Biden announced his student-debt-forgiveness plans. Here's how much he canceled and what it might mean for the economy.
Hi, I'm Matt Turner, the editor in chief of business at Insider. Welcome back to Insider Weekly, a roundup of some of our top stories.
On the agenda today:
- After 28 years, "Day 2" has finally arrived at Amazon.
- Will a recession spell the end of working from home?
- Pandemic boomtowns from Boise to Phoenix are starting to go bust.
- Restaurant owners are fleeing Travis Kalanick's CloudKitchens.
But first: One of the biggest stories this week has been President Joe Biden's new student-loan-forgiveness policy. Here to break down the dollars and cents of it all is our senior economic policy reporter Ayelet Sheffey.
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The economics of student-loan forgiveness
The day millions of student-loan borrowers have been waiting for arrived: On August 24, President Joe Biden announced he would be canceling up to $20,000 of their student debt, Insider senior reporter Ayelet Sheffey writes.
But as always, the devil is in the details, and not everyone will qualify:
- Pell Grant recipients making under $125,000 a year will be eligible for up to $20,000 in debt relief.
- All other federal borrowers making under $125,000 a year can get up to $10,000 in loan forgiveness.
The announcement was coupled with Biden's fifth extension of the student-loan-payment pause through December 31, and if you still have a remaining student-debt balance after getting up to $20,000 knocked off, the president also has a proposal for that. His Education Department wants to introduce a new, income-driven repayment plan to lower your monthly bills.
Details on how to access this relief are minimal at this point, and the economic impact of this relief remains to be seen. But there are a range of estimates out there: The Penn Wharton Budget Model predicts $10,000 in forgiveness will cost about $300 billion this year, and the White House affirmed that it doesn't expect this to have a meaningful impact on inflation — but it will make a dent in the $1.7 trillion student-debt crisis.
Check out our FAQ on student-loan forgiveness.
Now, on to this week's top stories.
A "Day 2" mentality is creeping into Amazon
When he started Amazon in 1994, Jeff Bezos preached the importance of a "Day 1" mindset: No matter how old a company, it should always preserve the speedy, risk-taking entrepreneurial zeal of that founding moment.
But according to more than a dozen current and former Amazon employees, "Day 2" has finally arrived — and it's set to be a big challenge for CEO Andy Jassy.
Why Amazon is losing its "Day 1" intensity.
What does a recession mean for the WFH revolution?
As a new downturn looms, millions of Americans are beginning to worry they could lose their newfound freedom to work from home. Bosses hate remote work — and if workers fear getting laid off, the thinking goes, they'll be forced to submit to whatever their employers demand.
But senior correspondent Aki Ito argues the opposite: Rather than ending the work from home revolution, a recession could actually supercharge the country's transition away from the office.
Four ways a recession could save WFH.
Pandemic boomtowns are starting to go bust
During the pandemic, homebuyers flocked to cities like Denver and Boise, which have less expensive homes and ample outdoor space. Now, those red-hot housing markets are cooling.
In Boise, 70% of home sellers dropped their asking prices in July. There are more homes for sale, and they're lingering on the market longer before being sold. Insider spoke with brokers in seven hot spots, who shared the signs of slowdowns they're seeing.
Signs of the housing slowdown.
Restaurant owners open up about CloudKitchens
The company, founded in 2016 and run by the ex-Uber CEO Travis Kalanick, promises would-be restaurateurs a space in addition to amenities like nightly cleaning, marketing and sales advice, and tech integration with delivery platforms including DoorDash.
But several CloudKitchens operators told Insider the company failed to deliver on those promises — and five people said they'd lost their savings trying to operate successful businesses inside CloudKitchens' spaces.
This week's quote:
"I feel like I've made myself indispensable in my job — and therefore, I get away with a lot while working for Conan. I push the boundaries of what a normal assistant should and shouldn't do. A lot."
- Sona Movsesian, Conan O'Brien's assistant, on her working relationship with the TV host.
More of this week's top reads:
- Meet the Oracle exec some employees are calling "the hatchet man."
- It's a really bad time to renovate your house.
- A newly approved depression drug might disrupt the mental-health market.
- Amazon's "Lord of the Rings" series could make or break the company's streaming future.
- A 28-year-old shares how he and his wife make $118,000 a month from Airbnb.
- The world's richest people trust women to manage their personal investments.
- A UPS driver speaks out about having to go to the ER because their truck has no AC and can reach 130 degrees.
- Twitter insiders reluctantly agree with some of the whistleblower's revelations.
Plus: Keep updated with the latest business news throughout your weekdays by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here tomorrow.
Curated by Matt Turner. Edited by Jordan Parker Erb and Lisa Ryan. Sign up for more Insider newsletters here.