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Where Does Biden’s Student Loan Debt Plan Stand? Here’s What to Know.

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The Supreme Court refused to allow a key part of President Biden’s student debt plan to move forward. Here’s what’s left of it, and who could still benefit.President Biden’s latest effort to wipe out student loan debt for millions of Americans is in jeopardy.The Supreme Court on Wednesday refused to allow a key component of the policy, known as the SAVE plan, to move forward after an emergency application by the Biden administration.Until Republican-led states sued to block the plan over the summer, SAVE had been the main way for borrowers to apply for loan forgiveness. The program allowed people to make payments based on income and family size; some borrowers ended up having their remaining debt canceled altogether.Other elements of Mr. Biden’s loan forgiveness plan remain in effect for now. And over the course of Mr. Biden’s presidency, his administration has canceled about $167 billion in loans for 4.75 million people, or roughly one in 10 federal loan holders.But Wednesday’s decision leaves millions of Americans in limbo.Here is a look at what the ruling means for borrowers and what happens next:Who was eligible for SAVE?Most people with federal undergraduate or graduate loans could apply for forgiveness under SAVE, which stands for Saving on a Valuable Education.But the amount of relief it provided varied depending on factors such as income and family size. More than eight million people enrolled in the program during the roughly 10 months that it was available, and about 400,000 of them got some amount of debt canceled.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    No, Diversity Did Not Cause Silicon Valley Bank’s Collapse

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    Blaming workplace diversity or environmentally and socially conscious investments for the firm’s downfall signals a “complete lack of understanding of how banks work,” one expert said.WASHINGTON — A growing chorus of conservative pundits and politicians have said the failure of Silicon Valley Bank was the result of the bank’s “woke” policies, blaming the California lender’s commitments to workplace diversity and environmentally and socially conscious investments.These claims are without merit. The bank’s collapse was due to financial missteps and a bank run.Moreover, the firm’s policy on diversity, equity and inclusion — also known as D.E.I. — is similar to ones that have been broadly adopted in the banking sector. So is its approach to taking environmental and social considerations into account when investing — referred to as E.S.G. — although that has become a target of conservatives.In fact, Silicon Valley Bank is considered about average in the industry when it comes to these issues.Here’s a fact check.What Was Said“They were one of the most woke banks in their quest for the E.S.G.-type policy in investing.”— Representative James R. Comer, Republican of Kentucky, in an appearance on Fox News on Sunday“This bank, they’re so concerned with D.E.I. and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission.” — Gov. Ron DeSantis of Florida on Fox News on SundayThis lacks evidence. First, experts have broadly agreed that the bank’s demise had little to do with “wokeness.” As The New York Times and others have explained, the collapse was due to a bank run precipitated by a decline in start-up funding, rising interest rates and the firm’s sale of government bonds at a huge loss to raise capital.The bank’s loans to environmental and community projects “were not an important factor behind the collapse of SVB,” said Itay Goldstein, a finance professor at the University of Pennsylvania’s Wharton School. “There is no immediate indication that these loans precipitated the run by investors.”Silicon Valley Bank also was not an outlier in its diversity goals or its E.S.G. investments. U.S. investments in those assets are expected to rise to $33.9 trillion by 2026. A 2022 report by the Consumer Financial Protection Bureau found that 59 percent of banks had lending programs specifically for women- and minority-owned businesses, financing that would fit under the “social” umbrella of E.S.G.George Serafeim, a professor at Harvard Business School, said that blaming the collapse on such initiatives reflected either “a complete lack of understanding of how banks work or the intentional misattribution of causality for the bank’s failure.”Maretno Harjoto, a professor of finance at Pepperdine University and expert in E.S.G. investing, agreed that “there is no truth” to the claims. He added that banks will often set E.S.G. and diversity goals due to pressure from investors and stakeholders.Silicon Valley Bank said in a recent report that it would invest about $16.2 billion over the next few years to finance small businesses and community development projects, affordable housing and renewable energy. That level of investment was equivalent to about 8 percent of its $209 billion in assets.But Silicon Valley Bank was hardly alone in pursuing these types of investments. Of the 30 largest banks in the United States — Silicon Valley Bank ranked No. 16 — all but one (First Citizens Bank) have made E.S.G. investments and released reports on them. And the three largest U.S. banks — JPMorgan Chase & Company, Bank of America and Citigroup — all dedicated 8 percent to 14 percent of their overall assets toward social and environmental investments in 2021. All three have committed to at least $1 trillion in sustainable investments by 2030.Among all banking institutions, Silicon Valley Bank actually ranked about average on E.S.G. issues, according to three metrics developed separately by the financial research firms MSCI, Morningstar and Refinitiv. Among the 30 top banks, its middling A rating from MSCI put it on par with 11 banks, while 11 others received the higher AA rating, characterizing them as leaders. The California lender’s score from Morningstar was among the worst of all 30 banks. And its Refinitiv score was worse than all but one financial institution and on par with Signature Bank, which failed this week.Silicon Valley Bank’s commitment to improving diversity among its leadership was fairly typical as well. The largest 30 banks in the United States all have a stated commitment to more inclusive career advancement.The bank’s latest inclusion report noted that 38 percent of senior leadership and 42 percent of its board members were women, and that 30 percent of leadership and 8 percent of its board were nonwhite.By these demographics, Silicon Valley Bank was one of the more racially diverse financial institutions, but not extraordinarily so. Analyses have found that about 19 percent of senior leadership in financial services were nonwhite and 30 percent were women.While The Times was unable to find data on the demographics of boards of directors in the finance sector overall, the boards of the eight banks in the United States considered systemically important were more racially diverse on average than Silicon Valley Bank. Of the 104 board members who govern these banks, 23 percent were members of a racial or ethnic minority and 39 percent were women. More

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    A Year After Ending Her Presidential Bid, Warren Wields Soft Power in Washington

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    The progressive Democrat’s proposals for taxing the rich will take center stage as talks on paying for an infrastructure bill ramp up.WASHINGTON — At Adewale Adeyemo’s confirmation hearing last month, Senator Elizabeth Warren pressed the deputy Treasury secretary nominee to commit to using the department’s regulatory powers to scrutinize the private equity industry, which she said posed a risk to low-income communities when buyout firms strip companies of assets, load them with debt and fire workers.Ms. Warren, a progressive Democrat from Massachusetts, has been a mentor to Mr. Adeyemo, who served as her chief of staff when she was establishing the Consumer Financial Protection Bureau a decade ago. But when he gave a noncommittal answer, she did not let him off the hook.“I don’t think you should waver about this,” Ms. Warren said emphatically. “Treasury should not be a bystander in this.”The exchange underscored Ms. Warren’s role in the new Washington, where the Biden administration and congressional Democrats control the levers of power. A year after ending her own presidential bid, and with her aspirations of becoming Treasury secretary unfulfilled, Ms. Warren now wields influence in her own way. She has shepherded a pipeline of progressive former staff members into powerful jobs across the government, and she releases a steady stream of legislative proposals that have kept her progressive ideas at the forefront of the policy conversation.Two months into the Biden presidency, it is not yet clear how much Ms. Warren’s sway will yield in terms of policy results. But many of her ideas for raising trillions of dollars of revenue by taxing the wealthy and big corporations will soon take center stage as the Biden administration and Congress consider ways to pay for the multitrillion-dollar infrastructure plan that they hope to pass this year.Marcus Stanley, the policy director of Americans for Financial Reform, an advocacy group, said the upcoming infrastructure and jobs legislation would be a real test of Ms. Warren’s influence.“We probably have a big bill coming up in the next couple of months, so when you talk about winning the policy fights, we’re going to see there,” Mr. Stanley said.If personnel is policy, as Ms. Warren likes to say, then she is winning so far. Many of the top officials and senior staff members at the nation’s most powerful economic policymaking and regulatory agencies are ideological allies who have been groomed by Ms. Warren.In addition to Mr. Adeyemo at the Treasury Department, Ms. Warren has worked closely in the past with Bharat Ramamurti, the deputy director of the National Economic Council, and Rohit Chopra, President Biden’s nominee to lead the Consumer Financial Protection Bureau.The impact of the hires can be seen in the progressive tilt of the $1.9 trillion economic relief law, which dismissed concerns about deficits and focused heavily on poverty reduction. Ms. Warren and her allies hope that having strong advocates for progressive views within the administration will help those ideas find purchase in a White House that thus far has been more open to tacking to the left than previous Democratic administrations.But it remains to be seen how far the Biden White House is willing to go, particularly with regard to tax increases, which is an area where the two former candidates disagreed.Although she has been off the campaign trail for more than a year, Ms. Warren has been reviving proposals that she promoted in Iowa and New Hampshire.This month, Ms. Warren and two House Democrats introduced legislation for an “ultra-millionaire tax” that is modeled after what she proposed as a candidate. The 2 percent annual wealth tax on the net worth of households and trusts valued at $50 million to $1 billion was unveiled with polling data to back up its popularity and letters supporting its constitutionality.This week, Ms. Warren plans to pitch new legislation to increase taxes on big companies. Her “real corporate income tax,” which was also part of her campaign platform, would require the most profitable companies to pay a 7 percent tax on their annual book value — the earnings that they report to their investors but not the Internal Revenue Service — above $100 million. The idea, which is similar to a proposal that Mr. Biden put forward during his campaign, is intended to stop companies from using accounting loopholes to lower their tax bills.When it appeared that Democrats were likely to lose the Senate after the 2020 election, some industry groups were relieved that Ms. Warren would not become the Treasury secretary. These days, however, they acknowledge that they are watching her moves closely.“Senator Warren is certainly well positioned to have an outsized influence in the Senate and the administration,” said James Maloney, a managing partner of Tiger Hill Partners, a public affairs firm focused on financial services. “Every item that she’s focused on should be a focus area for the industries whose policies can potentially be impacted.”Mr. Maloney, whose firm represents some private equity companies, noted that allies of Ms. Warren were spread across the Biden administration. He said businesses were closely watching the letters that Ms. Warren sends to regulatory agencies and the responses she receives.Mr. Biden has so far not been persuaded by her argument for using executive authority to waive student debt. And the White House has given mixed signals on Ms. Warren’s wealth tax.Treasury Secretary Janet L. Yellen, whose nomination Ms. Warren supported, has expressed skepticism about the feasibility of putting a wealth tax in place. Ms. Yellen’s recent hiring of Natasha Sarin, a protégé of Lawrence H. Summers who has been skeptical about how much revenue a wealth tax would generate, to join her economic policy team raised eyebrows among some in Ms. Warren’s orbit.In an interview, Ms. Warren said she was heartened by the early returns of the Biden era after four years of President Donald J. Trump’s deregulation and tax cuts.“People like progressive ideas and want to see them enacted,” Ms. Warren said. “That’s going to happen. Washington is beginning to catch up.”She said she planned to have a private conversation with Ms. Yellen about how to establish the tax.During the 2020 primary campaign, Ms. Warren and President Biden appeared to be at opposite ends of the Democratic Party’s ideological spectrum.Chang W. Lee/The New York Times“If that’s her biggest problem then we’re good,” Ms. Warren said. “It’s easy to implement. We just need to sit down and talk about it.”Ms. Warren acknowledged that helping to seed federal agencies with progressives was part of her strategy of making her policies happen. She said she made her staffing recommendations to the White House privately and repeated her refrain that “personnel is policy.”During the 2020 primary campaign, Ms. Warren and Mr. Biden appeared to be at opposite ends of the Democratic Party’s ideological spectrum. But their shared interest in uplifting the middle class and reducing income inequality has helped forge a strong working relationship.Jeff Hauser, the director of the Revolving Door Project, suggested that Ms. Warren’s ties to former Senator Ted Kaufman, Mr. Biden’s longtime Senate chief of staff who led his presidential transition team, had helped her steer many of her acolytes to important jobs. In 2008, when Ms. Warren was a Harvard Law School professor, she was appointed to join a congressional panel that was overseeing the $700 billion Troubled Asset Relief Program. When she left that job to stand up the consumer protection bureau, Mr. Kaufman replaced her and continued her rigorous oversight work.Allies of Ms. Warren say she is playing the long game with policy proposals such as the wealth tax, nudging them from European fringe ideas to the political mainstream in hopes that Democrats will have the votes to pass such legislation sooner rather than later.“She’s doing what she always does, which is going person by person in the Senate, person by person in the administration, explaining policy advantages, explaining the political advantages, making the case,” said Mike Lux, a Democratic political strategist and a friend of Ms. Warren’s.In the meantime, Ms. Warren feels a sense of relief after four years of being on defense. On the day she voted to advance Mr. Chopra’s nomination to lead the consumer bureau, she reflected on how different his tenure would be from that of Mick Mulvaney, whom Mr. Trump appointed to neuter the agency in 2017.Mr. Chopra helped Ms. Warren establish the bureau and worked for five years as its assistant director and student loan ombudsman. Mr. Mulvaney tried to cut its funding and scrambled its acronym out of spite.“Mick Mulvaney was doing everything he could to try to undercut the consumer agency, and he made no secret about that,” Ms. Warren said. “Now there’s someone who will be in charge of the C.F.P.B. who sees the need for a level playing field and a fair set of rules and who has the backbone to get in there and make it happen.” More