Business
Commentary: Forget tariffs — GOP proposals on student loans will crack the economy
While economists and the general public are preoccupied with the threat to U.S. economic growth stemming from Donald Trump’s tariff policies, serious as that is, they may be overlooking another serious threat.
This one comes from Trump’s approach, abetted by Republicans in Congress, to the student loan crisis.
It’s not a trivial matter. Nearly 43 million Americans owe a combined $1.6 trillion in student debt, according to figures from the U.S. Department of Education. Efforts to relieve borrowers of this weight invariably proposed by Democrats have been stymied by conservatives on Capitol Hill and federal courts.
“Instead of helping the 5 million borrowers that have fallen into default and the millions more that are behind and now at risk of default later this year, this Administration appears set on inflicting massive economic harm on millions of Americans.
— Aissa Canchola Bañez, Student Borrower Protection Center
Now things look worse. There’s no longer any talk in Congress of student loan relief. It’s been supplanted by partisan efforts to increase the burden, by raising the costs of student loans and closing off paths for struggling borrowers to manage their payments.
“Instead of helping the 5 million borrowers that have fallen into default and the millions more that are behind and now at risk of default later this year, this Administration appears set on inflicting massive economic harm on millions of Americans—a decision that will further drag down an already struggling economy,” Aissa Canchola Bañez, policy director for the Student Borrower Protection Center, said recently.
The damage wreaked by Trump policies on student loans is already showing up in economic statistics. According to a report by the Federal Reserve Bank of New York, about 9.7 million student loan borrowers have seen their credit scores plummet since late last year, when delinquencies and defaults on those loans began to be listed on credit reports.
Many borrowers who enjoyed superprime credit scores (760 or higher on scales that typically top out at 850) could see their scores decline to subprime levels below 620. For those borrowers, the results could include “reduced credit limits, higher interest rates for new loans, and overall lower credit access,” the N.Y. Fed reported.
The credit score declines resulting from the resumption of college loan payments was a factor in a sharp increase in the rejection rate for mortgage refinancings, to nearly 42% in February from 26.7% a year earlier, to 14% on car loans from 1.5% a year earlier, and to 22% on credit card applications from 16.6% over the same period.
The consequences could be even broader. Many landlords check credit scores to judge potential tenants, those with low scores might be turned away. Fewer mortgage refinancings, auto purchases, and less credit generally are all drags on the economy.
It’s true that payments on student loans resumed during the Biden administration. Payments were suspended on federal student loans and and interest rates temporarily set at 0% during the pandemic emergency, beginning March 13, 2020. The pause ended as of October 2023, but the Biden administration provided a one-year “on-ramp” during which missed or delayed payments wouldn’t show up in borrowers’ credit reports. That ended early this year, triggering the credit score crash for borrowers in arrears or default.
Biden’s efforts to relieve the burden on millions of student borrowers were stymied by federal court rulings in lawsuits brought by conservative activists. More recently, the Trump administration has proceeded to tighten the screws on borrowers.
Student loan delinquencies (red line) have risen stratospherically since a pandemic-era suspension of payments ended last year.
(Federal Reserve Bank of New York)
On April 21, Education Secretary Linda McMahon announced that defaulted loans would be put in collection, subjecting the borrowers to having their wages garnished and their federal tax refunds and even Social Security benefits seized to make the payments. (Responding to a public uproar, the administration backed away from plans to take Social Security benefits from an estimated 450,000 defaulting borrowers aged 62 and older who are receiving Social Security.)
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said.
Pressure on households struggling to afford higher education will be intensified by provisions in the budget bill passed narrowly on May 22 by the GOP majority in the House. The measure, which is pending before the GOP-majority Senate, takes several whacks at student aid and consequently the accessibility of higher education.
Among its provisions are these:
— A change in the calculation of permissible student loans. Under current law, the figure is based on the cost of the program a student is attending. The proposal would peg loans to the median cost of all similar programs. That would leave students at higher-priced universities (such as private institutions) without the ability to access federal loans for the full cost of their education.
As it happens, no system currently exists for determining the median prices. At the Department of Education’s office that would make the calculation, almost all the employees have been fired.
— The bill eliminates direct subsidized student loans for undergraduates, which don’t accrue interest while the borrower is in school.
— The bill raises the maximum in federal loans that a student can take out to $50,000, up from the current $31,000. But the current limit includes up to $23,000 in subsidized loans. Since those would no longer exist, the full amount would be in costlier unsubsidized loans. The Student Loan Protection Center calculates that the average borrower who takes out the maximum annual loan amount would pay nearly $2,900 more in interest over the current amount.
— The GOP would eliminate the SAVE plan, which was implemented by the Biden administration but blocked by a federal appeals court ruling in a lawsuit brought by red states. The SAVE plan required enrollees to pay 5% of their discretionary income annually, with unpaid balances forgiven after 20 years (25 years for those with graduate loans). Those with original loans of $12,000 or less would have their balances forgiven after 10 years. Elimination of the plan would affect about 8 million student borrowers.
— The GOP would scrap rules allowing borrowers to temporarily defer payments due to unemployment or economic hardship and limits. It also places new limits on forbearance — a temporary pause on loan payments — which states loans can’t be in forbearance for more than 9 months during any 24-month period.
For all that Republicans crow about removing the burden on taxpayers from the student loan crisis, the real beneficiary of these changes would be the private student loan industry, such as banks and private equity firms, which long have hankered after the opportunities created by student loans. With fewer options available from federal programs, student borrowers would increasingly be thrust into the welcoming arms of Wall Street.
That’s a problem for student borrowers, because the private lending industry has a wretched history, rife with deceptive practices. Private lenders were the subject of more than 40% of student loan-related complaints to the Consumer Financial Protection Bureau since 2011, even though they accounted for only 8% of outstanding loans. Private loans, moreover, lack some of the consumer protections traditionally provided by government loans, including deferrals, and typically carry higher interest rates.
With their actions and proposals, McMahon and the GOP lawmakers have underscored the majestic hypocrisy of the student debt debate. Among the most common arguments against relief is that canceling existing debt would be unfair to all those who already paid off their loans. As I’ve explained in the past, this is the argument from pure selfishness and a formula for permanent governmental paralysis.
In a healthy society government policy moves ahead by taking note of existing inequities and striving to address them. Following the implications of the “I paid, why shouldn’t you” camp to their natural conclusion means that we wouldn’t have Social Security, Medicare or the Affordable Care Act today.
Among the most common claims is that debt relief would disproportionately benefit wealthy families; in fact, low-income households would benefit the most, the Roosevelt Institute has shown.
As I pointed out last year, among the Republicans who weighed in with tendentious lectures about meeting one’s obligation to pay back a loan were members of Congress who had taken out loans of hundreds of thousands of dollars each from the pandemic-era Paycheck Protection Program — and had them completely forgiven.
The GOP’s lame defense was that the PPP loans were not expected to be repaid, if they were used to keep the borrowers’ workers employed during the pandemic. Couple of problems with that: Days before Biden took office, the Small Business Administration deleted almost all the database red flags designating potentially questionable or fraudulent loans subject to further review. The red flags included signs that a recipient company had laid off workers or were ineligible to participate in the program.
As many as 2.3 million loans, including 54,000 loans of more than $1 million each, thus may have received a free pass.
Then there’s the questionable ethics of elected officials taking massive advantage of a program they themselves enacted. They could have made themselves ineligible, but where’s the fun in that?
I observed separately that many congressional critics of loan relief had themselves received their college, graduate and professional educations as gifts from the taxpayers: They had attended public (i.e., taxpayer-supported) state universities, typically in an era when tuition for state residents was much lower than today, even accounting for inflation.
Among those who were apparently educated on the taxpayers’ dimes is Secretary McMahon, a North Carolina native who holds a degree from East Carolina University, a public institution supported by the taxpayers of North Carolina. I asked McMahon’s office to reconcile her statement on student loans with her education at a public university, but received no reply.
The threat to the economy is real and immediate. Households burdened with student debt tend to delay or forgo homeownership and face difficulties in starting a family or building up savings. Eradicating student debt, or even materially reducing its burden, would produce a significant economic stimulus. But who in the White House or on Capitol Hill is even listening?
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
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