June 8, 2014

Students Deserve a Fair Shot

Few people in America know more about student debt than Elizabeth Warren does. Before being elected to the Senate from Massachusetts, she was a professor teaching bankruptcy law at Harvard Law School, and has written books on financial literacy, such as "The Two Income Trap." Now Senator Warren is writing legislation to improve the situation.

Commencement speakers may spout cliches and optimism, with their gushing words of advice. But the reality is not abstract or philosophical. Debt is real.

Americans collectively owe about a trillion dollars in student loan debt. It is hard even to grasp what that figure means, but it is useful to note that about 40 million current and former students carry some part of that crushing debt load. Student loan debt follows the borrowers for much of their lives, affecting their credit for years after graduation, affecting where they live, and even affecting what jobs they can take. obamawarren.jpg It is not just a personal hardship, but a national tragedy when students cannot afford to take an entry level job, apprenticeship, or intern opportunity in the very field they incurred debt in order to train for.

Democrats, lead by Senator Elizabeth Warren and supported by the Obama administration, have come up with the best practical solution offered in many years. The Warren proposal would allow students and alums the opportunity to refinance that debt at lower interest rates those commonly available for other types of loans. "When interest rates are low, homeowners, businesses and even municipalities refinance their debt. But right now the government doesn't offer a refinancing option to students," Senator Warren explained. "Allowing students to refinance their loans would help give them a fair shot at an affordable education." This kind of relief is long overdue, and could go far to help students and former students get their credit life back on track.

In a familiar refrain Warren said, "Student loan debt is a real and growing crisis that is crushing young people and dragging down our economy." That sounds familiar. What is new is that the government is stepping in. The student loan refinance proposal is part of a coordinated congressional agenda that Democrats label "A Fair Shot." Meanwhile, President Obama is not waiting for Congress to act. He is issuing a partial fix by executive order today, directing the secretary of education to ensure that certain federal student loans be capped at 10 percent of the borrower's monthly incomes. Hopefully, election year politics will encourage bipartisan support rather than partisan debate. You can read more about the Warren proposal here and more about Obama's executive action here.

November 28, 2012

Toyota Recalls Millions of Cars, Including Corolla and Prius Models

Toyota's problems continue to cascade through a series of announcements and news reports. In October 2012, media drew its attention to Toyota's world-wide recall of about 7.43 million vehicles, for defects in the power window switches causing a risk of fire. That was the manufacturer's largest single recall ever.

Now the popular Japanese brand has announced the recall of another 2.8 million cars, involving multiple model years. The latest announcement concerns problems in the steering system and electric water pumps.

The good news is that Toyota is owning up to defects and giving its broad fleet of consumers fair notice and an opportunity to have the problems fixed. The bad news is that Toyota might soon surpass its competition for the dubious distinction of being most-recalled auto maker ever. At the same time, it is important to note that the absolute number of vehicles recalled reflects Toyota's high global market share, and the recalls are not for the entire vehicle, but particular components. Toyota Prius owners, in particular, are notably loyal to the brand and Toyota's dominance among hybrids is likely to continue.

March 7, 2012

More Bad News For Nissan

Just as we finished reporting on a fuel sensor defect in certain Infinitis, the National Highway Traffic Safety Administration Office of Defects Investigation now announces two additional recalls.

Campaign number 12VO79 reports a side airbag recall in certain 2003-2005 Infiniti Q45 vehicles. A defect in the wiring connector may cause non-deployment in the event of a crash. Even though these vehicles are otherwise out-of-warranty, Nissan will modify the wiring connector free of charge. Affected owners can expect a notice from Nissan beginning March 12, 2012.

Campaign number 12VO76 draws attention to the 2011-2012 Nissan Quest. Certain vehicle of this make and model, manufactured from July 29, 2010 through February 21, 2012 have a stalling problem due to software programming.

Some manufacturers contend that stalling or sudden deceleration is merely a driveability, or performance, problem. This is not the case. Loss of speed can be a serious safety problem in many situations – heavy traffic, turning left, changing lanes, freeway entry, or normal freeway driving. Nissan and NHTSA are reporting this as a safety recall, scheduled to begin in mid-March 2012. Owners ay contact Nissan at 1-800-647-7261 for more information.