealthy people to donate much of their wealth to charitable causes. .

The Gates have committed $305 million to Covid-19 vaccines and development of diagnosticsas well as $3.7 million for Covid-19 relief efforts. Other significant donations made during the pandemic include:

• In March, fame Rihanna donated $5 million to Covid-19 relief efforts through her Clara Lionel Foundation.
• In April, Twitter co-founder Jack Dorsey announced he was moving 28% of his wealth ($1 billion) to Covid-19 relief efforts and other causes.
• In April, Estée Lauder donated $2 million for Covid-19 relief efforts to “Médecins Sans Frontières”, also known as Médecins Sans Frontières – to support deeply affected and underfunded countries in the fight against the spread of Covid-19 .
• In June, basketball legend Michael Jordan announced he would donate $100 million to Black Lives Matter and other social causes over the next ten years.
• In August, the British rapper Stormzy donated £500,000 finance scholarships for students from underprivileged backgrounds.
• In February, Bezos said he was contributing $10 billion to fight climate change through his philanthropic project called “the Bezos Earth Fund”. In November, Bezos announced the first of these grants, awarding nearly $800 million to sixteen groups.

SINGAPORE: Most Singaporean households remain financially resilient amid the COVID-19 pandemic, although those heavily in debt or employed in hard-hit sectors may be more vulnerable as economic uncertainties persist, the bank said center of the country on Tuesday (December 1).

In its annual Financial Stability Review, the Monetary Authority of Singapore (MAS) also urged households to exercise caution when taking on new debt or engaging in property purchases.

He noted an uncertain outlook for Singapore’s economy which “could have dampening effects on revenue flows”. He also expects resident unemployment to “remain high” next year and the labor market recovery to be prolonged.

READ: Singapore businesses, households and banks must remain vigilant amid uncertain outlook: MAS

MAS said it recognizes some homeowners may struggle to pay their mortgages and worked with the financial industry to roll out relief measures earlier this year. These measures have been recently extended to support cash-strapped individuals and businesses until next year.

Approximately 36,000 applications for mortgage relief were approved and 8,700 people received relief from their revolving unsecured debt in the third quarter.

“Given the uncertain economic outlook, households should resort to these support measures as necessary and take into account the potential volatility of future income streams when considering large purchases and loans,” the central bank said in its statement. report.

“Where possible, they should also continue to insure or consolidate their existing obligations to build resilience to unexpected shocks.”

READ: TOP FEATURE: After COVID-19, where is Singapore’s economy, labor headed?

“RELATIVELY HEALTHY”

The report said Singapore’s household balance sheets were “relatively healthy” at the start of the pandemic, reflecting the financial reserves built up over the years.

Household net wealth reached 4.4 times gross domestic product in the third quarter, up from 3.8 times a year ago, he cited as an example.

“While the increase is partly due to falling GDP, asset values ​​have continued to hold up despite the economic downturn,” MAS said.

“Furthermore, liquid assets such as cash and deposits continued to exceed total liabilities, providing households with a financial buffer against income shocks.”

READ: Singapore revises growth outlook again as third-quarter GDP contracts at 5.8% slower pace amid COVID-19

Its simulations also suggest that the debt service burden of Singaporean households remains manageable in a crisis situation.

Government transfers and relief measures softened the impact of a sharp fall in employment and incomes in the first half, the central bank added.

SOME RISKS

But the risk of indebtedness has increased slightly even if the growth of overall household debt has moderated.

The MAS said overall household debt had continued its downward trend since the introduction of cooling measures in July 2018, but nominal GDP had fallen by a larger margin due to the pandemic.

As a result, household debt as a percentage of GDP rose from 63.1% in the first quarter to 65% from April to June, before reaching 67.1% in the third quarter.

READ: COVID-19 downturn will be more prolonged than past recessions, slow job market recovery: MAS

Other indicators mentioned include the credit risk profile of home loans. This remained solid, with macroprudential measures encouraging prudent borrowing and improving the capital buffer.

But since household resilience is linked to employment and income, credit risk for home loans could increase further if the economic downturn persists, the central bank said.

The unsecured loan cancellation rate – a leading indicator of the credit quality of home loans – rose in the third quarter, suggesting that more households may be struggling to pay for their homes, he added.

“Close monitoring of housing loans to the most vulnerable households is needed in the coming months as the labor market recovery is expected to be prolonged.”

Turning to the real estate market, the report notes that rents for private homes have moderated alongside rising vacancy rates.

READ: Real estate firms expect more transactions as physical viewings of resale apartments, showrooms resume in Phase 2 reopening

Comment: Wondering what the decline in private home sales means? Market fundamentals paint a different story

The vacancy rate for private residential properties rose from 5.4% in the second quarter to 6.2% in the third quarter. Rents fell for the second consecutive quarter in the July-September period, as the rental price index for private residential properties fell 0.5%.

Low rents were observed for both land and non-land properties.

“If demand for rental properties continues to decline, borrowers who rely on rental income to meet their investment property mortgage payments could experience repayment difficulties,” MAS said.

“Prospective buyers should therefore consider the possibility of further weakness in rental income when committing to the purchase of investment properties.”

In the 112-page report, the central bank also urged businesses and local banks to remain vigilant and cautious as an uneven economic recovery “will affect jobs and corporate profits”.

“The risk of financial stress remains during this long period of recovery. Continued vigilance and caution therefore remain warranted,” he wrote.

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CHICAGO (CBS) — Some Chicago-area families have begun begging for help in recent days — a young father with leukemia, a teacher with breast cancer and a shooting victim.

On Tuesday, CBS 2’s Lauren Victory got to the bottom of a program that promises to erase thousands of medical debts for a dime on the dollar.

Inside Trinity United Church of Christ, Pastor Otis Moss III reaches 6,000 people a week.

“We are called to stand up for those who have their backs against the wall,” Moss said.

On a recent Sunday, he praised God and his own followers.

Their donations to a non-profit organization based in Westchester County, New York called RIP medical debt helped strangers pay bills for ambulances, hospital stays and medications, and more.

“He’s a quiet, quiet dream destroyer,” said Pastor Moss. “We brought together several other churches and, and we were able to raise about $38,000. That bought about $5.3 million in debt.”

Victory must have figured out how $38,000 turned into over $5 million in bills. So she Skyped with Craig Antico, co-founder of RIP Medical Debt, and got the rough math.

“You just add two zeros to your donation, and that tells you how much money you can take away — $1, of course, equals $100, and so on,” Antico said.

He explained that medical providers will accept offers from his nonprofit organization to reimburse patient expenses if bills are aggregated in the thousands. Many outstanding debts are years old.

“It’s like getting money now instead of getting it later in the next three or four years from people who can’t really afford it,” Antico said. “TransUnion, which is right there in Chicagoland, they give us debt at a really good price and they’re able to help us find people who need help.”

One of those people was Dianna Western from downstate Belleville. She was stricken with breast cancer, a heart attack and personal expenses.

“Financially, we found ourselves strapped for cash,” Western said.

She has health care coverage, but the coinsurance payment for the procedures totaled $1,412.

But then a letter arrived from RIP, telling him that the debt was gone.

“You’re kind of in shock, you know, and you’re happy,” Western said.

RIP begins to make headlines across the country.

In Collin County, Texas, Elevate Life Church worked with RIP Medical Debt to cancel a $2.2 million debt. The Grand Rapids Church in Wyoming, Michigan also worked with RIP Medical Debt to forgive nearly $2 million to nearly 2,000 families.

Higher Vision Church in Santa Clarita, California has partnered with RIP Medical Debt to raise $16,000 and clear $1.6 million in medical debt. City Church in Russellville, Arkansas worked with the nonprofit organization to pay off $3 million in medical debt for 1,589 local families.

And it’s not just the churches. Atlanta Hawks star Trae Young also canceled more than $1 million in medical debt for Atlanta residents with the help of the organization. And in Murchison, Texas, fifth-grade teacher Reagen Adair had a $3,100 debt erased using RIP medical debt.

Donors can’t choose specific people to help, but Trinity was able to target Cook County – eliminating medical debt for 5,888 families.

“We were going to do blind generosity,” Pastor Moss said.

RIP Medical Debt’s Antico said his nonprofit tries to tailor fundraisers to specific diseases like cancer or diabetes.

(AP) – The Biden administration is considering whether it can take steps to provide student debt relief through executive action, even as it continues to ask Congress to pass legislation to help borrowers and their families .

A tweet from White House press secretary Jen Psaki appeared to go further than her comments during a briefing earlier Thursday, when she said President Joe Biden was counting on Congress to act next. on student loan relief. Biden said he supports up to $10,000 in student loan forgiveness per borrower.

“The President continues to support student debt cancellation to provide relief to students and families,” Psaki tweeted. “Our team is looking at whether there are any steps he can take through executive action and he would be happy to sign a bill sent to him by Congress.”

It came hours after a group of Democrats urged Biden to use executive action to forgive $50,000 in federal student debt for all borrowers. The group, which included Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts, said it would boost the economy and help close the country’s racial wealth gap.

Biden has previously said he supports erasing up to $10,000 in student debt through legislation, but he has not expressed interest in pursuing executive action. In a briefing before posting his statement on Twitter, Psaki appeared to reject the idea of ​​using presidential powers to wipe out debt, saying Biden had already suspended student loan repayments during the pandemic.

“He would look to Congress to take the next steps,” she said.

Legal scholars have fallen back and forth over whether Biden has the power to deal with loan relief himself, with some saying the move is unlikely to survive a legal challenge.

The Trump administration moved to block broad debt cancellation in early January, issuing an Education Department memo concluding that the secretary had no authority to provide such assistance and that it would be up to Congress.

Schumer said he and Warren researched the matter and concluded “it’s one of those things the president can do on his own.” Past presidents have written off debt, Schumer said, but not on the scale proposed.

Democrats are pushing the issue as a matter of racial justice and as relief from COVID-19. They rely on statistics showing that black and Latino borrowers are more likely to go into debt and take longer to repay their loans.

Rep. Ayanna Pressley, D-Mass., said the student debt crisis “has always been an issue of racial and economic justice.”

“But for too long, the narrative has excluded Black and Latino communities, and how this debt has exacerbated deep-rooted racial and economic inequalities in our country,” she said.

Rep. Ilhan Omar, D-Minn., who also supports the measure, said it would help millions of Americans who have suffered financial loss during the pandemic. “The last thing people should worry about is their student loan debt,” she said.

Calls for debt forgiveness are growing after years of tuition hikes that have contributed to rising national student debt. More than 42 million Americans now hold federal student loans worth a combined $1.5 trillion, according to Department of Education data.

In an effort to provide relief soon after the pandemic hit last year, the Trump administration suspended federal student loan payments and set interest rates at zero percent. Upon taking office, Biden extended the moratorium until at least September 30.

Some Democrats say that’s not enough, and Schumer said he recently met with Biden to advocate for broader relief.

Canceling $50,000 in student debt would cost about $650 billion, Warren said. She argues it would be a “big positive” for the economy by allowing more Americans to buy homes and start businesses.

Republicans have pledged to fight any attempt at blanket debt cancellation, saying it unfairly shifts the burden from borrowers to taxpayers.

During a Wednesday hearing with Biden’s nominee for education secretary, Sen. Richard Burr, RN.C., urged the White House to reject calls for mass pardons and pass legislation aimed at simplify loan repayment options.

Copyright 2021 The Associated Press. All rights reserved.

WASHINGTON (Reuters) – Some G20 creditor countries are reluctant to expand and extend coronavirus-related debt service relief for the world’s poorest countries by a year, so a six-month compromise could emerge this week, World Bank President David Malpass said Monday.

Malpass, speaking to reporters at the start of the virtual annual meetings of the World Bank and the International Monetary Fund, said the G20 debt working groups failed to reach an agreement on the two institutions’ efforts for a one-year extension of the G20 Debt Service Suspension Initiative (DSSI).

“I think there can be compromise language that can be a six-month extension (and) it can be renewed depending on debt sustainability,” Malpass said.

Finance ministers and central bank governors from major G20 economies are due to meet via video conference on Wednesday. In May, they launched an initiative to allow poor countries to suspend payments on official bilateral debt owed to G20 creditor nations until the end of 2020, which Malpass says has so far freed up $5 billion. dollars to strengthen coronavirus responses.

Malpass and IMF Managing Director Kristalina Georgieva have warned that much more debt relief is needed for poor and middle-income countries, including principal reduction, to avoid a “lost decade” as the pandemic destroys economic activity.

Malpass said the two institutions would come up with a joint action plan to reduce the debt stock of poor countries whose debt is unsustainable.

But he said debtor countries were too “deferential” to creditor countries and needed to demand a lower debt burden more forcefully. “That dialogue has not yet been as strong as I think is necessary to move this process forward.”

A new World Bank debt study released on Monday showed that among countries eligible for the G20 debt relief program, external debt soared 9.5% in 2019 to $744 billion before the pandemic does not strike.

The official bilateral debt of the poorest countries to G20 countries reached $178 billion in 2019, with 63% of the total owed to China. The study says China’s share of that debt stood at 45% in 2013, the year Beijing launched its global Belt and Road infrastructure campaign.

Malpass said the debt service suspension initiative has accelerated more slowly than expected because “not all creditors are fully participating,” including China.

He said he wanted to see China’s participation in the debt service suspension initiative expanded to more state-sponsored creditors, adding that many of those already participating had no deferred repayment of the principal but still received interest.

Credit: Twenty20

Undertaking a major rewrite of higher education law is one way to address concerns about college affordability and student debt, according to a group of federal lawmakers that includes a congressman from South Jersey.

The group introduced legislation in the U.S. House of Representatives earlier this month that called for increased student tuition subsidies and increased federal aid to states like New Jersey that fund programs free at community colleges, among other proposed policy changes.

New efforts would also be made to help those who already have significant college debt, including establishing more generous repayment terms for low- and middle-income borrowers. The legislation also calls for the expansion of a program that offers loan forgiveness to those entering a public service field after graduating from college.

The introduction of the “College Affordability Act” by a group of sponsors that includes U.S. Representative Donald Norcross (D-1st) comes as new alarms are speaking out about the impact of high student debt on the economy. It also aims to make college more affordable as tuition fees continue to rise nationwide.

“The College Affordability Act invests in America’s schools, teachers and students, makes college more affordable, alleviates student debt and prepares graduates for meaningful careers,” said Norcross, who serves on the college’s committee. Education and House Labor.

“We need to provide every student with the tools to learn and the opportunity to succeed in their careers and this bill does just that,” Norcross said.

Fewer people are signing up as costs rise?

According to recent estimates from the New York Federal Reserve, more than 40 million people across the country have taken out a total of $1.6 trillion in student loans, including more than $106 billion borrowed in 2017 alone. The record for single-year borrowing by students was $125.6 billion in 2010, according to the US Chamber of Commerce. But experts attribute the decline to fewer people enrolling in colleges and universities as tuition fees have risen.

In New Jersey, more than one million people had outstanding student loans totaling more than $43 billion at the end of last year, according to the nonprofit Student Borrower Protection Center. And the average loan balance was nearly $40,000.

Earlier this year, a survey of New Jersey accountants suggested student loan debt was impacting the state’s economy, including preventing those with outstanding loans from saving for retirement or to buy a house. The NJCPA has created a task force take a closer look at the issue of student debt.

Meanwhile, a poll study published last week by The Pew Charitable Trusts found that nearly 70% of respondents believed the difficulties of those facing student debt were weighs on the national economy. Another 80% said the federal government should do more to help borrowers repay their loans.

More generous conditions for borrowers

the law Project revise the law on higher education – which is more than ten years old – by establishing new repayment plans with more generous conditions for borrowers. The measure would also make it easier for borrowers to refinance their debt, in particular by lowering interest rates. It also calls for an expansion of the federal Civil Service Loan Forgiveness Program, which helps forgive outstanding student loans for those entering professions such as teaching and law enforcement.

Other policy changes proposed in the bill are intended to help students directly, including increasing the amount of tuition assistance grants known as Pell Grants that income-qualified students can receive from federal government. The availability of these scholarships would also be expanded to include more students participating in short-term programs, according to the bill.

States would also be encouraged to establish tuition-free community college programs by receiving more federal assistance once they do. Governor Phil Murphy established such a program in New Jersey last year, and earlier this year, state lawmakers renewed its funding in the state budget for fiscal year 2020. The bill would also allow for increased assistance to states investing sustained manner in public colleges and universities.

Additionally, the bill calls for greater federal oversight of the federal college accreditation process and seeks to close a loophole in current law that gives underperforming for-profit schools a financial incentive to enroll veterans. .

Although it has received far less attention than other more high-profile issues that have made headlines in recent weeks, the legislation is being watched closely by groups that represent students, colleges and veterans.

“We look forward to working further with lawmakers on this comprehensive and much-needed legislation to reauthorize the Higher Education Act,” the American Association of Community Colleges said in a statement.

“We are grateful to the House for its comprehensive bill that addresses most of the concerns expressed by the military-affiliated community,” said Veterans Education Success, a Washington, D.C.-based group that advocates for opportunities education for veterans and military service members.

LONDON (Thomson Reuters Foundation) – In Kenya, the coronavirus pandemic has dried up ecotourism, cutting off sources of funding that help protect wildlife and pay income to communities working to preserve nature.

But canceling some of Kenya’s heavy external debt, in exchange for the government devoting those resources to tackling the threats of climate change and biodiversity loss, could tackle several big problems in the future. time, researchers said Tuesday.

“Under pandemic economic bailouts, governments have an opportunity to simultaneously address the crises of debt, climate and biodiversity destruction,” wrote researchers from the International Institute for Environment and Development (IIED) based in London in a report.

It ranks the countries that would benefit the most from these “debt swaps” according to their vulnerability to climate change, biodiversity richness, indebtedness and creditworthiness.

Topping the list are Cape Verde – an island nation off the coast of West Africa – Vietnam, Honduras, Kenya, Nicaragua and Papua New Guinea.

In Vietnam, for example, swapping debt for nature and climate protection could help farmers in the Mekong Delta – an important food-producing area at high risk of sea-level rise – transition to salt-tolerant crop varieties, said report co-author Paul Steele. .

Opening up fiscal space could also expand a government effort that pays farmers, especially in poorer indigenous communities, to plant trees and conserve forests, he said.

Most of the $8 trillion in debt owed by developing countries in 2019 – before the virus crisis – is held by wealthy countries in the Organization for Economic Co-operation and Development, China and big money managers. assets, Steele said.

All might have good reason to consider such exchanges, he told the Thomson Reuters Foundation.

China, for example, is hosting the upcoming Convention on Biological Diversity summit, now postponed to 2021, which aims to increase funding for nature conservation, among other goals.

As the largest holder of bilateral debt with developing countries, China could lead by example in testing debt swaps, and recently mentioned them at a meeting of the Asian Infrastructure Investment Bank, Steele said.

Asset managers facing debt write-offs following the coronavirus downturn could choose to use them for productive purposes – which could both support struggling economies and reduce the need for additional debt relief. debt in the future, Steele said.

Some investors who have committed to net-zero emissions by 2050 might also consider debt swaps as part of their broader mission, he added.

Debt-for-nature and debt-for-climate swaps are a relatively new idea. In 2018, Seychelles signed a $27 million deal brokered through The Nature Conservancy, with the money released going to create a large marine reserve, Steele said.

Similar agreements could be particularly suitable for other small island developing states in the Caribbean or the Pacific with high debt, high climate vulnerability and rich biodiversity, he said.

In all exchanges, money would be made available for climate and nature protection under a “results-based” payment system, in which the debtor nation must do what it promises to get debt relief, he said.

While Britain no longer holds much developing country debt after forgiving most of it decades ago, as host of the major UN climate summit next year, it could put pressure on creditors in the London financial center to participate in such exchanges, he said.

These deals could become more attractive — and important — as debt rises in developing countries grappling with the coronavirus pandemic and economic downturns, the researchers noted.

Developing country debt was already at record highs before the COVID-19 crisis, rising from 110% in 2010 to 170% of gross domestic product across all countries in 2019, according to the International Monetary Fund.

By Adrian Stones and Yigal Chazan*

As China moves to tackle an ongoing financial crisis among coronavirus-hit African members of its flagship Belt and Road Initiative (BRI), or new ‘Silk Road‘, some in the West, skeptical of the company’s stated development goals, will be alert to countries that might hand over project stakes in return for loan repayment concessions.

Beijing has long denied claims that investments in the BRI, a trillion-dollar infrastructure project boosting trade ties between China and much of the developing world, risked overwhelming beneficiaries of a so much debt that they have little choice but to cede majority stakes in assets and/or agree to give China excessively long leases – the so-called debt trap diplomacy.

President Xi Jinping and his officials have sought to highlight the BRI’s contribution to economic development. And while Chinese funds are helping to build vital transport links and boost industrial activity in low-income countries, the debts they are incurring in the process seem increasingly unsustainable.

This seems to be the case in Africa, where China is seen as the biggest creditor. Johns Hopkins University identified some $152 billion in Chinese loan financing provided to 49 African countries between 2000 and 2018. Their ability to service Chinese loans – in 2018, an estimated debt of $64 billion – could now be seriously compromised by the fall in commodity prices and the recession. IMF predicts sub-Saharan African economies will contract 3.2% this year, “considerably worse than expected in April”.

In recent years, BRI countries have canceled or renegotiated projects due to debt problems, but with pandemic-related financial difficulties, others are now asking China for flexibility on their repayment schedules, and several are considered African states, according to the FT. China has signed to a G-20 commitment in April suspend debt service until the end of the year, potentially freeing up 76 of the poorest countries, including 40 in sub-Saharan Africa, to spend scarce funds to deal with the economic damage caused by the health crisis.

But according to the trade publication Eurocurrency, China added caveats that would effectively exclude hundreds of large loans made through the BIS. An opinion piece in the Atlantic Council Public Policy Blog pointed out that Chinese officials distinguish between interest-free, government-to-government credits and preferential loans from the China Export-Import Bank and the China Development Bank which “account for the largest share of Chinese lending to the foreign”.

In June, President Xi says to African leaders that he would cancel the interest-free loans due this year, but these are supposed to account for less than 5% Chinese loans to Africa. Worryingly for the continent – 39 of which are part of the BRI program – it appears that Beijing does not see preferential loans as tradable. An article from the Chinese state corporation world times said the loans are “not applicable for debt relief” due to the commercial nature of the projects they fund.

The article, however, pointed out that the repayment problems could be solved by several approaches, such as the addition of subsidies by China to help revive the projects; use of Chinese companies to help operations; or by swapping debt for equity.

For those who view China as a predatory lender, the potential offer of debt-for-equity swaps bodes ill. In 2017, Sri Lanka granted the Chinese a 70% stake in – and a 99-year operational lease for – the port of Hambantota, after struggling with debt service. When he came to power, former Malaysian Prime Minister Mahathir Mohamad pledged to cancel or renegotiate “unfair” BRI projects accepted by his predecessor.

The opacity of many BRI transactions means that it can be difficult to determine the nature of the risks countries are taking. While President Xi promised last year to make plans more transparent and financially viableCritics will nonetheless be alert that Beijing may be exploiting the financial weakness of its African partners to seek larger stakes in BRI projects during bilateral debt relief talks.

Faced with its own economic difficulties, China’s generosity in rescheduling debt service may be limited. Beijing will, however, be well aware that its critics will seize on any evidence that it is exploiting its influence in the negotiations. Yet there is another factor that likely militates against the latter. For the BRI to work, China needs the developing world to see it as an economic partner. A hardline attitude towards debt relief undermines this perception, especially in the eyes of African countries, as their economies have been among the hardest hit by the pandemic. This could deter them from future BRI projects.

Those are the calculations Chinese officials are likely to make, but these days it’s hard to guess Beijing given its conduct in Hong Kong. In its defense, China would say that in the past it has shown flexibility on debt servicing, including its decision in 2018 to extend loan repayment by Ethiopia for a railway linking Addis Ababa to neighboring Djibouti within 20 years. Additionally, researchers at Johns Hopkins University revealed that in the cases they examined of African countries facing debt difficulties, there had been no seizures of assets.

Yet critics of Beijing would point the finger at Tanzanian leader John Magufuli indefinite suspension last year of a port project agreed by its predecessor, which gave China a 99-year lease for the facility, as evidence of the tough terms Beijing is believed to be negotiating. And there have been lingering concerns than Djiboutiwhich reportedly received nearly $1.4 billion in Chinese funding for projects, may fall victim to the “debt trap.”

With some BRI projects likely on hold due to the pandemic, Beijing has tried to build trust and renew faith in the company by supporting health services in partner countries. The initiative could also serve to sweeten the pill it might ask loan recipients to swallow when discussing repayments, or simply distract from tough negotiations.

nicknamed the “Health Silk Road”, a redesign of an earlier initiative, it is difficult to assess the effectiveness of the measure. China’s partners, especially those in Africa, will no doubt welcome any medical aid they receive, but hope they emerge from the shadow of the pandemic with their strengths intact.

*Adrian Stones is Director and Yigal Chazan Head of Content at Alaco, a London-based business intelligence consultancy. This article was published by Geopolitical Monitor.com

Economy

Kenya eyes action from China after Paris Club debt relief

Tuesday, January 12, 2021

Treasure CS Ukur Yatani. FILE PHOTO | NMG

Kenya is considering debt service waivers by more lenders after the Paris Club of international creditors granted it a 32.9 billion shillings loan repayment suspension to help ease pandemic-related financial difficulties of Covid-19.

The Paris Club – which includes Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Republic of Korea, Spain and the United States – said on Monday that it accepted a request from Kenya to suspend debt service from January to the end of June.

“Kenya is committed to using the resources freed up by this initiative to increase spending to mitigate the health, economic and social impact of the Covid-19 crisis,” the Paris Club said in a statement released. on its website.

The country has also requested relief under the G-20 Debt Service Suspension Initiative (DSSI) estimated at 40.6 billion shillings from January 1 to June 30 from non-Club creditors. Paris.

“The Government of the Republic of Kenya is also committed to requesting from all its other official bilateral creditors debt service treatment in accordance with the agreed term sheet and its addendum,” the G20 countries said.

Kenya is expected to pay its biggest bilateral lender, China, 109.4 billion shillings this year, including loan installments for the second phase of the standard gauge railway to Naivasha.

Last year, China announced it would suspend payments from 77 developing countries to complete the G20 offer, which is proving more attractive to countries heavily indebted to Beijing.

Treasury Cabinet Secretary Ukur Yatani said the government was already in talks with China and expected a similar deal to be finalized within weeks.

“China is also generally on board with that, but we will get tougher in the coming weeks,” Yatani said.

Kenya initially resisted the suspension of G20 debt repayment, fearing it would limit access to Eurobonds and lower the country’s credit rating.

Moody’s has previously placed Kenya in B2 with a negative outlook, citing huge external debt, falling revenues and currency risks.

Mr Yatani flip-flopped on his stance on G20 debt relief, saying pressure from the World Bank and International Monetary Fund (IMF) had forced the Treasury to seek debt relief.

The two Bretton Woods institutions have pledged to give Kenya low-cost concessional loans on the condition that it accepts the suspension of G20 debt repayments.

This now paves the way for Kenya to secure approval for a $2.3 billion (250.4 billion shillings) loan facility for budget support from the IMF Board of Directors due to meet in february.

The country plans to borrow an additional $1.5 billion (150 billion shillings) from the World Bank in 2021.

Kenya is grappling with high debt payments which have soared to 7.1 trillion shillings or 69.2% of GDP at a time when revenues have fallen following the coronavirus pandemic

Tax collections by the Kenya Revenue Authority (KRA) fell by 15.03% or 33.27 billion shillings in the first two months of this fiscal year to 188.08 billion shillings due to the effects extended training periods of Covid-19 containment measures on economic activity.

This means that Kenya will need more debt to fill the fiscal hole or turn to lenders to restructure debt or offer debt forgiveness to reduce loan repayment expenses.

The country’s deteriorating cash position, marked by declining revenues and worsening debt service obligations, forced it to revert to these conditional loans.

Kenya has pledged to reform its state-owned enterprises, which will raise taxes, cut subsidies and put some people out of work.

Kenya had steered clear of direct budget financing from institutions such as the IMF and World Bank under the administration of former President Mwai Kibaki, preferring project support.

Kenya joined Tanzania, Uganda and Burundi who took the Paris Club freeze.

Rwanda, whose over-indebtedness is considered moderate, does not have as much as South Sudan and Somalia, which are both already in difficulty.

Islamabad: Cash-strapped Pakistan has asked members of the G-20 countries for debt relief with a commitment not to take on new non-concessional loans except those permitted by IMF guidelines and from the World Bank, according to a media report.

The official requests were sent to individual countries on Friday as part of the G-20 COVID-19 debt service suspension initiative, a senior Economic Affairs Ministry official told the Express Tribune on Monday.

On April 15, the Group of 20 major economies announced a freeze on debt repayments for 76 countries, including Pakistan, for the period from May to December 2020 as they struggle to cope with the coronavirus pandemic, under subject to each country making a formal declaration. request.

However, one of the eligibility criteria was that the recipient country would not incur any new non-concessional debt during the suspension period, other than agreements under this initiative or within agreed limits under IMF debt limitation policy (DLP) or WBG policy. on non-concessional borrowings.

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Read also:For a broke Pakistan, Bahawalpur was the kingdom that kept on giving. Then he disappeared

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The Pakistani government did not mention the debt relief in the request letters, although it assessed the cumulative amount of relief at $1.8 billion for the period May to December 2020.

Pakistan has also notified the IMF, World Bank and Paris Club of its decision to formally request debt relief.

Last month, the IMF’s resident representative in Pakistan, Teresa Daban, said that Pakistan had not formally made any request to G-20 countries for debt relief.

Pakistan owes $20.7 billion to 11 members of the Group of 20 major economies. Of this amount, $1.8 billion would fall due by December 2020, including interest payments, according to the Ministry of Economic Affairs.

During these eight months, Pakistan will have to reimburse 1.8 billion dollars to its 11 members. That includes $1.47 billion in principal repayments and $323 million in loan interest, according to the daily.

In addition, $613 million in Saudi debt and $309 million in Chinese debt will come due, according to the Ministry of Economic Affairs.

During this period, Pakistan is also required to return $23 million to Canada, $183 million to France, $99 million to Germany, $6 million to Italy, $373 million in Japan, $47 million to South Korea, $14 million. to Russia, 1 million USD to the United Kingdom and 128 million USD to the United States.

According to an IMF condition, the $7.5 billion loans that the Imran Khan government had obtained from China, Saudi Arabia, the United Arab Emirates and Qatar cannot be repaid during the period of the program. IMF, according to the report.

These loans were only guaranteed for one year to avoid default on international debt obligations, but the IMF had made it a condition that this money would be renewed each year until the program ended in 2022.

If the G-20 member countries agree to the request, Pakistan will have four years to return the amount, including a one-year grace period.

Pakistan has assured G-20 members that it will not incur new non-concessional debts during the suspension period other than agreements concluded under the initiative or in accordance with limits agreed under the policy of IMF debt limitation or World Bank Group policy on non-concessional lending. ready.

An IMF report had estimated Pakistan’s post-COVID-19 external financing needs at $25.8 billion with a financing gap of $2 billion.

For the next fiscal year, the IMF has projected Pakistan’s gross financing needs at $29.3 billion and a financing gap of $1.5 billion.

The IMF had approved emergency loans of $1.4 billion, which more than filled the projected financing gap, but the amount fell short of overall needs.

G-20 countries have announced debt relief to help poorer countries use the fiscal space created to increase social, health or economic spending in response to the coronavirus crisis. A monitoring system was to be put in place by the international financial institutions.

The debt relief will last until the end of 2020, but G-20 countries could consider a possible extension, taking into account a report on the liquidity needs of eligible countries by the World Bank and the IMF .

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Read also : IMF mulls $1.4bn loan to Pakistan to help deal with economic impact of Covid-19

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Democrats and “Squad” members have revisited the issue of student debt forgiveness, saying it’s time to help their fellow Americans.

In a tweet Tuesday, Rep. Alexandria Ocasio-Cortez rejected arguments against writing off heavy debts accumulated in continuing education.

“‘Things were bad for me, so they should stay bad for everyone’ is not a good argument against canceling debt – student, medical or otherwise. #CancelStudentDebt,” Ocasio-Cortez wrote.

“Things were bad for me, so they should stay bad for everyone else” is not a good argument against debt cancellation – student, medical or otherwise. #CancelStudentDebt

— Alexandria Ocasio-Cortez (@AOC) November 16, 2020

Rep. Ayanna Pressley also contributed to the debate, adding, “Cancelling student debt will ensure a fair economic recovery from COVID-19, revive our economy, and close the racial wealth gap. One more thing,” a- she declared.

Cancel the rent.
Cancel the mortgage.
Cancel student debt.

— Congresswoman Ayanna Pressley (@RepPressley) July 21, 2020

Rep. Ocasio-Cortez supports the long-term goal of having tuition-free public colleges to avoid huge debt in the first place. She believes the current education system is “financially decimating [people in] every generation.”

We should also push for public colleges to be free to prevent this massive debt bubble from financially decimating people in every generation. It is one of the easiest progressive policies to “pay for”, with multiple possibilities ranging from a Wall St transaction tax to a wealth tax to cover it.

— Alexandria Ocasio-Cortez (@AOC) November 16, 2020

The “Squad”, made up of four young and diverse women elected to the House of Representatives – Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts, and Rashida Tlaib of Michigan — strongly supported the write-off of $30,000 in student loan debt, which they outlined in their Student Debt Emergency Relief Act in March.

The bill aims to provide immediate monthly payment relief to those who have taken out federal student loans and crucially prevent those with student debt from having to make involuntary payments during the coronavirus pandemic.

Congressmen Ayanna Pressley and Ilhan Omar said the legislation would provide much-needed debt relief to some 45 million workers and families, who they say are “crushed by student debt during the COVID-19 pandemic. “.

Rep. Pressley said in a statement: “During this unprecedented crisis, no one should have to choose between paying their student loan, putting food on the table, or protecting themselves and their families.

“Our $1.6 trillion student debt crisis stands in the way of any meaningful economic stimulus efforts during and after this pandemic, which is why we need to cancel student loan debt in order to get the economy moving again. bring immediate relief to workers and families crushed by the financial and emotional burden of massive student debt. We must prioritize debt cancellation for the 45 million student borrowers who are struggling to repay their debt during this difficult time.

KEEP my beloved, departed mother (whom you would not have been able to tie) out of your ignorant mouth.

— Ayanna Pressley (@AyannaPressley) November 17, 2020

As part of the President donald trump, a six-month suspension of student loan repayments has been put in place until September 30. In addition, no interest has been added to the debt. Collection appeals were also put on hold, while borrowers who had defaulted would not be denied their tax refunds. The relief was later extended until December 31 as the pandemic continued. But Democratic representatives want to go further with a more permanent solution: erase up to $30,000 in unpaid student debt, which will help “to restore economy”.

Debt cancellation critics say a bailout will simply redistribute the debt to other Americans and largely benefit those who can afford to go to college, disproportionately helping a wealthy segment of society at the expense of the taxpayer. Texas representative Dan Crenshaw called the proposal to write off the debts “immoral”, in response to the senator. Bernie Sanders saying Wall Street should help foot the bill.

“During the financial crisis, Wall Street received the largest taxpayer bailout in American history. Now it’s Wall Street’s turn to help rebuild the vanishing middle class,” Senator Sanders said. in June.

Senator Crenshaw replied: “When you say #cancelstudentdebt you are saying that a minority of people who have had the benefit of graduating should have their debt paid off by hard working taxpayers, 2/3 of whom n ‘have not graduated themselves, or have already paid off their own student debt.

Alexandria Ocasio-Cortez once spoke about being personally affected by student debt, “I also have student loans, and I think it’s so funny, a year ago I was serving tables in a restaurant” , she said in 2019, “and it was literally easier for me to become the youngest woman in American history to be elected to Congress than to pay off my student debt.”

Rep. Ocasio-Cortez made a payment on her outstanding balance during a 2019 congressional hearing. “I literally made a student loan payment while I was sitting here in this chair, and I watched my balance and it was $20,237.16,” she said. at the meeting on student debt.

“I just made a payment that brought me down to $19,000 (£15,412) so I feel really accomplished right now.”

At the start of the pandemic, Reps Ocasio-Cortez, Omar and Tlaib were paying off all of their student loans.

Rep. Rashida Tlaib believes the student loan problem is tied to a larger issue of racism. “I truly believe that canceling student debt is about racial justice,” she said.

“Even though some middle-class and wealthier families have a lot of student debt, low-income people, especially black and brown people, have higher balances and are more likely to drop out of school because “they can’t pay. Canceling all student debt would restore access to education as a right.”

Senator Elizabeth Warren and Senate Democratic leader chuck schumer put pressure on the president-elect Joe Biden to “provide meaningful relief to struggling Americans and globally forgive up to $50,000 in student loan debt”.

Senator Warren called on Biden last week to “cancel billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping close the racial wealth gap. This is the most effective executive action available for a huge economic stimulus.”

1. Biden-Harris can write off billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping close the racial wealth gap. This is the most effective executive action available for massive economic recovery.

— Elizabeth Warren (@SenWarren) November 12, 2020

Some 45 million people in the United States have outstanding student loans and owe an estimated total of $1.56 trillion, making it the second largest consumer debt after mortgages.

The average student loan for those who graduated in 2018 was $29,200.

The Congressional Budget Office estimates that the US deficit will total $4 trillion this year.

Containment and Disaster Relief Trust

April 9, 2021

Purpose of the CCRT. In February 2015, the IMF transformed the Post-Catastrophe Debt Relief Trust into the Catastrophe Containment and Relief Trust (CCRT), expanding the the range of situations covered by IMF disaster assistance to include rapidly spreading epidemics. In March 2020, the IMF adopted a set of reforms to the CCRT to enable the Fund to provide immediate debt service relief to its poorest and most vulnerable members affected by the current COVID-19 pandemic and any future pandemic. the trust provides grants to pay debt service due to the IMF to eligible low-income member countries that are affected by the most catastrophic natural disasters or are struggling with public health disasters, such as epidemics or global pandemics. The objective of debt relief under the CCRT is to free up resources to meet the exceptional balance of payments needs created by the disaster rather than having to allocate these resources to debt servicing.

Eligibility. Assistance through the CCRT is currently available to countries eligible for concessional borrowing through the Poverty Reduction and Growth Trust (PRGT) and whose per capita income is below the operational threshold of International Development Association (IDA) (currently US$1,185) or, for small states with a population of less than 1.5 million, a per capita income below twice the IDA threshold (currently $2,370).

Structure. The CCRT has two windows: (i) a Disaster Containment window, to help contain a public health disaster; and (ii) a post-disaster relief window, to provide exceptional assistance following a catastrophic natural disaster. Windows have different purposes, qualification criteria, and support requirements.

Disaster containment the window:

• Qualification. There are two alternative qualifying cases of public health disasters. The first concerns a life-threatening epidemic that has spread to several regions of the affected country, causing significant economic disruption, and has the capacity to spread or is already spreading to other countries. A significant economic disruption is defined by at least: (i) a cumulative loss of real GDP of 10%; or (ii) a cumulative loss of revenue and an increase in expenditure equivalent to at least 10% of GDP. The second case involves a potentially deadly global pandemic that inflicts severe economic disruption on all IMF members and creates balance-of-payments needs on such a scale that it warrants a concerted effort to support the poorest countries and the most vulnerable through substantial additional subsidies. and debt service relief. To qualify for assistance, the affected country must put in place appropriate macroeconomic policies to meet balance of payments needs.
• Debt service relief. Eligible low-income countries that are affected by public health disasters as defined above may receive initial grants covering eligible debt owed to the IMF within a period not exceeding two years from the date of the initial decision. (i.e. until April 2022), provided that the CCRT has sufficient means.

Post-disaster relief window:

• Qualification. A catastrophic natural disaster that has (i) directly affected at least a third Population; and (ii) destroyed more than a quarter of the country’s productive capacity, as estimated by early indications such as destroyed structures and impact on key economic sectors and public institutions or caused greater estimated damage 100% of GDP.
• Debt flow relief. Eligible low-income countries affected by catastrophic disasters as defined above would receive debt stream relief on the servicing of their IMF debt falling due within two years of the disaster.
• Relief of outstanding debt. Full cancellation of a country’s outstanding debt to the IMF is also possible in cases where the disaster has created substantial and long-lasting balance of payments needs and where the resources freed up by debt relief Outstanding debt is essential to meet these needs. This would generally only be the case if the country was faced with very high debt. Relief of outstanding debt would be conditional on concerted debt relief efforts by the country’s official creditors and the availability of resources within the CCRT.

CCRT funding. The CCRT was initially funded with the balance of the former Post-Disaster Debt Relief Trust and the remaining accounts of the Multilateral Debt Relief Initiative funding. In response to the covid19 pandemic, the IMF has launched an urgent fundraising effort that would allow the CCRT to provide debt service relief for the entire two-year period, while leaving the CCRT sufficiently funded for future needs. This will require a commitment of approximately $1.4 billion

Use of the CCRT. To date, three tranches from April 2020 to October 2021— have been approved for the 29 eligible countries with eligible debt. In previous cases, three Ebola-affected countries (Guinea, Liberia, and Sierra Leone) received nearly US$100 million in aid from this trust in February-March 2015. The previous debt relief trust post-disaster was used to provide assistance to Haiti July 2010 of approximately US$270 million, eliminating all of Haiti’s debt to the IMF

The American flag floated above the courthouse and its huge parking lot. Just outside a fence and a guard post, protesters had pitched tents, hoisted a small Puerto Rican flag and hung banners saying, “The problem is not the junta, it’s the colony.

Ms Sánchez said protesters converged on the spot at 6 p.m. Wednesday, as soon as they learned that Promesa had passed the Senate. She said she was angry at, among other things, a provision to lower the minimum wage here to $4.25 an hour for young workers and the government’s announcement not to test supply in water.

“We’re looking at, basically, the next Flint,” she said, referring to the struggling Michigan town where high levels of lead have been found in drinking water. Flint’s deeply troubled finances are controlled by a state-appointed emergency officer, under an arrangement similar to what is now expected for Puerto Rico.

As if to embody the emotional whirlwind here, the governor, Mr. García Padilla, reversed his allegiance on the issue of federal intervention, making a 180-degree turn at the very last minute. A staunch opponent of federal surveillance, in early June he became the first sitting governor in Puerto Rico’s history to visit Cuba, where he attended a Caribbean summit as an observer, spoke with President Raúl Castro and laid the foundations for a commercial office in Havana.

The move stunned policymakers in Washington, who had pushed Promesa’s sensitive dossier for months and expected the governor to join them in the latest lobbying offensive on Capitol Hill.

This week, García Padilla traveled to Washington, where he dutifully accompanied Treasury Secretary Jacob J. Lew to lobby for the bill.

There are 45 million borrowers who owe $1.6 trillion in student debt, according to Forbesand Quinnipiac University students are calling on President-elect Joe Biden to lighten the load in the wake of the COVID-19 pandemic and economic downturn.

“Students shouldn’t worry about school debt when they turn 50,” said Jennifer Guzman, a first-year psychology student. “There are so many students who are working double duty just to try and pay their school debt and barely make a dent. There are other students who are first-generation Americans, and their parents don’t even earn half of their school dues.

Students like Guzman are not alone in their frustration. A coalition of 236 mostly progressive groups called on Biden on Nov. 18 to use his executive powers to cancel student debt on his first day as president.

During the campaign trail, Biden promised to immediately forgive $10,000 of each borrower’s debt as part of his COVID-19 response.

Ricardo Bernabe Torres, a finance professor at Quinnipiac, said a student he spoke to about his student loans told him Biden’s plan wouldn’t be enough.

“The $10,000 wouldn’t make much difference to her, but she said she was happy for everyone that it would help,” Torres said.

Torres said he supports student loan debt forgiveness because of conversations like these he had with students.

“It’s good for the economy,” Torres said. “I don’t think it’s going to solve everything, but we have a different generation than we had before. It is the first generation that is poorer than previous generations. There is less home ownership. There are delays in retirement.

The pandemic is only exacerbating existing trends, Torres said.

“The looming feeling of these debts can set people back,” Torres said. “When they want to take a risk or make a big financial decision like buying a house or having kids, the impending gloom has an impact.”

Sumer Perratti, a junior media studies student, said student debt relief would give her time to explore her areas of interest without worrying about paying off student debt.

“Cancelling student debt would give me the opportunity to freely explore the field of communications and follow my passion without worrying about college expenses,” Perratti said.

Critics of canceling student loans argue that it is unfair to people who have already paid off their loans and would cost too much. Perratti said each family’s financial situation is different and reviews should be more understanding.

“I think people need to understand that a lot of us come from low-income or working-class households and going to a very reputable university is often a risk,” Perratti said. “We must bank on the success that our schools promise us to pay to avoid living in debt for the rest of our lives. College is so expensive now, and it’s unfair that my life is at a disadvantage because my family doesn’t make enough money.

As someone who doesn’t have kids and has never had his own student debt from scholarships, Torres said he always feels empathy for those who owe her. refund.

“We all benefit from a more educated society,” Torres said.

Due to a concept Torres called “degree inflation,” an increasing number of careers require not just a bachelor’s degree, but also a master’s degree. More degrees mean more money and fewer opportunities for those with less money.

“We all impose this as a society and so not everyone is in the position of being able to go to school without going into debt,” Torres said. “Are we going to stop these people from getting a degree?”

For many students and activists, the answer is no.

“Every year, student debt increases and hits a new high,” said Collin Doria, a sophomore in health sciences. “The pandemic is not improving anything, so the debt should be cancelled.”

India said on Thursday it was in talks with Sri Lanka over its request for a debt repayment deferral.

“The file has progressed and discussions at the technical level are currently underway,” said Foreign Ministry spokesman Anurag Srivastava.

He was responding to a question about the issue during an online press conference.

Sri Lanka is reeling from a major economic crisis and has asked several countries and international donors, including India, for debt relief.

Asked about reports of Chinese envoy to Nepal Hou Yanqi meeting with several leaders in Nepal and whether she was meddling in the country’s political turmoil, Srivastava declined to comment.

I have no comment to make on the internal political situation in Nepal, he said.

Responding to a question on the Enrica Lexie case, Srivastava said the Foreign Ministry was quick to inform the Supreme Court and the government of Kerala of the verdict of an international court on the matter.

In its ruling, the court said two Italian sailors who shot down two Indian fishermen cannot be tried in an Indian court.

He did, however, confirm the conduct of Indian authorities following the 2012 incident.

India has accused two Italian marines, Salvatore Girone and Massimiliano Latorre, aboard the MV Enrica Lexie, an Italian-flagged tanker, of shooting dead the two Indian fishermen who were on a fishing boat off Kerala in the exclusive economic zone (EEZ) of India.

The incident happened off the coast of Kerala on February 15, 2012.

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The World Bank, IMF and Oxfam have all called on the G20 to extend the debt suspension of the poorest countries battling coronavirus.

The Group of 20 major economies will make a decision on extending the current suspension of debt repayments for the poorest countries towards the end of the year, postponing assurances of further relief as the global pandemic ravages nations of the whole world.

All member countries have started implementing the Debt Service Suspension Initiative which is currently only expected to run until December and the G-20 expects the status quo to put $14 billion dollars available to fight the virus, said Finance Minister Mohammed Al-Jadaan of host Saudi Arabia. told reporters on Saturday after a virtual meeting of ministers and central bankers. So far, 42 countries have requested assistance under the plan, resulting in the suspension of $5.3 billion in repayments.

The decision to consider extending the debt suspension follows calls from the World Bank, the International Monetary Fund and charities such as Oxfam. The rate of Covid-19 infections is rising in many countries, and even with the April G-20 agreement to waive bilateral debt payments for vulnerable countries, the cost of servicing bonds is crowding out the health and social expenditure.

The World Bank last month forecast emerging market output will decline for the first time in at least six decades.

The virus and global recession will lead to increased poverty in poor countries and some countries’ debt burdens are reaching crisis levels, World Bank President David Malpass said in prepared remarks for the meeting of Saturday. He urged the G-20 to extend the status quo until the end of 2021 and expand the scope.

“More and more desperate”

“The situation in developing countries is increasingly desperate,” Malpass said. “Time is running out. We need to act quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency.”

Al-Jadaan said the G-20 will receive a progress report from the IMF and World Bank ahead of the annual lenders’ meetings in October to help decide on next steps.

IMF Managing Director Kristalina Georgieva said in a statement that she hoped the G-20 would consider an extension of the debt moratorium, without giving a specific timeline. The IMF is stepping up action to make better use of existing special drawing rights, or reserve assets, she said.

After Saturday’s meeting, French Finance Minister Bruno Le Maire said France supported extending the debt service suspension until the end of 2021 and that nations were on track to achieve this. to an agreement. He said European countries were continuing to discuss work to establish a digital business tax by the end of the year and a minimum business tax to tackle evasion.

However, the commitments made at Saturday’s meeting may not yet go far enough, according to Jubilee USA Network, a nonprofit group that advocates for debt relief for small economies.

“Given the severity of the current crisis, we were hoping to see more action,” Jubilee’s Eric LeCompte said in a statement.

-With help from Vivian Nereim, Reema Alothman and Matthew Martin.

By AFP

ISLAMABAD: Pakistan has secured a $1.7 billion debt relief deal to help offset financial headwinds caused by the coronavirus pandemic, officials said on Monday.

The deal, after months of negotiations with creditors, will provide a moratorium on debt payments for large swaths of the current financial year and help ease the cash-strapped country’s massive financial obligations.

“The Pakistani government has successfully negotiated and concluded rescheduling agreements with 19 bilateral creditors, including members of the Paris Club,” Pakistan’s Ministry of Economic Affairs said in a statement.

The ministry went on to describe the deal as “timely” which will help save “the lives and livelihoods of millions of people”.

Pakistan’s economy was already on life support before authorities began shutting down large segments of the economy in the spring as a series of lockdown measures were rolled out to combat the spread of the coronavirus.

Prime Minister Imran Khan has repeatedly called for international donor debt cancellation as tax revenues soared, inflation soared, the currency devalued and budget deficits widened.

Earlier this year, the G20 and the Paris Club agreed to waive most debt payments for the world’s poorest countries in 2020 as sweeping virus lockdowns rocked the global economy.

In June, Pakistan was named as one of the few countries to secure a moratorium on Paris Club debt repayments in a bid to mitigate the economic impact of the coronavirus crisis.

To add to the country’s woes, Pakistan is also facing growing questions over the huge debt it has incurred in recent years from Chinese-funded infrastructure projects.

Beijing has steadily poured money into Pakistan, investing more than $50 billion under the China-Pakistan Economic Corridor which has improved infrastructure, electricity and transport links across the country.

PARIS/TOKYO/WASHINGTON: G20 countries agreed for the first time on a common restructuring framework government debtin anticipation of the coronavirus crisis leaving some poorer nations struggling to pay and in need of relief.
With the Covid-19 pandemic straining the finances of some developing countries, G20 finance ministers said on Friday that more help was needed than a current temporary debt freeze, which will be extended until June 30, 2021.
Major creditors, including China, will have to follow common guidelines agreed by the G20, which specify how debt deemed unsustainable can be reduced or rescheduled.
Non-governmental groups said the deal should have gone further by including middle-income countries and forcing private investors accept cancellations.
The coronavirus crisis has exacerbated the problems of the poorest countries, 50% of which are currently in debt distress or at risk of debt distress and, in an early sign of its impact, Zambia is on the verge of becoming Africa’s first sovereign default in the world. COVID era.
managing director of the imf Kristalina Georgieva Last week, African states alone faced a funding gap of $345 billion through 2023 to deal with the pandemic and its economic impact.
“I count on the constructive spirit of everyone to ensure a rapid and cooperative implementation of the common framework, while several countries are already asking for debt treatments, particularly in Africa,” said Bruno Le Maire in French finance. G20 counterparts in an online meeting.
China, which accounted for 63% of the total debt owed to G20 countries in 2019, has been reluctant to acknowledge the need for outright debt cancellation or reduction.
Under the new framework, creditor countries will negotiate with a debtor country, which will have to seek the same terms of treatment from private sector creditors.
The regime borrows heavily from the rules established by the Paris Club, an informal grouping of governments of mainly wealthy countries created in 1956, which was until now the only common forum to negotiate debt restructurings.
G20 finance ministers said in a joint statement that the new framework aims to “facilitate the rapid and orderly processing of debt” for countries eligible for the debt payment freeze put in place in April, but which does not only included private sector creditors on a voluntary basis.
“From now on, all interested parties must ensure that the common framework is implemented. Debt transparency is extremely important,” Japanese Finance Minister Taro Aso told reporters after a G20 conference call, calling the deal “historic.”
Wave of crises
The new framework also goes further by requiring the participation of all public creditors, after China was criticized by G20 partners for not including debt owed to its state-owned banks.
Wary of debt cancellations, Beijing has defined the state-owned China Development Bank as a private institution, resisting calls for full participation in debt relief.
Although China signed the framework, it was still unclear how it would implement the measures, a source familiar with the negotiations told Reuters.
Tim Jones, head of policy at Jubilee Debt Campaign, said in a statement that the G20 announcement enabled but discouraged outright debt cancellation, and did not create a mechanism to compel the participation of the private sector.
“This announcement falls far short of what is needed to tackle the wave of debt crises in the poorest countries,” he said.
“With many countries facing debt crises and Zambia today on the brink of default, the G20 must stop kicking the road,” he added.
Eric LeCompte, UN debt adviser and executive director of Jubilee USA Network, said including private sector creditors was an important step, but criticized the G20 for not including middle-income countries.
“Unfortunately, middle-income countries that will see some of the biggest increases in poverty due to the crisis, are being left out of this process,” LeCompte said.
The Paris Club, which is organized by France’s finance ministry, and G20 countries had already agreed last month to extend this year’s debt freeze under which they were postponing $5 billion in debt service to help the world’s poorest countries.
G20 leaders are expected to endorse the common framework at a virtual summit meeting next week.

SAN FRANCISCO (KGO) — Nakeia Warren and Andre Archibald are just two of more than 2,000 consumers who have contacted the Federal Trade Commission to complain about Ameritech Financial, a student debt relief company.

According to the FTC, between 2014 and 2018, consumers paid Ameritech Financial $60 million in fees in exchange for Ameritech Financial submitting documents on their behalf to loan repayment plans.

RELATED: Ameritech Financial employee claims struggling student debt relief company was helping people

Warren and Archibald thought the money they paid to Ameritech Financial was going towards their student loans, but the FTC says that was not the case.

“I felt humiliated. I was very angry about it,” Warren said.

Archibald served in the military for 19 years and now works in counterintelligence.

“It makes you feel like an idiot,” Archibald said.

The two paid thousands of dollars up front, followed by recurring monthly fees.

The FTC says this upfront fee should serve as a wake-up call to consumers.

RELATED: Sonoma County CEO charged under student debt relief program to be released under house arrest

“Asking you for a fee before we do anything for you and in doing anything, what I mean is actually providing you with the debt relief services that you sign up for and that are illegal,” said FTC staff attorney Michelle Grajales.

Consumers also say Ameritech Financial encouraged them to exaggerate their family size to qualify for loan forgiveness programs.

In February, the FTC filed a lawsuit against Ameritech Financial and CEO Brandon Frere outlining the alleged deceptive practices.

“I would have kept paying out of ignorance if it hadn’t been for the legal notice I received,” Warren said.

In Ameritech Financial’s offer letter, there is a disclosure at the bottom in fine print. It explicitly says that the company does not assume or pay consumer debts. It also states that there are many free government programs and this is not a government program. It’s information that Warren says she only noticed after the FTC contacted her.

She then contacted the Ministry of Education.

“When I said Ameritech the woman on the phone finished the finances for me – she already knew who the company was, she said I had spoken to so many people like you and unfortunately you were taken advantage of as many more,” Garenne said.

On November 29, the FTC filed an injunction shutting down Ameritech Financial. Brandon Frere also faces a charge of wire fraud for transferring company money to personal and offshore accounts.

Frere’s attorney did not respond to a request for comment today, but has already spoken to ABC7 News outside of court.

“There are an awful lot of issues in this case that will emerge as the case progresses,” attorney Ed Swanson said.

RELATED: Sonoma County leader arrested over student debt relief program

Meanwhile, Warren and Archibald have several thousand dollars more student loan debt than when they started paying Ameritech Financial because of the interest that continued to accrue on their loans.

the The FTC has a list of companies and those barred from debt relief.

WASHINGTON (Reuters) – The United States is open to extending a joint framework for debt treatment agreed on Friday by G20 finance officials for the world’s poorest countries to include countries with middle income and small island states, a senior US Treasury official said.

However, this view is not shared by all members of the Group of 20 major economies at this stage, the official said.

“We are very open to extending this to other countries,” the official told reporters. “It’s a framework that we believe could apply to low-income countries, as well as middle-income countries, small island states.”

On Friday, G20 countries agreed for the first time on a common framework for restructuring public debts as the COVID-19 pandemic exacerbates problems for poor countries that were already facing high levels of debt. overwhelming before the outbreak.

The World Bank, International Monetary Fund and finance ministers from many middle-income countries have argued that the G20 debt relief initiative must be expanded to include countries that are not currently eligible.

US approval marks a substantial step forward in this push.

The senior US official called the joint framework a historic achievement that brought creditors such as China, India and Turkey into a coordinated debt restructuring process, alongside the Paris Club of official bilateral creditors.

But he said the United States would carefully monitor its implementation, with a focus on China, which has increased its lending sharply over the past 20 years. Estimates of total Chinese loans ranged from $350 billion to more than $1 trillion, the official said.

“We will certainly be watching closely how it works in practice, and with a particular eye on Chinese participation,” the official said. “It’s really the lack of transparency on Chinese debt that allows them, in some cases, to game the system and avoid full participation.”

Several banks across the UAE have canceled the debts of 1,607 Emiratis, totaling more than Dhs 869.85 million, the Non-Performing Debt Relief Fund announced on November 30.

Participating lenders included: First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Al Hilal Bank, Mashreq Bank, Emirates NBD, Abu Dhabi Islamic Bank, Standard Chartered, RAKBANK, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic, NBQ and the Arab Bank for Investment and Foreign Trade (Al Masraf).

This decision was implemented in accordance with the directives of the President of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan.

Under the directives of Khalifa bin Zayed, with the support of Mohamed bin Zayed and the follow-up of Mansour bin Zayed, the Citizens Debt Settlement Fund announces the exoneration of 1,607 citizens from debts worth 869,845,000 AED with the participation of 12 banks across the UAE. pic.twitter.com/oBjAi3o9Na

— مكتب أبوظبي الإعلامي (@admediaoffice) November 30, 2020

“Since its inception in 2011, under the guidance of President His Highness Sheikh Khalifa, the fund has undertaken many important initiatives to address the issues and concerns of citizens and provide them with the means for a decent standard of living, in cooperation with national banks and the Central Bank,” said Jaber Mohammed Ghanem Al Suwaidi, Director General of the Court of the Crown Prince of Abu Dhabi and Chairman of the Supreme Committee of the Non-Performing Debt Relief Fund.

Al Suwaidi also expressed his thanks to all the banks that have been part of this initiative, the official news agency W.A.M. reported.

The most direct impact Americans will see from COVID-19 recovery plan signed by President Donald Trump on Sunday evening will be payments of $600, which will be sent in the coming weeks.

And while there was some debate about whether that amount should have been higher, President-elect Joe Biden said any aid approved by Congress in his lame session before his inauguration would only be a “down payment” on additional assistance would offer his administration.

The $600 payouts have gotten the lion’s share of the attention, but plenty of other funding is coming to the first state.

This includes an additional $300 per week for people receiving unemployment benefits through March 2021. Businesses hit hard by the pandemic will be able to apply for a second round of the Paycheck Protection Program to continue paying their workers. The small business debt relief program is also being extended. Nationally, more than $8 billion in debt relief has been distributed, with approximately 900 small businesses participating in the initial program.

“This package will provide quick relief to our small businesses, especially those hardest hit by this pandemic,” said U.S. Senator Chris Coons of Delaware, “Delaware workers who have been laid off through no fault of their go; and to our families struggling to pay rent and put food on the table.

Coons echoed Biden in suggesting more relief should come from the new administration in 2021.

“This may not be the last relief bill,” Coons said, “but it is a solid compromise that will bring relief to Delawares who need it before the holidays.”

The additional help is long overdue, Coons added. “The support we provided through the CARES Act in March had to be extended months ago,” he said. “We’ve expanded SNAP benefits, we’ve expanded help for food banks and for hungry Americans, but there are far too many hungry Americans.”

WASHINGTON (Reuters) – Many countries may need debt restructuring in the wake of the global coronavirus pandemic and its economic fallout, the International Monetary Fund’s chief economist said on Tuesday.

Gita Gopinath told an online event hosted by Oxford University that there was no debt crisis at the moment, but there would be a “much more persistent need for debt relief for the world’s poorest nations” in light of the pandemic.

Given that around 40% of low-income countries were already in debt distress or at high risk of becoming so, with growing numbers, she said there may well be “a need for debt restructuring in many country”.

The comments came a day before the Group of 20 major economies and the Paris Club of official creditors are organizing a high-level conference on debt, capital flows and sustainable finance in the context of the economic crisis triggered by the pandemic.

G20 finance ministers, IMF and World Bank leaders and private sector creditors will discuss options for responding to capital outflows from emerging markets, debt challenges and how best to foster strong growth and sustainable.

Gopinath and other international financial experts have said they believe the freeze on debt service payments offered by G20 countries to the poorest countries until the end of the year should be extended.

They have also repeatedly called for increased private sector participation in the G20 debt moratorium.

The World Bank’s new chief economist, Carmen Reinhart, told the online event that the original timeline for the G20 debt initiative should be reviewed and the debt restructuring process should become more fast and faster.

“The main constraint is to make sure everyone is on board, which hasn’t been the case,” she said, noting that private sector involvement “didn’t happen.” .

Argentina on Saturday extended its debt restructuring offer until Monday, after creditors largely rejected the proposal to avert the country’s ninth sovereign debt default.

President Alberto Fernández said Argentina’s goal was to make “commitments we can keep” after the government failed to garner enough support for its bid to restructure $65 billion of external debt before Friday’s original deadline.

“It’s a negotiation with very unique characters from the world of finance. Now let’s see how many accepted the offer, if there are any counter offers. I heard there might be some counter offers in the next few days. The negotiation continues, nothing is closed,” Fernández told a local radio station on Saturday morning. “Nobody wants to fall into default.”

The country had given bondholders until Friday to accept a restructuring proposal which calls for interest payments to be deferred until 2023 and principal payments until 2026.

Most foreign bondholders rejected Argentina’s offer, according to people familiar with the matter, and turnout was so low that the government chose not to announce the results in an official statement.

“It’s a pretty big fail,” said one investor.

Martín Guzmán, Argentina’s economy minister, said on Friday that dialogue remained open with creditors.

“We appreciate the fact that there are creditors who enter into the proposed exchange, choosing the path of a lasting relationship,” he told El Cronista, a newspaper. “If creditors who have not yet entered have other ideas consistent with the capacity to pay identified in the government’s and IMF’s debt sustainability analysis, then we are prepared to consider them.”

Bondholders have said they are now considering making a counter offer, although many are reluctant to do so until the government admits its offer and the assumptions on which it is based are not acceptable, according to an investor participating in the negotiations.

The main Argentine bondholders have remained firm in their opposition to the deal since the government introduced it last month. Three creditor groups – whose members include BlackRock, Fidelity, T Rowe Price, GMO, VR Capital Group and other major institutional investors – immediately rejected the terms. Earlier this week they double over their critics, saying in a joint statement that they would not support the Buenos Aires proposal.

Without the support of these creditors, Argentina will struggle to avoid another default. The group which includes BlackRock, Fidelity and T Rowe Price says its members own more than 25% of the country’s bonds issued since 2016, and more than 15% of previously restructured bonds issued in 2005 and 2010 – the so-called bonds of exchange . Another group representing swap bond holders claims to hold more than 16% of the bonds outstanding.

Depending on the bond, Argentina needs the approval of between 66 and 85 percent of creditors. While the three groups remain separate, they have aligned more in recent weeks, according to a person familiar with the matter.

“[Guzmán’s] the intransigence brought all bondholders together,” the person said.

Bondholders have disputed that under the current proposal they will see no payout for three years. When coupon payments begin in 2023, they say, the proposed initial size of 0.5% on most bonds is simply too low.

Members of the creditor groups have also hit back at Argentina for its handling of the negotiations so far. Many investors ignored recent meetings with Guzmán and his team, citing that the deal was being framed as a “take it or leave it” offer.

“The old strategy of using harsh rhetoric to drive prices down so they can come back to make it look okay won’t work,” said a member of one of the groups. “Many of these investors bought the bonds when they were issued.”

On current terms, analysts see an average recovery value of 32 cents on the dollar for bonds issued after 2016, and about 35 cents on the dollar for exchange bonds.

Investors said they are now looking to May 22, the end of a 30-day grace period for payments they have already missed. Some see the way to an agreement, with Argentina showing some flexibility, especially given the risks in the event of another default by the country.

“It doesn’t benefit anyone to get into a protracted situation,” said a person familiar with the negotiations. “We know what it looks like. Argentina spent a decade in financial isolation” after defaulting in 2001, the person added.

A bipartisan group of senators negotiating a $908 billion coronavirus relief package is circulating a summary of the plan that says $13 billion would be allocated to the agricultural sector.

the abstract, obtained by Agri Pulse, does not specify how the money would be spent, except to allocate $600 million for disaster relief in the fisheries sector.

The outline of the proposal only indicated that $26 billion would be allocated to agriculture and nutrition.

According to the new summary, the plan would temporarily increase the Individual Monthly Supplemental Nutrition Assistance Program by 15% for four months and provide funding for the Emergency Food Assistance Program to help food banks and pantries.

It would also temporarily increase the value of the benefits of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), allowing participants to purchase additional fruits and vegetables.

Speaking to reporters Wednesday afternoon, a senator leading the negotiations, Sen. Joe Manchin, DW. Va, said lawmakers are making progress on state and local funding, as well as liability protections.

These two issues have been two major sticking points among Republicans and Democrats over the past few months, which is why they have yet to reach an agreement on COVID relief.

Interested in more coverage and information? Receive a free month of Agri Pulse.

“Hopefully we’ll finish our language by tonight,” Manchin said. “That’s what we’re aiming for.” He said he understood there was agreement Tuesday night on state and local funding and believed lawmakers were reaching agreement on liability protections.

When asked if Senate Majority Leader Mitch McConnell, R-Ky., and other GOP leaders were taking the bill seriously, Manchin replied, “They don’t another on the table”.

The bipartisan package would provide about $10 billion for broadband needs, including $6.25 billion that would go to state broadband rollout and broadband connectivity subsidies. The grants are intended to ensure “affordable broadband access” during the pandemic, the summary says.

An additional $3 billion would be allocated to the Education Connectivity Emergency Fund. This money would be given in priority to rural areas that need it most to help education and distance education providers distribute hotspots, devices and other connected devices.

The Federal Communications Commission would receive $475 million for its COVID-19 telehealth program to bolster the efforts of healthcare providers to fight the coronavirus. There would be 20% reserved for small rural suppliers.

The agricultural section of the summary also indicates that USDA Rural Development would obtain funding for water and wastewater programs. The amount was not specified.

For more news, visit www.Agri-Pulse.com.

The Biden administration is examining whether it can take steps to ease student debt through executive action, even as it continues to call on Congress to pass legislation to help borrowers and their families.

A tweet from White House press secretary Jen Psaki appeared to go beyond her comments at a briefing earlier Thursday, when she said President Joe Biden was counting on Congress to act next on student loan relief. Biden said he supports up to $ 10,000 of student loan cancellations per borrower.

“The president continues to support the cancellation of student debt to provide relief to students and families,” Psaki tweeted. “Our team is examining if there are any steps he can take through executive action and would welcome the opportunity to sign a bill sent to him by Congress.”

It came hours after a group of Democrats urged Biden to use executive action to write off $ 50,000 in federal student debt for all borrowers. The group, which included Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts, said it is boosting the economy and helping close the country’s racial wealth gap.

Biden had previously said he supported erasing student debt of up to $ 10,000 through legislation, but had shown no interest in executive action. During a briefing before posting his statement on Twitter, Psaki appeared to reject the idea of ​​using presidential powers to write off debt, saying Biden had already suspended student loan payments during the pandemic.

“He would look to Congress for the next steps,” she said.

Lawyers have fallen on either side of whether Biden himself has the power to grant loan relief, with some saying the move is unlikely to survive a legal challenge.

The Trump administration took action to block a large-scale debt cancellation in early January, issuing an Education Department note concluding that the secretary did not have the authority to provide such assistance and that it would be up to Congress. .

Schumer said he and Warren had researched the matter and concluded that “it’s one of those things the president can do on his own.” Former presidents have written off the debt, Schumer said, but not on the scale proposed.

Democrats are pressing the issue as a matter of racial justice and COVID-19 relief. They rely on statistics showing that black and Latino borrowers are more likely to take on student debt and take longer to repay their loans.

Representative Ayanna Pressley, D-Mass., Said the student debt crisis “has always been a matter of racial and economic justice.”

“But for too long, the narrative has excluded black and Latin communities, and the ways in which that debt has exacerbated deep-rooted racial and economic inequalities in our country,” she said.

Representative Ilhan Omar, D-Minn., Also supports the measure, which said it would help millions of Americans who suffered financial losses during the pandemic. “The last thing people should worry about is their student debt,” she said.

Calls for debt cancellation have escalated after years of rising tuition fees that have contributed to the increase in national student debt. More than 42 million Americans now hold federal student loans totaling $ 1.5 trillion, according to data from the Department of Education.

In an effort to provide relief shortly after last year’s pandemic, the Trump administration suspended federal student loan payments and set interest rates at zero percent. When he took office, Biden extended the moratorium until at least September 30.

Some Democrats say that’s not enough, and Schumer said he recently met with Biden to advocate for broader relief.

Canceling $ 50,000 in student debt would cost about $ 650 billion, Warren said. She says it would be a “big boon” to the economy by allowing more Americans to buy homes and start businesses.

Republicans have pledged to fight any attempt at blanket debt cancellation, saying it unfairly shifts the burden from borrowers to taxpayers.

In a hearing Wednesday with Biden’s candidate for Education Secretary, Senator Richard Burr, RN.C., urged the White House to reject calls for mass pardon and instead pursue legislation aimed at to simplify loan repayment options.

Former San Antonio mayor Julián Castro, one of the candidates running for the 2020 Democratic presidential nomination, released a comprehensive education plan Monday which calls for eliminating tuition fees at public colleges as well as delaying student loan payments until a degree starts paying for borrowers.

It’s the most detailed view of higher education offered by any Democratic candidate to date besides Massachusetts Senator Elizabeth Warren. Contrary to Warren’s Higher Education Proposal Released last month, Castro’s plan encompasses all levels of public education, supporting universal pre-K as well as new investments in K-12 schools and teacher training.

While Castro’s proposal offers a more limited approach to student debt than the Warren plan, it fits his ambitions for college affordability and takes a similar hard line on for-profit colleges.

His proposal would see the federal government partner with states to offer free classes at public colleges and vocational schools. And that would increase the maximum Pell grant to $ 10,000 to cover other costs of participation.

The plan also calls for a zero cap on student loan repayments until a borrower’s income exceeds 250% of the federal poverty line (about $ 31,225 for a one-person household in 2019).

For borrowers in the process of repaying their student loans, the monthly payments would not exceed 10% of their adjusted gross income. After 20 years of repayment, including months without payments, the proposal calls for forgiveness for the amount owed on student loans.

Castro also offered a loan discount for borrowers who have used federal benefit programs like SNAP for three years over a five-year period. And the plan would allow student borrowers to pay off their loans through the bankruptcy process.

His plan calls for for-profit colleges to be excluded from federal aid programs and proposes tighter oversight of institutions that have converted to nonprofit status.

Castro’s plan also addresses access to higher education for marginalized students. The proposal does not specifically mention the Pell scholarships for incarcerated students, but calls for more educational opportunities for incarcerated minors and adults. And Castro is asking that deferred action for beneficiaries of incoming children and holders of temporary protection status be eligible for federal student aid programs.

He noted that many students have been swindled by predatory for-profit schools, which Ms DeVos has been accused of promoting with her policies. Nine percent of high school graduates attend for-profit colleges and universities, but 34 percent of delinquent loans belong to these students.

“No student should be a victim of fraud, and if there is fraud, there are consequences, and there will be consequences,” Ms. DeVos replied. “But we shouldn’t judge institutions on their tax status. Let’s be very honest here; there are bad actors on both sides of the equation.

She added, with some indignation: “Let’s talk about nonprofits that do bad work, that are prone to bribes, that lie to improve their statistics on US News and World Report. . referring to the recent college admissions scandal that rocked the Ivy League and other elite institutions.

Since taking office, Ms DeVos has attempted to overhaul the 2016 process launched by the Obama administration that was supposed to pave the way for students to get relief on their loans after their colleges were found to have misled them with exaggerated claims of false promises of employment. . The Obama administration approved nearly 30,000 such requests, estimated at $ 450 million, during its last year in office. The Ministry of Education approved 16,155 from January 1, 2017 to December 31, 2018.

The Obama administration rewrote the borrower defense rule, which was virtually unheard of until 2015, when two large for-profit chains, ITT Technical Institute and Corinthian Colleges, began to collapse. The new rule was due to come into effect in 2017.

But Ms DeVos has delayed the release of what she called “free money” and decided to narrow its scope to only forgive the debts of students who, no matter what their schools do, fail to cope with. obtain gainful employment and can prove that they have suffered harm.

A 2017 report of the Inspector General of the Ministry found that the Obama process had some flaws. Mrs DeVos set up a multi-level system grant partial relief to some borrowers, but these measures were overturned by the courts. The ministry then exceeded a deadline to rewrite the rules, which were to come into effect this year.

Zambia said on Wednesday it had deliberately refused to pay $ 42.5 million for its external debt, as it is about to be officially declared the first African economy to default during the coronavirus pandemic.

The copper-rich country did not make an interest payment on a Eurobond, a dollar-denominated bond placed with international investors, which was due to be paid on Friday.

Failure to meet his obligations could see him officially declared in default in the coming days.

But central bank governor Christopher Mvunga said the non-payment was an intentional move.

“It’s not that we can’t pay, just that if we pay one creditor, we have to pay all creditors,” Mvunga told reporters in Lusaka, adding that it was a “conscious decision” not to to pay.

“One of the conditions is that all creditors should be treated equally or fairly. I can’t pay one creditor and I don’t pay the other. It’s not fair, so default itself in this context, “he said.

The government asked in September for a six-month deferral of interest payments on three commercial Eurobonds worth $ 3 billion.

But it missed the $ 42.5 million interest payment owed on a bond on Oct. 14, prompting rating agency S&P to declare the country in default.

Fitch Ratings said on Tuesday it had lowered the default rating of the country’s foreign currency issuers to “RD” from “C” following the non-payment.

The grace period that ended on Friday was for the payment of a $ 750 million Eurobond that was due to expire in 2022.

An official declaration of default is inevitable, analysts say.

“Technically they are in default, but officially this has to be declared (by a special panel) made up of credit analysts from major investment banks,” said Robert Besseling, executive director of EXX Africa, a firm of Johannesburg-based political and economic risk consultant. .

It should happen in a few days, he said.

– Failure to report within days –

The story continues

Lusaka-based independent economist Mambo Hamaundu, “It’s no longer a secret that there is a flaw.”

Zambia’s external debt has soared to nearly $ 12 billion this year.

Analysts suspect that after the default, the government will resort to printing money to buy more government bonds. This would drive up inflation and trigger a fall in the value of the kwacha.

“And you (will have) in your hands a Zimbabwean scenario that Zambia is already heading a lot towards,” Besseling warned.

Zambia is also a major debtor to China, which officially owes around $ 3 billion, although analysts estimate the actual figure could be between $ 6 billion and $ 9 billion.

Finance Minister Bwalya Ngandu told lawmakers on Wednesday he was hiring all creditors to try to negotiate a debt repayment rescheduling.

“We believe this provides a window of opportunity to reach a mutually acceptable solution despite their decision to deny the request for debt suspension,” the minister said.

The G20 last week declared a framework to restructure the debt of 38 countries in sub-Saharan Africa ravaged by the coronavirus. Zambia has requested suspension of its debt as part of the deal.

In the meantime, the international charity ActionAid “hopes that bondholders will agree to relieve the debt of countries like Zambia,” said Zambian director Nalucha Nganga.

But the “best option will be debt cancellation,” she told AFP.

str-sn / rl

• 24-year-old college student and YouTuber Tiffany Ferguson paid off $ 10,000 in credit card debt in six months.
• With an income of approximately $ 75,000 in 2019 – which equates to approximately $ 50,000 after taxes and business expenses – Ferguson said she used four strategies to quickly get rid of her five-figure debt.
• From around 18 to 20, she had a balance of up to $ 1,000 a month, but it skyrocketed after six months of study abroad and a few unexpected dental surgeries.
• She said she used EveryDollar, Google Sheets and QuickBooks to reduce her debt and shared her budget template, budget spreadsheet and a screenshot of her EveryDollar app with Business Insider.
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Tiffany Ferguson paid off $ 10,000 in credit card debt in six months. And she wants to help others do the same.

The 24-year-old is a YouTuber and a college student, and she racked up debt for about three years, ranging from 18 to 20.

With almost always a balance of up to $ 1,000, the debt was incurred primarily when it needed to make ends meet between paychecks all the way to college. This balance plus six months of study abroad in France and a few unscheduled dental surgeries quickly amounted to $ 10,000.

“Overall, I was a young adult, college student, just trying to survive, without the financial support of anyone else,” Ferguson told Business Insider.

“I certainly had irresponsible spending habits, but I think my biggest problem was not being able to work enough or earn enough money to meet my bills, let alone start paying off my debts. sure a lot of people would say I shouldn’t have studied abroad or paid to straighten my teeth. “

Ferguson had never made more than around $ 25,000 a year until 2019, when YouTube became his full-time job.

At the end of 2019, his total income for the year was around $ 75,000, which fell to $ 71,000 after business expenses and around $ 50,000 after taxes. From there, she made the decision to pay off her entire $ 10,000 credit card debt (she also managed to spend about $ 8,800 in total on her student loans).

With average expenses of around $ 3,000 per month, his income has fallen to around $ 36,000 for the year, meaning that in total, nearly $ 20,000 of his after-tax income of $ 50,000 is went to debt repayment and about $ 30,000 to other bills and expenses.

Ferguson said one of her biggest challenges in 2019, the first year she was earning more than she used to, was spending extra money on her debt.

A debt repayment journey, reported on YouTube

“At the start of the year,” she said, “I decided to publicly announce my debt repayment journey on YouTube, in part to hold myself accountable. Once I was ready and committed, my actual strategies included tracking all of my expenses, creating spreadsheets, and making additional payments to my debt whenever possible. “

“I use the EveryDollar app to track and categorize my spending,” Tiffany said. “Once I categorize the expenses in EveryDollar, I enter the totals into my annual budget sheet from Google Sheets.” She said she customized the apps to have corresponding categories so she could transfer the same expenses between them.

She entered her monthly income, taxes saved or paid, savings, etc. “The annual budget sheet makes it easier to get a complete overview of my inflows versus my outflows for the year. “

By budgeting each month, she was able to see how much interest she was being charged on her credit card balance. It was over $ 100 for seven of the first eight months, but since she reduced it, it was $ 50 or less from September through December.

Tiffany also said she uses QuickBooks to track her business expenses, income, and tax payments.

Tiffany’s Youtube video detailing her milestones has over 280,000 views to date, and she has shared her exact budgets with Business Insider.

Read on to see the budget sheets Tiffany used to pay off her credit card debt.

November 17, DJ4Animals will launch a capsule collection of varsity-style clothing at Dover Street Market in New York title, State University Fund for Free Education. The pieces refer to the designer’s personal experience with student debt. and aim to raise awareness of the prohibitive tuition fee increases and the socio-economic implications of having – or not having – a university degree. This is the first collection under the core organization of DJ4Animals, SUFE Fund, which provides students with financial mentoring and resources with the aim of making higher education accessible and affordable for all.

With reworked pieces bearing the designer’s signature ‘FREE EDUCATION’, the collection examines what happens when graduates metaphorically shed their ‘college skin’ and financial concerns become pervasive. With SUFE, seeks to change this narrative so that students can use their studies to thrive and embrace positive change rather than just survive.

The next drop will offer SUFE Printed t-shirts for $ 70 USD, ten limited edition Promissory Note hoodies for $ 395 and a special Dover Street Market promissory note stitched hoodie for $ 625. Visit the physical location or DSM NY online shop November 17 to buy.

Dover Street Market also joins the fight against food insecurity in partnership with Sky High Farms, using Awake NY, Denim Tears and more to create exclusive garments.

MONTGOMERY, Alabama (WSFA) – That’s a mind-boggling number. About 45 percent of all bankruptcies in Montgomery County alone are related to massive medical debts.

But two Montgomery churches and a synagogue are doing their part to help ease the burden on those struggling with debt.

Kreg Sherbine is a member of the First Christian Church Disciples of Christ in East Montgomery, a church related to RIP Medical Debt Charity based in New York State.

“We are called to take care of those in need,” Sherbine said.

And those in need in Montgomery County include about 1,200 people whose medical debts have been significantly reduced or written off entirely. They represented a combined total of $ 1.2 million in medical debt.

“In a lot of cases, people hit their deductible but couldn’t pay the rest,” Sherbine said. “You also have those who are uninsured.”

It all started 10 years ago with RIP Medical Debt Charity. Two men linked to the debt collection industry apparently changed their minds and took a different path.

“Their goal is to buy as much medical debt as possible and forgive those least likely to pay it,” Sherbine said.

A decade later, RIP Medical paid off $ 1 billion in medical debt in the country; $ 3 million statewide, every part of which comes from donations.

“They buy the debt from collection agencies and forgive it,” Sherbine said, adding that he knows the stories of relief followed by joy.

Sherbine remembered a story told to her by someone who had their debts canceled. The person was upset and said they had to read it twice to believe it.

A reduced or forgiven hospital bill is good medicine for heart and soul.

If you would like to donate or learn more about how RIP Medical Debt Charity works, log on to ripmedicaldebt.org

Sherbine says the other Montgomery church involved is the Community Congregational United Church of Christ on South Court Street. And there is also the Agudath Israel Etz Ahayem Synagogue on Cloverdale Road.

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