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Economics Daily Digest: Regulating payday loans, a hopeful look at …

By Rachel Goldfarb, originally published on Next New Deal

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Roosevelt Institute Fellow Saqib Bhatti’s proposal to allow the Fed to lend directly to municipalities is one of many ideas you can vote on in the Progress Change Institute’s Big Ideas Project. The top 20 ideas will be presented members of Congress. Voting ends on Sunday, January 11. Click here to vote!

CFPB Sets Sights on Payday Loans (WSJ)

Alan Zibel reports on the Consumer Financial Protection Bureau’s plans to explore creating new rules to regulate predatory payday lending, the first such rules on a federal level.

Consumer-advocacy groups say the loans are deceptive because borrowers often roll them over several times, racking up fees in the process. They also criticize high annual interest rates that can range from less than 200% to more than 500%, depending on the state, according to research by the Pew Charitable Trusts.

Early this year, the CFPB plans to convene a panel of small lenders to discuss its payday-loan plans, according to the people familiar with the matter. The bureau, like other federal agencies, is required to consider input from small businesses if regulations being developed are likely to have a significant impact on them.

Follow below the fold for more.

Signs of Economic Promise Are Offering Some Hope for the New Year (NYT)

Rachel Swarns reports on the positive signs that some are seeing, including new jobs for long-term job seekers and raises and more hours for workers at retail chains like Zara.

Don’t Believe What You Hear About the U.S. Economy (AJAM)

Dean Baker says it’s not yet time to celebrate an economic comeback. Growth is still slow enough that the labor market won’t reach pre-recession numbers by the end of 2015.

Why the Democrats Need Labor Again (Politico Magazine)

Timothy Noah interviews Thomas Geoghegan on his new book, which he describes as a “last-ditch effort for the Democrats” to revive the labor movement and win elections.

California Colleges See Surge in Efforts to Unionize Adjunct Faculty (LA Times)

Larry Gordon speaks to adjunct faculty at some of the private colleges in California that are seeing union organizing on campus for the first time.

Austerity’s End Strengthens U.S. Recovery (MSNBC)

Steve Benen corrects Grover Norquist’s attempt to give Republicans credit for economic growth, pointing to small increases in public spending as proof that austerity didn’t fix anything.

The Five Major Things We Screwed Up in Inequality in 2014 (The Guardian)

Suzanne McGee’s list includes the minimum wage, which she says needs a boost at a federal level, and race and economic opportunity, an issue she says we practically ignored.


Here's Why Student Loan Debt Isn't the Real Millennial Horror Story

We’ve all heard the terrible tales of millennials struggling in the job market and questioning whether the cash they (and their parents) plunked down for college—and the mountains of student loan debt they accumulated—was worth it. As disappointing as it might be to be living back home with Mom and Dad, those underemployed, degree-holding millennials between the ages of 25 and 32 aren’t the only folks struggling financially. Most of their peers only have a high school diploma, and they’re having an even tougher time making ends meet.

According to a recent ;Pew Research Center report ;on the long-term financial downside of not going to college, two-thirds of millennials in that age group don’t have a college degree. As a result, 21.8 percent of millennials without a bachelor’s degree are living in poverty. Meanwhile, a comparatively small 5.8 percent of their peers with degrees are impoverished.

“There’s been a lot of attention paid to the adversities facing college-educated millennials, but generally the college-educated young adults, they’re doing better than earlier generations of college-educated young adults,” Richard Fry, the lead researcher on the Pew study, told NPR.

Fry found that college-degree-holding millennials earn about $17,500 more than those with just a high school diploma. Even though student loan debt is ;greater than America’s total credit card debt, and a job at a local coffee shop isn’t what most grads anticipated, plenty of evidence backs up Fry’s findings that a degree is still the best guarantee of a job and financial stability. A May report from the Federal Reserve Bank of San Francisco found that over a college degree holder’s lifetime, he or she is likely to earn significantly more than someone with just a high school diploma—about $830,000 more, on average.

“Although other individual factors might affect the net value of a college education, earning a degree clearly remains a good investment for most young people. Moreover, once that investment is paid off, the extra income from the college earnings premium continues as a net gain to workers with a college degree,” that report’s authors wrote.

Folks who only graduated from high school are also more likely to not have a job at all.

The ;Bureau of Labor Statistics‘ August 2014 unemployment data revealed that 6 percent of Americans with only a high school diploma are unemployed. Only 3.6 percent of Americans with a bachelor’s degree or higher are unemployed.

“Among the less educated, it’s not simply that they’re trailing behind their college-educated counterparts; it’s that they’re doing worse off than earlier generations of less educated adults,” Fry said. ;

That means that if today’s millennials without a degree don’t find the money and time to go back to school or enroll in job training or vocational courses, they are more likely to be jobless and have fewer financial resources throughout their lifetime. ;

Related stories on TakePart:

10 States Where Colleges Will Make You Go Broke

5 College Majors With the Lowest Unemployment, and 5 With the Highest

10 Amazing Millennials Who Are Saving the World

Original article from TakePart

Educationhigh school diplomacollege degree […]

Money comes from pool of cash raised through fundraiser events


After forgiving millions of dollars in medical debt, Occupy Wall Street is tackling a new beast: student loans.

Marking the third anniversary of the Occupy Wall Street movement, the group’s Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

In total, the group spent a little more than $100,000 to purchase the $3.8 million in debt.

While the group is unable to purchase the majority of the country’s $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game.

This debt Occupy bought belonged to 2,700 people who had taken out private student loans to attend Everest College, which is run by Corinthian Colleges. Occupy zeroed in on Everest because Corinthian Colleges is one of the country’s largest for-profit education companies and has been in serious legal hot water lately.

Following a number of federal investigations, the college told investors this summer that it plans to sell or close its 107 campuses due to financial problems — potentially leaving its 74,000 students in a lurch.

“Despite Corinthian’s dire financial straits, checkered past, and history of lying to and misleading vulnerable students, tens of thousands of people may still be liable for the loans they have incurred while playing by the rules and trying to get an education,” a Strike Debt member said in an email.

Then on Tuesday, the company was hit with a lawsuit from the Consumer Financial Protection Bureau over allegations of predatory lending practices. The lawsuit demanded that Corinthian forgive the more than $500 million in outstanding student loan debt that its students had incurred since 2011. Should the court rule in the CFPB’s favor, that means the debt Occupy bought and abolished would have been forgiven anyway.

Corinthian Colleges spokesman Kent Jenkins said the school stands by the “high-quality” education its students have received and disputes the CFPB’s allegations. He noted that Corinthian’s default rate is lower than other community colleges and its graduation and job placement rates are higher.

Levia Welch, 32, enrolled at Everest College in January of last year. She had been struggling to find a job without a high school diploma or GED, so she signed up for an 8-month career training and GED preparation program at Everest. She took out several loans to pay for the program, and as it came to an end, she says administrators told her she wouldn’t be able to get a GED unless she stayed in the program longer — which meant taking out even more loans.

Related: 40 million Americans now have student loan debt

Eventually she gave up, saying the classes weren’t helpful and were just putting her deeper into debt. She dropped out in May with nearly $18,000 in debt, spread out between four or five loans. She paid off one small loan of $636 while she was still in the program, and she has been looking for jobs so that she can pay the rest off. But without a GED, finding an employer to hire her has been tough.

“I just wanted to move forward in life but I didn’t get that,” she said. “I feel like I’m a victim.”

Then, last week, she received a letter from Strike Debt saying it had abolished one of her loans of $669. While this means she still owes more than $16,000 in federal and private loans, the letter was a nice surprise.

The money Strike Debt uses to buy debts comes from a pool of about $700,000 it has received through fundraising events over the past few years. Before starting on student loan debt, the group abolished more than $15 million worth of emergency room bills for thousands of people.

Because the group realizes that abolishing all of the country’s student loan and medical debt would be an impossible task, it is turning its attentions to a new platform called The Debt Collective as a way to bring debtors together so they can negotiate debts with creditors — or refuse to pay them entirely.

“Debt is the tie that binds the 99%, whether you are a student delinquent on your student loans or a parent struggling to pay healthcare bills,” Strike Debt member Ann Larson said in a statement. “Being forced into debt for basic social services is a systemic problem.”


Educational Financing For Students Pressed

MANILA, Philippines — The difficult and cash heavy tasks of educating the country’s youth can be made easier if the government, the private sector, and even banks could unite to extend educational loan financing products for students.

Kasangga Rep. Teodorico “Nonong” Haresco Jr. made his proposal in the wake of the controversies arising from the death of University of the Philippines-Manila freshman Kristel Tejada who committed suicide due to financial problems affecting his schooling.

Haresco, vice chairman of the House Committee on Small Business and Entrepreneurship Development, called for financial assistance products for students which could drastically reduce, if not wipe out, the number of college dropouts in the country.

“All sectors must band together to constantly work to truly realize the ideal that education must be a right and not a privilege. As such, our legislation should support bringing school fees to the level where the most people as possible can afford education,” Haresco said.

Now a candidate for the lone congressional district of Aklan, Haresco said these educational loan products can become part of company Corporate Social Responsibility Programs (CSR).

“Due to the limited number of scholarships made available by responsible individuals, government, and private sector companies, not everyone who needs one will necessarily get one. This may be a viable solution for equally deserving students,” he stated.

The administration solon said that ideally, these loans can be full or partial, must bear low interest rates, and long terms.

“It’s even possible for the loaning institution to engage the student-borrower for practicums, part-time work, or full employment, to ‘work off’ their arrears after graduation,” he said.

Terms of the educational loan may be in full or partial assistance, depending on the student’s need and capacity to pay, provided that they comply with the requirements such as maintaining a certain grade point average or rendering service in exchange of the loan.

“These are not a dole outs,” he clarified. “Rather they are contractual. As such they have the added benefit of teaching the youth the value of honoring their obligations and hard work.”

He added that this could be a “win-win” situation, where part of the loan requirements would be to maintain a certain grade level, and after graduation these deserving student-borrowers are assured of jobs.

Last year, Haresco filed House Resolution 2262, which requested appropriate House Committees to look into the requests of Schools, Colleges and Universities for tuition increases. Included in the inquiry would be a scrutiny into “unregulated” fee increases outside of tuition. The resolution has been accepted, pending approval with the Committee on Basic Education and Culture, Higher and Technical Education as of August 28, 2012.

The intent of the House resolution would be to look into how Higher education institutions justify and utilize these tuition fee hikes. “If it were found out that these increases were just a means to improve the institution’s return on investment for their stakeholders, then that would be an unnecessary, onerous, and socially unjust burden for parents and students to bear,” Haresco said.

He also hit the fact that 95 higher educational institutions had already filed with the Commission on Higher Education (CHEd) for tuition increases for the coming school year.

“When the rest of the country is lamenting the tragedy that happened to the Tejadas and seeking a proactive way to move forward, these requests for yet more tuition increases seems insensitive.”


Charter Closes on $750 Million Term Loan D and Refinances Revolving Credit Facility

ST. LOUIS, April 11, 2012 /PRNewswire/ — Charter Communications, Inc. (NASDAQ: CHTR – News) (along with its subsidiaries, the “Company” or “Charter”) today announced that on April 11, 2012, … […]

Online pawnshops start to click with customers

In a sputtering economy, cash-strapped consumers are flocking to a new way of getting quick, short-term loans: online pawn stores. […]

Home Loan Servicing Closes Down 3% Post-IPO

Shares of Home Loan Servicing Solutions Ltd. (HLSS), a company created by an Ocwen Financial Corp. (OCN) executive to buy up certain mortgage-related rights and liabilities from Ocwen, declined 3.1% on their first day of trading Wednesday. […]

Comprehension Levels in Speedy Payday Loans

What would any person manage, once one is stayed with a number of on the spot everyday expenditures at the end of the very thirty days? What would remain their own equipment to fulfill the very on the spot everyday. […]

Cash-strapped New York Mets recently took out $40 million loan

NEW YORK — The New York Mets’ owners recently got a $40 million loan to help with cash flow, a year after getting a $25 million loan from Major League Baseball. The recent loan came in the last six weeks from a major bank and was first reported by The New York Times on Monday. The Mets have been plagued by the Bernard Madoff Ponzi scheme and general manager Sandy Alderson has said the team lost … […]

Loan office owner fires shot at trio of robbers

Several robberies at a number of local loan service stores in the past month took a violent turn Wednesday afternoon when the owner of Tennessee Title Loans fired his handgun at three robbers who burst into his store demanding cash. […]