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You Still Have Time to Ask Colleges for More Financial Aid

DeRionne Pollard, president of Montgomery College, a three-campus community college in Maryland, said that use of the SwiftStudent tool was invisible to financial aid officials but that it helped students craft a clear, comprehensive appeal.

“It allows and empowers students to advocate for themselves,” Dr. Pollard said.

In a survey last fall, college financial aid counselors reported “notable” increases in requests for professional judgment reviews, according to the National Association of Student Financial Aid Administrators. The group will conduct another survey next month to update its findings.

Here are some questions and answers about financial aid:

I’m confused by my aid letters. How can I make sure I am correctly comparing offers?

Colleges are encouraged to use standard formats for aid letters and avoid jargon, but not all do. Be careful to distinguish between “gift” aid, like grants and scholarships, which doesn’t have to be repaid, and loans, which do. Subtract the gift aid from the college’s cost of attendance — the total cost of tuition, housing, meals, books and supplies — to get a net price. Do this for each school before considering how much of the cost you can cover from savings and earnings, and how much you would have to borrow to cover any shortfall.

A nonprofit group that works to help students afford college with less debt, uAspire, created a free online cost calculator to help applicants make “apples to apples” comparisons of aid offers. The Consumer Financial Protection Bureau also offers an online tool to compare offers, and the Institute for College Access & Success offers a tip sheet.

And remember: You aren’t obligated to borrow all, or any, of the loans that are included in your aid letter, said Jessica Thompson, associate vice president at the institute. On the other hand, some colleges may not include the maximum amount of federal student loans for which you are eligible. So if you think you may need to borrow more, call the financial aid office to discuss your situation, she said.

What documentation do I need when making a financial aid appeal?

Colleges vary in how they evaluate an appeal. But gather anything that shows reduced hours or wages, like letters from employers, pay stubs or unemployment records, as well as medical bills, to help make your case, Ms. Warick said.

Can I make an enrollment deposit at more than one college?

Colleges frown on this practice since you ultimately can’t attend more than one college, and making two deposits means another student — one on the wait list, or a late applicant — won’t be offered a spot, Mr. Hawkins said. It also works against less affluent applicants, who may be unable to afford more than one deposit. So members of the admission counseling association advise against it, he said.

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The Fed Faces Criticism as It Wades Into Climate and Equity Issues

And Michael Strain, an economist at the American Enterprise Institute in Washington, said he was concerned that the Fed’s focus on fostering equity — by driving down Black unemployment, for instance — could make it too hesitant to lift interest rates, allowing inflation to bubble up.

But Fed officials say the central bank is being pragmatic, not political. Ms. Daly regularly points out that understanding climate change risks to the financial system is important for bank regulators and supervisors. Mr. Powell said during a webcast Wednesday that the Fed sees such issues “through the lens of our existing mandates” — racial, gender and other disparities in economic outcomes “hold the economy back,” for example.

“Also I think we now realize that unemployment can go low for quite a long time without inflation being a problem — which will tend to help those groups,” he said.

Still, the Fed knows it’s in fraught territory. Mr. Powell avoids endorsing specific legislative packages. When Fed officials talk about inequality, they often discuss opportunity — a framing with more bipartisan backing.

There is a risk if the Fed is seen as a “quote unquote Democratic institution,” said Peter Conti-Brown, a Fed historian at the University of Pennsylvania. It might lose support across political cycles, as with the Consumer Financial Protection Bureau, which is largely seen as a liberal project.

“The Fed always needs political support to do its job well and to have the autonomy it wants,” said Sarah Binder, a political scientist at George Washington University who studies the Fed’s politics. Pushback that led to reform has generally come from Democrats — who have forced it to focus more on employment and reined in its ability to help Wall Street — rather than Republicans, she noted.

And even now, some Democrats say the central bank could go further. Representative Rashida Tlaib, a Michigan Democrat, has pushed the Fed to do more to get cheaper credit to states and localities, for instance.

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New proposal would ban most foreclosures until 2022.

A wave of foreclosures and evictions threatens to arrive when pandemic-related pauses expire later this year, and the Consumer Financial Protection Bureau is considering restrictions on mortgage servicers that would spread the hit into 2022.

More than 3 million households are behind on their mortgage payments, and nearly 1.7 million will run out their forbearance periods in September, according to the bureau.

“We are at really an unusual point in history,” said Diane Thompson, a senior adviser at the bureau. “I don’t think anybody has ever before seen this many mortgages in forbearance at one time that are expected to exit at one time.”

So the bureau has come up with a proposal to ensure that homeowners don’t go straight from forbearance to foreclosure.

proposed a new rule that would prevent servicers from starting foreclosure proceedings until after Dec. 31. The intent, bureau officials said, is to give borrowers coming off forbearance time to consider their options, such as whether they need a mortgage modification to reduce their monthly payments. The restriction would apply only to mortgages on homes used as primary residences.

The agency also proposed a rule change that would allow servicers to extend loan modification offers to borrowers experiencing a Covid-related hardship without undertaking the full review normally required to adjust a mortgage. The intention is to let lenders quickly offer borrowers more affordable terms, so long as the change does not increase the borrower’s monthly payment or extend the loan’s term by more than 40 years.

The consumer bureau is seeking public comment on its proposals, a required step in the rule-making process that will allow industry groups a chance to raise concerns about the changes.

The Mortgage Bankers Association, a housing industry trade group, did not immediately comment on Monday.

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Pandemic Helps Stir Interest in Teaching Financial Literacy

In the latest round of legislative proposals, some states are merely encouraging the teaching of financial skills while a few would make the subject a graduation requirement. Ohio, for instance, is considering a proposal that would require high school students to pass a half-credit class in personal finance in order to graduate. The class must be taught by a teacher trained in the subject matter.

The bill would also create a fund to help pay for training to teach the subject, said State Senator Steve Wilson, a Republican and former banking executive who co-sponsored the bill. He said he was hopeful that the bill would be voted out of committee this month.

“Kids come out of school having no clue about financial literacy,” Senator Wilson said. “You go out into the world greatly disadvantaged.”

Many financial literacy advocates consider a full-semester course the gold standard for personal finance instruction. Rebecca Maxcy, director of the Financial Education Initiative at the University of Chicago, said many courses focused mainly on skills, like writing a check or filing taxes. While those lessons can be helpful, she said, it’s important for courses to include discussions of how personal values and attitudes about money influence behavior, as well as an examination of the financial systems and potential barriers that students will encounter in the world of money.

Questions like “Who benefits when you open a bank account?” can prompt meaningful discussions, she said.

Some curriculum options, however, offer more condensed, basic instruction.

Everfi, a digital instructional company, offers a free seven-session program for high school financial literacy. Students take interactive, self-guided lessons in topics like banking, budgeting and college financing.

Sidney Strause, a freshman at Marshall University in West Virginia, said she had taken Everfi’s course as a junior in high school. The lessons were assigned as part of another course she was taking, and typically took 45 minutes to an hour to complete.

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A Novel Way to Finance School May Penalize Students from HBCU’s, Study Finds

The typical student who borrows to attend college leaves with more than $30,000 in debt. Many struggle to keep up with their payments, and America’s ballooning tab for student loans — now $1.7 trillion, more than any other type of household debt except for mortgages — has become a political flash point.

So a financing approach known as an income-share agreement, which promises to eliminate unaffordable student debt by tying repayment to income, has obvious appeal. But a new study has found that income share agreements can also mask race-based inequalities.

The analysis, released on Thursday by the Student Borrower Protection Center, an advocacy group, found that borrowers at schools that focus on minority students can end up paying more than their peers at largely white campuses.

Income-share agreements are offered mainly by schools, although some private financiers have started marketing them directly to students. The selling point of such agreements is that, unlike loans, they don’t accumulate interest, and they come with both a predetermined repayment period and a cap on the total amount that the lender can seek as repayment. To students leery of accumulating educational debt that can snowball and stick around for decades, income-share agreements can offer a more flexible alternative.

Silicon Valley investors who are funding start-ups, as well as some policymakers. A growing number of colleges and vocational training programs are letting students finance some or all of their studies with such contracts. Purdue University was the first to offer them widely, starting in 2016. Private schools including Lackawanna College and Clarkson University have followed suit. Vemo Education, a venture that manages I.S.A. programs, said it has worked with 70 schools and training courses.

But the market is opaque and lightly regulated, making it challenging for borrowers to find the kind of consumer-protection disclosures that typically accompany financial products. Financiers are generally not required to reveal any information on how much money they have lent and how those deals have worked out for borrowers.

Student Borrower Protection Center researchers obtained data from the website of one private financier, Stride Funding in Dallas, and studied its agreements to illustrate how they can contain buried inequities. (Other companies that market the agreements directly to students include Align, Defynance and Lumni.)

Like most lenders in this market, Stride varies its repayment terms depending on the borrower’s earning potential. An English major typically will need to fork over a higher percentage of salary than an engineering student. (Stride caps its maximum repayment amount at two times the amount that was borrowed. Its contracts typically require recipients to make payments for five to seven years.)

repay 5.65 percent of their income for five years, according to a payment calculator on Stride’s website. But the same calculator showed that an economics student at Morehouse, an historically Black school in Atlanta, would be asked to repay 6.15 percent of their income.

asked the Consumer Financial Protection Bureau last year to investigate several lenders that they said might be discriminating against women and minority borrowers by charging them higher rates, based on their lending algorithms.

“The risk of discrimination arises because the lender is not evaluating the applicant based on their own characteristics, but instead based on the characteristics of other students at their school or who were in the same major or program,” the lawmakers wrote.

Officials at the NAACP Legal Defense & Educational Fund got an early look at the Student Borrower Protection Center’s report and found it disturbing. Stride’s lending might run afoul of the Equal Credit Opportunity Act, they said in a letter sent to the company on Thursday morning.

“Particularly given how the economic fallout of the ongoing Covid-19 pandemic has disproportionately hurt Black Americans, the need for equitable access to consumer financial products and services is more important than ever,” the fund said in the letter, which was also signed by Mr. Frotman’s group.

Ms. Michaels said Stride “shares the goals” of the two groups and “is excited to have the chance to work with them on our shared mission of providing access to financial products to those who have long been left out of traditional credit marketplaces.”

told Forbes that her company anticipated making loans to 1,800 students this year.

Government regulators have been keeping a cautious eye on the emerging market. Rohit Chopra, President Biden’s nominee to run the Consumer Financial Protection Bureau — which is often the federal enforcer of fair-lending laws — has spoken frequently about the risk of bias in algorithmic lending decisions. (Mr. Chopra, a commissioner on the Federal Trade Commission, is awaiting a Senate vote on his nomination.)

“Our student debt market is definitely broken, and it needs a massive overhaul,” Mr. Chopra said at a conference last year. “I’m not sure that new products like income share agreements will be an antidote, especially if they worsen disparities.”

Ashok Chandran, a lawyer at the NAACP fund, said he hoped state and federal watchdogs would pay close attention to the novel lending products. “This market operates in such a regulatory dark space,” he said. “We’re pretty troubled by the report, and in particular by how stark the disparities are.”

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