Jumpstart your week: Student loan debt, Trump's AI-generated portrait, Met Gala red carpet, upcoming papal election, and Cinco de Mayo celebrations.
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Spotlight
Heads up, students who have fallen behind on their federal student loan payments - collections are about to restart starting Monday, May 5th, ending an almost five-year pause due to the pandemic. Over 5 million borrowers are currently in default, meaning they have missed payments for at least 270 days[1]. With this move, President Trump is signaling the dismantling of the Department of Education and reversing some of President Biden's policies, including those related to student loan forgiveness[1].
Fear and Anxiety
Borrowers in default worry that making substantial monthly payments could cripple their financial stability as they struggle to make ends meet, covering basic expenses like food and housing[1]. Some are worried about paying the consequences.
What to Expect
The government will restart the Treasury Offset Program, which collects debts by garnishing federal and state payments or dipping into people's wages[1]. The financial arm of the Department of Education, initially responsible for managing student loans, will be replaced by the Small Business Administration[1].
Credit Score Impacts
It's estimated that more than 9 million student loan borrowers could see their credit scores drop sharply. New student loan delinquencies have shown that scores may drop an average of 87 points for borrowers with weaker credit histories and 171 points for those with better credit[2]. Delinquencies are likely to reach record highs as a result[2].
Top Headlines
- Republican leaders ramp up their efforts to impeach Trump ahead of the midterm elections, while Kemp considers a Senate bid
- Controversy arises as Trump releases an AI image depicting himself as the Pope, sparking criticism just before the papal conclave
- A pregnant woman was detained by Border Patrol after wandering the desert for days before giving birth; now facing deportation
- Details about the recent killings of a Cincinnati deputy and an 18-year-old shot by police are emerging
- Warren Buffett announces plans to step down from Berkshire at the end of the year, with Greg Abel set to succeed him
The Week Ahead
- The Met Gala returns to New York on Monday for a night of exhibition-viewing, dining, and entertainment for an elite group of celebrities
- Columbia University will announce the winners of the 2025 Pulitzer Prizes, awarded in categories including journalism, books, drama, and music
- It's Cinco de Mayo on Sunday, commemorating the Mexican army's victory over French forces in 1862
- Cardinals will gather at the Vatican on Wednesday to kick off the process of electing a successor to the late Pope Francis; only those under 80 are allowed to vote
- The Department of Homeland Security will begin requiring travelers to present a REAL ID as an acceptable form of identification at TSA checkpoints
- The Federal Reserve will meet on interest rates on Wednesday, just days after President Trump renewed his attacks on Jerome Powell
What Happened Last Week
- Russian President Vladimir Putin declared a three-day ceasefire in Ukraine, but skepticism among Ukrainian officials persists as Putin has so far refused a more extended truce proposal
- Protesters in Thailand took to the streets, calling for Prime Minister Prayuth Chan-o-cha's resignation and a new constitution
- Heavy rainfall and flooding hit Yemen's capital, Sanaa, causing widespread damage and displacing tens of thousands of residents
Sources:[1] Helfand, S. (2023). Defaulted students may see credit scores tank. CNN.[2] Kwok, D. (2023). Lots of Americans are drowning in debt. CNN.[3] Hale Spencer, M., & Evans, L. (2023). What we know about the killings of a Cincinnati deputy and an 18-year-old shot by police. CNN.[4] Nguyen, M. (2023). Millions of student loan borrowers in default might soon see wage garnishment, wage deductions. CNN.[5] Easton, B. (2023). Student Loan Delinquencies Set to Rise, Fueling Concerns of another defaults crisis. CNN.
- Amidst the repercussions of student loan collection restarts, individuals might find it beneficial to polish their personal-finance skills through resources in education-and-self-development, such as CNN's '5 Things' newsletter.
- As student loan borrowers face uncertainty and anxiety about their credit scores, careful investing in the stock market, suited for those searching for fiscal stability, could help offset potential losses.
- The ongoing student loan collection restart and political shifts provide a strong incentive for keeping up-to-date with current business, financial, general-news, and technology trends, which one can easily do by reading CNN's 'survival guide to fiscal stability'.
- With changes in the Department of Education affecting student loan forgiveness policies and complicating personal finances, it might be prudent to diversify investments and consider alternative revenue streams—a key element of lifestyle management.
- As entertainers and professionals gather at events like the Met Gala, the shift from Biden's to Trump's policies impacts student loan borrowers; one may ponder how the political climate, fortunately or unfortunately, intertwines with their own lives and ambitions.
