Fraud and clerical errors cost the government $614 million in the Federal Stafford loan program—as more recipients are pocketing the money and have no intention of going to college, according to the Education Department. It’s a bit of news that is sure to shade the congressional debate about stopping interest rates on new loans from doubling before July 1.
The surge in student aid fraud prompted the department to begin an aggressive program that flags federal aid applicants who have an “unusual enrollment history.” So far, the agency has flagged 126,000 applicants since January---that’s about 1 percent of applicants. For the Pell Grant program the federal government lost about $829 million to improper payments in 2012, down from the previous two years, but up 86 percent since 2007. - Read more at The Wall Street Journal
SENATE IMMIGRATION BILL GAINS MOMENTUM The Gang of Eight immigration reform bill will likely get a Senate vote on Thursday or Friday. Sen. Chuck Schumer (D-NY) said Sunday on CNN’s State of the Union that the measure has support from about two-thirds of the Senate’s members and predicted it would attract “in the neighborhood of 70 votes” for final passage. - Read more at The Fiscal Times
WHAT SAME SEX MARRIAGE MEANS FOR TAXES The Supreme Court’s long-anticipated ruling on the Defense of Marriage Act, expected this week, will provide some clarity over how to advise same-sex couples on financial planning.
DOMA prohibits same-sex couples from filing joint federal income tax returns, receiving Social Security survivor benefits and accessing federal estate and gift tax marital deductions. A Supreme Court ruling that overturns the law would cause jubilation in the gay community, followed by wedding planning and—possibly—a trip to the accountant.
“Without full marriage equality nationwide, complexities will still exist — for example, what happens to investment decisions when a couple moves from New York to Texas?” Todd Sears, a former investment banker at DeSilva & Phillips and the founder of Out on the Street, an advocacy group for the LGBT community with a focus on financial planning, told POLITICO. “There will still be a need for financial advising services regardless of what the DOMA decision is.” - Read more at Politico
BANKERS’ PAY DROPS FOR FIRST TIME IN THREE YEARS Average pay for executives at some of the largest banks in the U.S. and Europe dropped by 10 percent from last year, amid investor and regulatory pressures, The Financial Times reports.
“Last year's fall in pay coincides with an average drop in net income by more than a fifth across those 15 lenders. But it also comes amid a share price recovery in the sector, with all but two of the banks - BBVA and Credit Suisse - outperforming the FTSE World index in 2012.” Just three bank CEOs John Stumpf at Wells Fargo, Stuart Gulliver at HSBC and Brady Dougan at Credit Suisse - received pay rises. Stumpf topped the list with $19.3 million. - Read more at The Financial Times
NAVY & AIRFORCE BRACE FOR LAYOFFS In the wake of the sequester cuts, the Navy Installations Command announced Friday that it will lay off 745 civilian positions across 20 states by the beginning of next year. The Air Force also announced that it would eliminate 15,000 positions. Defense Comptroller Robert Hale warned that, if sequestration continues into next year, there would likely be more firings. - Read more at GovExec
AMERICANS SUPPORT LIMITING CAMPAIGN CONTRIBUTIONS A new Gallup poll shows an overwhelming 70 percent of Americans say they support limiting congressional campaign contributions, a possible blow to the Super PACs and outside groups that flushed $7 billion into the 2012 election cycle.
The poll also found that 50 percent of Americans would support a law banning campaign contributions from individuals or groups and would prefer to have the government fund campaigns. - See the poll here