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On The Money — Student debt cancellation unveiled 

Biden has finally announced his plan to cancel hundreds of billions of dollars in student debt and we have the details. We’ll also look at the Fed’s upcoming inflation summit, a new Senate report on foreign tax evasion and the biggest Ukraine aid package to date. 

But first, find out if you are a Pell Grant recipient. 

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Biden announces student loan action 

President Biden officially announced on Wednesday that his administration is forgiving up to $10,000 in federal student loan debt for borrowers making less than $125,000 annually and $20,000 for Pell Grant recipients, marking the largest forgiveness of the loans per individual to date. 

Biden also again extended a payment freeze on federal student loans and interest accrual, butting right up against an Aug. 31 deadline that would have kicked bills back into effect just before November’s midterm elections. 

  • The payment pause is extended “one final time” until Dec. 31, with borrowers expected to resume payments next year. 
  • Current students with loans are eligible for the debt relief, and dependent students will be eligible for relief based on their parents’ income. 
  • The plan also aims to cut the loan repayment cap in half for low-income undergraduate borrowers.  

Read more from Alex Gangitano here, and check out The Hill’s extensive coverage of Biden’s student debt plan: 

  • Here’s what’s inside Biden’s historic student debt forgiveness order
     
  • Progressives hail Biden for action on student loans 
  • Biden sells his student loan plan, calls it economically responsible 
  • Biden student loan plans caught in inflation debate crosshairs 

NO PAUSE FOR POWELL  

Dip in inflation will likely be a cold comfort to Fed at Jackson Hole summit 

Top Federal Reserve officials will spend three days plotting the next moves in their fight against inflation from a Wyoming ski resort as millions of Americans struggle with the rising cost of basic goods. 

The Fed’s annual summer policy summit in Jackson Hole, Wyo., kicks off Wednesday as the bank attempts to steer the U.S. out of high inflation and away from a recession.   

  • The event, which is closed to the public, begins with two days of panels and paper presentations focused on a central theme and concludes with a speech from Fed Chairman Jerome Powell.   
  • While only a few dozen attendees will witness Powell’s remarks, the text of his speech could give financial markets, Fed analysts and the American people a closer look at his views.  

“He can reference whatever he thinks is important and kind of guide readers to see how he views the world,” Englander said, comparing the Jackson Hole speech to the president’s annual State of the Union Address.  

“There’s a feeling that it gives them greater insights,” he continued. 

Sylvan has more here. 

The nitty gritty: Like his predecessors, Powell has used his past Jackson Hole speeches to frame his vision on the Fed’s approach to its biggest challenge of the moment, beyond the month-to-month speculation of what the bank will do to interest rates.   

Fed watchers generally don’t expect Powell to hint at what the Fed will do in September during its next monetary policy meeting — particularly with so much uncertainty facing the bank in its fight against inflation. 

“We are seeing some green shoots, but they don’t want to declare victory prematurely,” said Derek Tang, co-founder and economist at research firm Monetary Policy Analytics, in a Monday interview.  

‘SHOCKINGLY EASY’  

Senate report blasts IRS for handling of foreign bank registration 

A Senate report released Wednesday on a form of tax evasion was highly critical of the IRS for the way it handles foreign bank registration as part of the laws that govern how U.S. citizens and business entities can own foreign assets. 

  • The report said that it was “shockingly easy” to obtain a certain kind of registration number from the IRS that signifies its holder to be a valid foreign financial institution. 
  • The registration process was mandated as part of the Foreign Account Tax Compliance Act (FATCA) passed in 2010, which requires Americans to report assets held outside the U.S. to the IRS. 
  • A write-up of the report from the Senate Finance Committee described the process of obtaining registration numbers — known as Global Intermediary Identification Numbers, or GIIN numbers — as “alarmingly simple.”  

The Hill’s Tobias Burns breaks it down here. 

UKRAINE AID

Biden pledges $3B weapons package to Ukraine to mark Kyiv’s Independence Day 

President Biden marked Ukraine’s Independence Day on Wednesday by announcing a nearly $3 billion security assistance package to bolster Kyiv as it battles the Russian invasion.    

The White House announcement came as Ukraine braced for stepped-up attacks from Russia on the holiday, which also coincided with the six-month mark of the start of Moscow’s military campaign. 

  • It’s the single largest tranche of U.S. assistance to Ukraine since the start of the Russian invasion earlier this year. 
  • The new assistance is being provided through the Ukraine Security Assistance Initiative, meaning that the equipment will not come from existing U.S. weapons stockpiles.   

Morgan Chalfant has more here

Good to Know

The Federal Trade Commission (FTC) entered an agreement with Meta CEO Mark Zuckerberg on Tuesday to drop him from an ongoing antitrust lawsuit attempting to block the company’s purchase of a virtual reality company. 

A joint court filing stipulates that Zuckerberg will not purchase the company, Within Unlimited, as an individual or through any entity controlled by Zuckerberg in exchange for being removed as a defendant in the suit. 

Here’s what else we have our eye on: 

  • A bombshell Twitter whistleblower complaint alleging the company has major security deficiencies is adding fuel to Elon Musk’s core argument in his case against Twitter as he tries to back out of his $44 billion deal to buy the platform.  
  • Former Interior Secretary Ryan Zinke and his chief of staff misled an internal federal watchdog about the department’s decision to punt on a proposed Native American casino in Connecticut, the watchdog said in a report released Wednesday. 
  • California is expected to approve a ban on the sale of new gas-powered cars that would begin in 2035.  

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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