Aurelia Butler

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The settlement, approved by the Supreme Court last spring, resolved Sweet v. Cardona, a class-action lawsuit initiated against the Trump administration by student loan borrowers. The lawsuit was filed over delayed or rejected applications for the Borrower Defense to Repayment program. This program allows students to apply for loan forgiveness if they can prove their school engaged in deceptive practices.As part of the settlement, the Education Department committed to forgive $6 billion in student loans for over 200,000 applicants who attended an institution from an approved list of schools. Additional relief measures include refunds of past payments and corrections to damaged credit reports. The department also pledged to expedite processing for other borrowers applying for the Borrower Defense program.Since its implementation earlier this year, federal student loan debt discharge has been initiated for at least 128,000 class members, according to the Project on Predatory Student Lending, the legal group representing the borrowers.However, controversy arose when MOHELA, a major Education Department loan servicer, was accused by the Project on Predatory Student Lending of violating the terms of the Sweet v. Cardona settlement. MOHELA allegedly informed class members that they must resume loan repayments in October, contrary to the settlement agreement which states that approved borrowers should not be required to make payments while their loans are being discharged.The Project on Predatory Student Lending raised concerns about this issue in a letter sent to MOHELA, warning that legal action could be pursued if the collections efforts continued.This incident with MOHELA forms part of a wider issue as student loan payments resumed following the student loan pause last month. Over 40 million borrowers are now resuming repayment, amidst numerous reported problems including long call hold times and misinformation from loan servicers. The Consumer Financial Protection Bureau, a federal agency overseeing the financial services sector, has warned student loan servicers that it is monitoring the situation closely.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

SINGAPORE (Reuters) – The yen was held at the mercy of soaring U.S. Treasury yields on Friday ahead of a closely watched rate decision by the Bank of Japan (BOJ), while the dollar stood near a six-month peak on the prospect of higher-for-longer U.S. rates.The Japanese currency was last marginally lower at 147.6 in early Asia trade, languishing near the previous session’s more than 10-month low of 148.465.The BOJ is due to announce its interest rate decision later on Friday at the conclusion of its two-day policy meeting, capping off a week packed with central bank policy decisions, and expectations are for the BOJ to stand pat on its ultra-easy monetary settings.”Whilst we feel more confident that (the BOJ) can achieve their 2% (inflation) target, we believe there won’t be any changes until 2024, with key focus the Shunto (spring wage) negotiations starting next year,” said Daniel Hurley, portfolio specialist for emerging market and Japanese equities strategy at T. Rowe Price.Data on Friday showed Japan’s core inflation was steady in August and stayed above the central bank’s 2% target for a 17th straight month.The yen was also kept under pressure as a result of elevated U.S. Treasury yields, which scaled multi-year highs in the previous session as markets reeled from a hawkish pause by the Federal Reserve on Wednesday.The 10-year Treasury yield, which the dollar/yen pair tends to track, peaked at 4.4980% on Thursday, its highest since 2007, while the two-year Treasury yield scaled a 17-year top of 5.2020% the same day. [US/]The U.S. dollar likewise rode Treasury yields higher and against a basket of currencies, the greenback touched a more than six-month high of 105.74 in the previous session. The index was last steady at 105.39.Against a stronger dollar, the Aussie fell 0.1% to $0.6410 and was headed for a weekly loss of about 0.3%, reversing some of its gains made last week.The New Zealand dollar similarly slipped 0.06% to $0.5928, though eyed a weekly gain of close to 0.5%.While the Fed kept interest rates steady this week, it signalled the possibility of another hike this year, with rates to be kept significantly tighter through 2024 than previously expected.”We like the U.S. dollar given this backdrop,” said Ray Sharma-Ong, investment director of multi-asset solutions at abrdn.”The U.S. dollar will do well, supported by the hawkishness of the Fed, the reduction in the expected number of rate cuts the Fed will deliver in 2024, U.S. growth resiliency and our expectations of slower growth in the Euro area relative to the U.S.”The euro dipped 0.07% to $1.0655, having fallen to a six-month low of $1.0617 in the previous session.Sterling was meanwhile 0.02% lower at $1.2293, having similarly slid to a roughly six-month low of $1.22305 on Thursday, after the Bank of England (BoE) halted its long run of interest rate increases a day after Britain’s fast pace of price growth unexpectedly slowed.That marked the first time since December 2021 that the BoE did not increase borrowing costs and left traders scaling back their expectations of further rate increases by the central bank.”With inflation seemingly falling but still very elevated, and with growth almost stagnant, markets were likely going to find any decision fell short of what was needed, unless the bank was decisive in its hawkish stance, delivering a hike and guaranteeing more to come,” said Daniela Hathorn, senior market analyst at Capital.com. More

The ECB raised its deposit rate to a record high 4% last week to combat excessive inflation but an exceptionally tight labour market has kept upward pressure on wages, raising the upside risk on consumer prices.While far from declaring victory over inflation, Lane argued there were tentative signs that wage pressures may be softening, potentially easing fears of some conservative policymakers who are keeping further rate hikes on the table.”The contribution of unit profits to annual inflation in the first half of 2023 has moderated relative to its contribution in 2022, suggesting that the rising wage pressures are starting to be absorbed by firms,” Lane said in a speech in New York.”Price hikes coming in below the increase in unit labour costs are projected to contribute further to the required disinflation during 2024,” he told the Money Marketeers of New York University.While jobless rates are holding at record lows, a paradox for some given surging borrowing costs and a stagnant economy, Lane said a change may be underway.”The labour market has so far remained resilient despite the slowing economy but shows signs of losing momentum,” he said.Although Lane repeated the bank’s standard guidance which does not rule out a further hike, he added that a “range of model-based simulations” done by the ECB suggest the bank has done enough.While markets price no further rate hikes from the ECB and expect a cut early next summer, conservative policymakers were out in force on Thursday to argue that another hike was still a possibility.Not taking a side in this debate, Lane said uncertainty was exceptionally high and it could be well into 2024 before the ECB has the necessary visibility over wage trends, a prerequisite in determining if inflation was heading back to target.Euro zone inflation was at 5.2% in August, well above the ECB’s 2% target. The bank projects inflation holding above 3% next year and sees it below 2% only in the final quarter of 2025.In response to audience questions, Lane noted high levels of inflation are a very negative force for an economy, while he declined to speculate what lies next for his bank’s monetary policy.”Inflation is horrible, it’s really costly, people hate it,” Lane said. He said the ECB’s objective is to hit its 2% target in the medium term.Lane’s comment echoed that of Federal Reserve Chairman Jerome Powell, who said Wednesday after a meeting where the central bank held its short-term interest rate target steady, that when it comes to price pressures, “people hate inflation, hate it. And that causes people to say the economy is terrible” even when they are continuing to spend money.Lane wouldn’t say what’s next for ECB policy but he said changes in interest rates are the most “efficient” way to affect the economy relative to balance sheet actions. More