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13 Reasons To Cancel Student Loans

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Here are 13 reasons why President Joe Biden should cancel student loans.

Here’s what you need to know — and what it means for your student loans.

Student Loans

Whether you support or oppose wide-scale student loan forgiveness, it’s helpful to understand the following arguments supporting broad student loan relief. As Biden weighs three important decisions for student loans, here are 13 facts that Sen. Elizabeth Warren (D-MA) and other supporters want you to know about student loan forgiveness:

1. 40% of student loan borrowers never get a degree. This means they borrow student loans but can’t access higher-income jobs to pay off student loan debt.

2. 99.7% of student loan borrowers don’t attend an Ivy League school like Harvard or Yale. Supporters say student loan cancellation won’t primarily benefit wealthier borrowers. Student loan borrowers who attend an Ivy League school aren’t necessarily wealthy or high-income earners because they graduate from a particular college or university.

3. The majority of student loans are held by households with no household wealth.

4. Student loan forgiveness is an issue of racial justice. For example, “twelve years after starting college, most Black borrowers owe more than they initially borrowed.”

5. Many student loan borrowers are in student loan default. For example, 20% of student loan borrowers are in student loan default. Of this group, 30% have been in student loan default for more than five years. Progressive members of Congress worry that restarting student loan payments would place more student loan borrowers into student loan default. Student loan forgiveness could help alleviate financial pressure.

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6. The age group for which student loan debt is growing fastest is 60-69 year-olds. While this growth is on a percentage basis (not an absolute dollar basis), more parents and grandparents are borrowing student loans for their dependents to attend college. Given that this age group is at or nearing retirement, their ability to earn income to pay off student loans is limited.

7. 20% of student loan borrowers attended a for-profit college, and these student loan borrowers are twice as likely to default on their student loans.

8. Nearly 50% of all Associate degree students, on average, borrow a student loan and, on average, owe nearly $20,000 of student loans. Student loan borrowers with an Associate’s degree tend to earn less income than student loan borrowers with a bachelor’s degree.

9. Student loan cancellation could free up nearly $400 a month for student loan borrowers. Congress also has proposed 0% interest on student loans. Biden has proposed to lower interest on student loans.

10. Student loan cancellation could stimulate the economy. For example, student loan cancellation could boost GDP by $174 billion and create up to 1.5 million jobs.

11. Wide-scale student loan forgiveness also helps student loan borrowers afford to get married, start a family, buy a home, save for retirement and start a business.

12. Student loan forgiveness can reduce disparities. For example, $50,000 of student loan cancellation would “increase the wealth of Black American borrowers by 40% and close the Black-White wealth gap among borrowers by 25 percentage points.”

13. A majority of Americans support student loan cancellation. For example, a Student Borrower Protection Center poll shows that 62% of all likely voters support student loan cancellation, including a majority of young Republicans.

This is not a comprehensive list of why supporters fight for wide-scale student loan forgiveness. Supporters also say student loan borrowers need a fresh start on their student loans so they can pursue the American Dream. Without student loan cancellation and an extension of the student loan payment pause, some borrowers feel uncertain about their financial future. That said, there is plenty of opposition to student loan cancellation. Why? Stay tuned for reasons why not to cancel student loans. In the meantime, there’s no guarantee that Biden will enact wide-scale student loan cancellation. With mass uncertainty about student loan forgiveness, it’s essential to learn all your options for student loan repayment. Start with these strategies to save money:


Student Loans: Related Reading

Student loans: red, white and blues

9 million borrowers now qualify for student loan forgiveness

Senators propose major changes to student loan forgiveness

Education Department cancels $6 billion of student loans

Finance

Medifast Still A Growth Stock But Now Value Priced

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Medifast is a growth company that is sporting some attractive value-stock metrics after its shares have fallen to a level that is “simply ridiculous” when measured against its prospects, according to Taesik Yoon, who edits the Forbes Special Situation Survey and Forbes Investor newsletters. The diet business’s equity has suffered with growth shares in general as elevated inflation and aggressive Federal Reserve monetary policy to combat it have caused investors to rethink stocks that benefit from an expanding economy.

A slide of roughly 40% in the past year undervalues a growth story that is taking a hit now but remains intact over the longer term, says Yoon, making the stock a bargain. Yet despite also having a fantastic balance sheet with more than twice as much cash on hand than total debt and paying a very generous dividend that is now yielding almost 5%, Yoon says, Medifast’s stock currently trades at less than 12 times its earnings expectations for the year versus a five-year average of 19.4. That might make sense if you expected the current earnings swoon to persist, but Yoon thinks the secular trend toward healthier living and the company’s coach-based business model will have its earnings back on the rise soon, outpacing the market.

Medifast combines an extensive menu of proprietary nutritional products to help with diet goals and a network of almost 64,000 independent coaches. Most of these are former customers who achieved their weight-reduction goals and are compensated from the sales of company products to their clients. Medifast delivers its food regimens to customers, which aided revenue during the pandemic lockdowns and helped earnings growth accelerate by an average 53% over the past two calendar years. That drove its shares to a record $337 in May 2021, but they have lost more than half of that since. Still, even accounting for the risk of an economic slowdown, Yoon expects Medifast’s heavy spending to improve its technology and distribution infrastructure, which could help raise annual sales to more than $2.5 billion, up almost $1 billion from 2021.

Yoon sees long-term profit growth in the double digits, in line with expected sales gains and with operating margins in the mid-teens.

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Finance

How One Founder Is Helping DIY Investors Navigate Risk

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August 14 is National Financial Awareness Day, and I had the opportunity to chat with John Duffy, founder of Trending Stocks, who went from personally absorbing the 2000 and 2008 market crashes to launching a risk-adverse stock market platform for DIY investors. Here, I chat with Duffy about trend following and investment risk management.

WHAT GAVE YOU THE IDEA FOR TRENDING STOCKS?

It took me 14 years to “get even” after two huge downturns in the stock market – first in 2000 (down 50%) and then in 2008 (down 56%). Losing 14 years of investing time and money was the impetus for me to research a better way in the market. I learned about the ancient trend following strategy – and while it worked well – there was no simple software or program to apply it. Spending hours upon hours charting and graphing doesn’t interest anyone, so I programmed and launched TrendingStocks.IO to automate the research time and hassle on the backend.

HOW DOES IT HELP INVESTORS AVOID RISK?

The trend following strategy inherently has a focus on risk management, so I applied that into the new platform. The risk management helps investor avoid riding the market down. You pre-set a fixed stop-loss amount based on your personal risk tolerance. As a stock goes up, which it should based on the trend following strategy’s identification, so does the stop-loss amount; it rides up. While the stop-loss amount fluctuates up and down causally with the stock, if it gets down far enough to cross below a bottom threshold – we flag you to sell and get out.

WHAT’S YOUR BACKGROUND?

Aside from studying finance, economics and business, I’m a Vietnam Navy Veteran. Oddly enough, this was my foray into programming and coding. I bunked with the first IBM IBM programmers in the world. Their expertise interested me, so I asked a bunch of questions and they taught me the science.

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Not to date myself, but this was before when computers could be owned, only leased. IBM recruited me to program after the war, so I entered as one of few who had learned how to program back then.

IS THIS FOR DAY TRADERS OR DIY INVESTORS?

This is definitely not a day-trading solution. Trending Stocks provides analysis at the end of every business day and therefore, it’s not suitable for day trading. It’s after-hours based.

The tech is suited for a long-term, DIY investor and anyone who’s a newbie or wants to get involved in the market. Aside from managing risk, being a diligent trend follower helps with wealth growth over time.

Once an individual has confidence they’re working with good investable trends and a solid risk management process, it’s an easy plan to follow and platform to supplement that plan.

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Entrepreneurship

Difference Between CFD and Shares

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Contracts for Difference (CFD) trading and share trading vary primarily in that when you trade a CFD, you speculate on a market’s price without acquiring ownership of the underlying asset, but when you trade shares, you must do so.

The main distinctions between a share and a CFD are ownership and leverage. You become the owner of the shares when you purchase shares. Investing in shares is equivalent to acquiring a modest ownership share in a business you support. You must pay the whole share price when purchasing stock shares.

CFDs vs shares

Contract for Difference is referred to as CFD. Without holding the underlying asset, you can speculate on the price of a security by engaging in online CFD trading. A stock, stock index, currency, commodity, or cryptocurrency might all be the underlying security for a CFD. With CFDs, you may join a trade with a lower initial investment because they trade on leverage.

Trading CFDs involves taking into consideration leverage and margin, fees and charges, instrument categories, going short, and asset ownership, which is one of the primary difference between CFD and share trading. Let me elaborate more.

What are Leverage and Margin?

Leverage and margin go hand in hand when trading CFDs. By using leverage, you may acquire exposure to an underlying asset without having to put down the whole amount of money needed to purchase and hold the real asset; instead, you just have to contribute a portion of the position’s overall worth.

The amount you must initially have available to begin a position, known as margin, fluctuates based on the contract size and the underlying asset you want to trade. Margin is not a cost. Based on the pre-determined leverage for the asset class, the first margin need is expressed as a percentage of the contract value. Risk is increased while trading on margin.

When you trade on the Invest trading platform, you must have the full asset value accessible, and you buy shares without applying leverage to your available funds.

Variety of Assets

You may trade on more than 2500 different assets on the Traders Union CFD platform, including shares, forex, commodities, indices, cryptocurrencies, ETFs, and options. You may do this to diversify your portfolio and get exposure to major exchanges across the world.

The Invest trading platform is a marketplace where you may buy and sell stocks and ETFs (ETFs). You may purchase and hold shares of your favorite businesses or any listed ETF on the platform, as well as benefit from the newest IPOs when firms go public, thanks to your access to over 1200 equities and 90 ETFs.

Asset Ownership

You may acquire exposure to an underlying asset, such as Gold (XAU), Apple (AAPL), or EUR/USD, without really holding it by using a CFD. Due to changes in the underlying asset’s price, you will either gain or lose money. The goal of CFD trading is to bet on changes in an underlying asset’s price. The size of the stake and price changes determine any profit or loss.

In contrast, when you purchase a stock on the Invest trading platform, you become the owner of the physical asset and look for a potential longer-term rise in the asset’s value before selling it.

Trader doing CFD trading

A Little More About How CFDs Can Differ From Investing

If your position remains open overnight while trading CFDs, you will be charged an overnight fee. While CFD trading is frequently utilized to speculate on near-term events like earnings announcements or the release of U.S. data reports, stock trading is typically favored for constructing portfolios.

In summary, both CFD and share stock trading offer benefits and drawbacks, and both let you profit from price changes that might result in either a gain or a loss. You should be able to choose which Traders Union platform best matches your trading preferences after you have an understanding of your trading goals. Which trading platform—CFD or Invest—does best for you?

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