What Biden’s Student-Debt Forgiveness Means for Economy

Hi, my name is Matt Turner and I’m Insider’s business editor. Welcome back to Insider Weekly, our roundup of some of the headlines.

Today’s agenda:

But first: One of the biggest stories of the week was President Joe Biden’s new student loan forgiveness policy. Our senior economic policy reporter Ayelet Sheffey breaks down all the dollars and cents here.

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The Economics of Student Loan Forgiveness

The day millions of student loan borrowers have been waiting for has arrived: On August 24, President Joe Biden announced that he would cancel up to $20,000 in student debt, Insider senior reporter Ayelet Sheffey writes.

But as always, the devil is in the details, and not everyone qualifies:

• Pell Grant recipients earning less than $125,000 a year will be eligible for debt relief of up to $20,000.
• All other federal borrowers earning less than $125,000 a year can receive loan forgiveness of up to $10,000.

The announcement comes in conjunction with Biden’s fifth extension of student loan payment moratoriums to Dec. 31, which the president also advises if you still have student debt balances left after deductions of up to $20,000. His education department wants to launch a new, income-driven repayment plan to lower your monthly bill.

There are few details on how this relief will be obtained, and its economic impact remains to be seen.But there are a range of estimates: Penn’s Wharton budget model predicts that $10,000 in forgiveness will cost about $300 billion this year, while the White House confirm It doesn’t expect it to have a meaningful impact on inflation — but it will reduce the $1.7 trillion student debt crisis.

Check out our FAQs about student loan forgiveness.

Now, onto this week’s headlines.

The “next day” mentality is spreading to Amazon

When he founded Amazon in 1994, Jeff Bezos preached the importance of a “day one” mentality: no matter how old a company is, it should always maintain a fast, risk-taking entrepreneurial zeal.

But according to more than a dozen current and former Amazon employees, “the next day” has finally arrived — and it’s going to be a big challenge for CEO Andy Jassy.

Why Amazon is losing ‘day one’ intensity.

What does recession mean for the WFH revolution?

With a new recession looming, millions of Americans are beginning to worry that they may lose their new freedom to work from home. Bosses hate remote work — if workers fear being fired, the idea is that they’ll be forced to obey whatever the employer asks.

But veteran journalist Aki Ito argues the opposite: Far from ending the work-from-home revolution, the recession will accelerate the country’s transition away from the office.

There are four ways a recession can save WFH.

Pandemic boomtowns are starting to go bankrupt

During the pandemic, homebuyers have flocked to cities like Denver and Boise, where homes are less expensive and have plenty of outdoor space. Now, those red-hot housing markets are cooling.

In Boise, 70% of home buyers lowered their asking price in July. There are more homes for sale, and they stay on the market longer before they sell. Insider spoke with brokers in seven hotspots who shared the signs of a slowdown they’re seeing.

Signs of a slowdown in the housing market.

Restaurateurs open up about CloudKitchens

Founded in 2016 and run by former Uber CEO Travis Kalanick, the company promises future restaurateurs that, in addition to amenities like nighttime cleaning, marketing and sales advice, and technology integrations with delivery platforms like DoorDash, there will be a space.

But several CloudKitchens operators told Insider that the company failed to deliver on those promises — five said they had lost their savings trying to run successful businesses in the CloudKitchens space.

Read our full report here.

This week’s offer:

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More of this week’s top reads:

add: Stay up-to-date with the latest business news throughout the working day by checking out Insider’s Refresha dynamic audio news briefing from the Insider Newsroom. listen here tomorrow.

Curated by Matt Turner. Edited by Jordan Parker Erb and Lisa Ryan. Sign up here for more insider newsletters.