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National

Americans who had expected sizable chunks of their student debt to be wiped out under President Biden's student debt relief plan are now recalculating what their futures may look like. 

Driving the news: Borrowers who would be eligible for relief through Biden's plan won't know for at least a few months whether as much as $20,000 in their student debt will be forgiven — or still owed — as the Supreme Court decides on its constitutionality. 

"I feel a bit anxious ... because depending on which way the pendulum swings, [it] could mean being able to pay off my debt in five years or maybe even paying it off in 10," Ryan Rudolph, 29, a Pell Grant recipient and a Duke University master's student based in Chapel Hill, North Carolina, told Axios.

He added that he's "saving as much as possible" so he can "weather the storm if the plan is struck down."

Borrowers who would qualify for relief say the plan would give them the leeway to make big financial moves they've been putting off, like buying a house or starting a family.

Shanna Hayes, 34, who is currently unemployed and based in Alexandria, Virginia, said that if Biden's plan went through, she likely could co-own a home with her wife in coming years.

The first home they bought, which has been since sold, was only in Hayes's wife's name because of her student loan balance, she said.

"It's not fun understanding your financial future, ... hanging in the balance and not knowing, having to deal with that uncertainty," said Rudolph. 

"I'm looking to be able to fully participate in this economy, I want to be financially solvent, so it just puts a further pause on the life plans that I'm looking to do," he added.

The court's conservative justices seemed deeply skeptical of the plan during oral arguments last week. 

"We're kind of expecting the worst and kind of hoping for the best in terms of what can potentially come out of that decision," said Hayes. 

The conservative justices, with a 6-3 majority in the court, during arguments on two legal challenges to the plan cast doubt on Biden's legal authority to offer the relief without congressional authorization.

The program, announced in August, would cancel up to $20,000 in student debt for Pell Grant recipients and up to $10,000 for individual borrowers who make under $125,000 per year.

Biden's program has been on hold since November, when a Texas judge struck it down.

State of play: In addition to the uncertain legal future of the plan, it has become a political flashpoint since Biden first announced it, with Republicans characterizing it as a "bailout for the wealthy."

"While hardworking families struggle with soaring costs, Biden is giving a handout to the rich, and voters see right through this desperate vote grab,"  RNC chair Ronna McDaniel said in a statement.

Two borrowers, backed by the conservative Job Creators Network, sued over the plan, accusing the administration of not seeking public input on the program.

One of the borrowers in the suit, Myra Brown, who is not eligible for relief under Biden's plan, believes it is "irrational, arbitrary and unfair to exclude her from the program because her federal student loans are commercially held and not in default," per the complaint. 

The other borrower, Alexander Taylor, believes it is "irrational, arbitrary, and unfair to calculate the amount of debt forgiveness he receives based on the financial circumstances of his parents many years ago." 

The plan is Biden's latest attempt to address the rising costs of higher education, an issue the Democrat first proposed on the campaign trail, Axios' Eugene Scott reports. 

The bottom line: While millions of eligible borrowers have been in limbo since the fall, the pendulum is still swinging — and the stakes can be consequential.

Go deeper... Where Biden's student loan forgiveness got the most interest

Where Biden's student loan forgiveness got the most interest

Debt relief limbo leaves borrowers on edge over financial future

"It's not fun having [an] understanding of your financial future, basically hanging in the balance."

Student loan borrowers and advocates gather for the People's Rally To Cancel Student Debt on Feb. 28 in Washington, D.C. Photo: Jemal Countess/Getty Images for People's Rally to Cancel Student Debt 

Biden administration

Politics & Policy

Washington D.C.

Axios D.C.

The D.C. Council bowed to bipartisan pressure on Monday by attempting to withdraw sweeping changes to the city's criminal code that the Senate appears on track to block later this week.

Why it matters: The local legislation, which reduced maximum penalties for some violent crimes, sparked a national debate on crime and led many Democrats to side with Republicans in spite of their party’s support for D.C. home rule.

It has led to a showdown between D.C. and Congress that could result in federal lawmakers blocking a local law for the first instance since 1991.

Driving the news: D.C. Council Chair Phil Mendelson sent a last-ditch letter aiming to withdraw the bill on Monday morning. Two Senate leadership aides said later the vote is still expected to occur. 

One aide told Axios that the Home Rule Act does not allow for such a withdrawal and that the Senate vote is contingent on a House-passed resolution, not the D.C. council’s transmission.

Sen. Bill Hagerty (R-Tenn.), who introduced the Senate resolution overturning the reforms, called Mendelson's stated withdrawal a “made-up maneuver."

D.C. Del. Eleanor Holmes Norton expects the Senate vote to still occur, her spokesperson Sharon Eliza Nichols said, downplaying Mendelson's claims of authority to withdraw a bill once it has been submitted to Congress.

What's happening: Mendelson's backtrack came after President Biden announced he wouldn't veto the GOP-led resolution, handing House Republicans a win and providing cover to vulnerable Senate Democrats.

What they're saying: "It will be a hollow vote" if Congress moves ahead on the overturn, Mendelson told reporters earlier Monday. He admitted he couldn't find a precedent for a D.C. bill being withdrawn from Congress during its required review period. 

"I don't know exactly what to expect," said Mendelson, on how the Senate will react to his move.

He indicated council members will ultimately make adjustments to the reform package before resubmitting to Congress.

Between the lines: Mendelson said Biden's announcement last week that he wouldn’t veto the resolution probably meant more Democratic senators would join in support.

The resolution has been expected to get substantial bipartisan support in the Senate.

That could further enrage House Democrats, who were already incensed that Biden waited until after the House voted on the resolution to announce that he wouldn’t veto it.

Editor's note: This story has been updated with additional developments and background.

announced he wouldn't veto the GOP-led resolution

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D.C. declares early defeat on crime reforms ahead of Senate vote

The proposal has set off a national debate about crime.

D.C. Council Chair Phil Mendelson. Photo: Matt McClain/The Washington Post via Getty Images

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What explains this year's pop in consumer spending? Boomers might be at least partially to blame.

The big picture: Social security recipients (of which retirees make up an overwhelming share) received an 8.7% cost-of-living adjustment this year — the single-largest increase in more than four decades. That is helping support spending, according to new research from Bank of America Institute.

Driving the news: The bank's card spending data shows faster spending growth this year among households more likely to receive those payments, relative to those that don't. 

In a new report, BofA economists found that as of mid-February, baby boomers and the preceding generation saw total card spending per household jump by 4% and 6% year-over-year, respectively. That compares to just 2% for all age groups.

The big picture: In aggregate, BofA found total card spending per household rose 5.1% year-over-year in January — compared to 2.2% in December. Early February figures show cooler spending activity.

Between the lines: Over the pandemic, spending among older generations — including consumers in that cohort on a fixed income — lagged relative to younger ones. Their incomes were disproportionately boosted by pandemic-era stimulus checks or tax credits.

Now, that is unwinding: Those income-boosting effects have faded, and spending has slowed for younger generations.

Some older consumers may be making purchases now that they put off in recent years. Spending on services is rising at a faster pace for them compared to the generational average, "perhaps reflecting their pent-up desire to enjoy travel and leisure activities," BofA says.

The intrigue: The cost-of-living adjustment was set based on an annualized measure of how hot inflation was running in Q3 2022. Inflation, while still high, has come down notably since then.

'This means that, in effect, the rise in social security benefits will have a little more spending power than if the inflation rate had not declined," the economists note.

The Boomer spending boost

Bank of America data shows faster spending growth this year among households more likely to receive social security payments.

Shoppers at Disney Springs in Lake Buena Vista, Florida. After almost 60 years of Disney's corporate oversight, Florida Gov. Ron DeSantis is expected to soon sign a bill giving himself and future governors control over the board overseeing local functions for the entertainment giant's parks. Photographer: Brian Carlson/Bloomberg via Getty Images

Inflation

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Under pressure from animal rights activists, HelloFresh will stop selling coconut milk sourced from Thailand in its meal kits in the coming months over monkey labor allegations, the company confirmed to Axios.

Driving the news: Major retailers, including Walmart, Costco, Target and Kroger, have already stopped carrying coconut milk from certain Thai suppliers accused of using monkeys for forced labor, but HelloFresh is taking it a step further by saying it won’t source any coconut milk from Thailand.

Officials with the People for the Ethical Treatment of Animals (PETA) exclusively told Axios of HelloFresh’s decision, which followed the organization’s supporters sending nearly 100,000 emails pushing for the change.

The Germany-based meal delivery service said it would “cease purchasing and seek new suppliers” by this summer.

“We do not tolerate any form of animal abuse in our supply chain,” HelloFresh said in a statement to Axios. “Out of an abundance of caution we will not be placing orders for coconut milk from Thailand.”

The big picture: Thailand had approximately 80% of the market share for coconut milk in the U.S. and exported nearly 78,000 tons in 2020, according to 2020 export data provided by the Office of Agricultural Affairs at the Royal Thai Embassy in Washington, D.C.

Context: Since 2019, when PETA started investigating the alleged animal exploitation, it has been pushing retailers and brands to stop selling coconut milk allegedly made with coconuts harvested by monkeys. The monkeys have been kidnapped, chained and whipped, PETA has found and documented.

PETA Asia released the results of its third investigation in November and found the use of monkeys is “rampant,” Laura Shields, PETA’s director of corporate responsibility, said in an interview with Axios.

“Now the push is to just stop sourcing from Thailand entirely and source from other places that produce coconut milk without the use of monkeys, like the Dominican Republic, India, Sri Lanka, Vietnam, the Philippines,” Shields said.

Meanwhile, the Royal Thai Embassy in D.C. confirmed efforts being made by the Department of Agriculture, Ministry of Agriculture and Cooperatives of Thailand, including a new “Monkey Free Plus" program announced in December.

A December 2022 news release said a meeting was held during the world coconut forum “to signify that all the coconut processes are animal- cruelty-free (monkeys) and traceable throughout the production.” The release said the measures were “to prevent the use of monkey labor in coconut production for export.”

“Both the Thai government and the industry are making sure that coconut milk exported from Thailand is not obtained from the use of monkey labor,” the embassy said in a statement to Axios.

“It is difficult to say if the impact of coconut milk imports from Thailand into the US, if ever decreased, was actually caused by the monkey issue,” the embassy’s statement said in response to Axios’ question about whether there was an impact from major retailers not purchasing coconut milk from select Thai suppliers.

The Ministry of Foreign Affairs of the Kingdom of Thailand has a video on its government Facebook page from September 2020 with a chained monkey picking coconuts.

What’s next: PETA is talking to retailers to encourage them to stop using all coconut milk from Thailand like HelloFresh.

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Scoop: HelloFresh drops coconut milk from Thailand over monkey labor allegations

Under pressure from PETA, HelloFresh will stop selling coconut milk sourced from Thailand in its meal kits.

HelloFresh will soon drop Thai coconut milk. Photo: Smith Collection/Gado/Getty Images

Axios

Monday's top stories

Debt relief limbo leaves borrowers on edge over financial future

D.C. declares early defeat on crime reforms ahead of Senate vote

The Boomer spending boost

Scoop: HelloFresh drops coconut milk from Thailand over monkey labor allegations

The generative AI arms race is just starting

When it comes to office buildings, it's survival of the fanciest

As cyber attacks on health care soar, so does the cost of cyber insurance

Tech platforms struggle to verify their users' age

The $1 billion push to remove highways dividing communities

35 arrested after clashes at Atlanta police training center site

DeSantis gives speech in California 1 year out from state GOP primary

Over 190 countries reach historic deal to protect oceans