P.M. Edition for Feb. 27. A pandemic-era freeze on federal student loans has been lifted, but many borrowers haven’t resumed their payments. WSJ personal finance reporter Oyin Adedoyin discusses why that has effects on individuals and the broader economy. Plus, a strong dollar complicates things for U.S. companies with global operations. Kristin Broughton, who covers corporate finance for the Journal, joins to talk about what companies are doing to stabilize their financial reporting. And the art of the beer sommelier—who wants to become a Master Cicerone? Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the consequences of resuming federal student loan payments?
This can have ripple effects throughout the economy. It puts things like homeownership at risk or getting a new car further out of reach for late payers. And so folks who are in this position told me that this just kind of felt like a nail in the coffin.
And for some U.S. companies, a strong dollar is kind of a nuisance. It's Thursday, February 27th. I'm Alex Ocelot for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. President Trump has announced an additional 10% tariff on imports from China over its role in the fentanyl trade.
Chapter 2: How does the strong dollar affect U.S. companies with global operations?
The move doubles up on the previous 10% of additional tariffs the president placed on Chinese products earlier this month. The new tariffs are set to go into effect on Tuesday. In a post today on his Truth Social platform, Trump also reinforced his threat to impose 25% tariffs on products from Canada and Mexico, a day after hinting that they could be delayed again.
A spokesman at the Chinese embassy in Washington defended China's record in fighting drug trafficking. In U.S. markets today, stocks slipped after President Trump made fresh tariff threats, and investors remained unimpressed by NVIDIA's forecast beating results after yesterday's close.
The Dow fell about half a percent, the S&P 500 dipped roughly 1.6 percent, and the Nasdaq dropped about 2.8 percent. President Trump said today that he expected any Ukraine-Russia peace deal would hold, but that his approach toward talks involving the Kremlin will be, quote, trust and verify.
Asked whether he believed Russian President Vladimir Putin would negotiate in good faith, Trump said that he has confidence that if there is a deal, it's going to hold. The remarks, made while sitting next to British Prime Minister Keir Starmer in the Oval Office, showcase the president's confidence in his own deal-making skills.
At a press conference after the meeting with Starmer, Trump said he's working for a ceasefire in Ukraine.
The next step we're making is toward a very achievable ceasefire. We hope that that can happen quickly because thousands of young people, in this case, we're not talking about Americans, we're talking about Ukrainians and Russians are being killed every week.
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Chapter 3: Why have many student-loan borrowers not resumed their payments?
U.S. officials have said it is premature to decide on the American role in any peacekeeping force until an agreement to stop the fighting is reached. For people with federal student loans, the payment clock is ticking again. In October, pandemic-era relief on federal student loans ended, kicking off the 90-day window people have to make payments before their credit scores tick a hit.
And it seems that many of them haven't. According to credit score provider VantageScore, about 43 percent of borrowers who owe payments haven't resumed making them. To talk more about the impact, I'm joined now by personal finance reporter Oyin Adedoyin. Oyin, why is this happening? Did millions of people just, like, forget that payments have restarted?
No, not exactly. One of the biggest things that borrowers who are experiencing this have told me is that they feel like they didn't receive sufficient communication from their student loan servicers. Student loan delinquencies are really interesting because, unlike credit card debt, student they don't really start to ping you or hit your credit report until 90 days late.
Chapter 4: What are the broader economic impacts of student loan delinquencies?
So if you are 30 days late or 60 days late, you don't really hear anything. And at a time like this, when student loans have been paused for so long, people didn't realize that this on-ramp period ended in October. So now, you know, everyone from, you know, folks who are maybe freshly graduated from college to people who are in their 40s trying to get another house,
are seeing this in their credit report and kind of freaking out.
What is the impact if you happen to be one of those among the 43% who has not made your payment yet?
This can have ripple effects throughout the economy. It puts things like homeownership at risk or getting a new car further out of reach for late payers. Lower scores could also mean lower credit card limits. and higher rates.
One of the borrowers that I spoke with told me that she was just getting ready to request a higher limit on her credit card before this happened, and her credit score had dropped over 100 points. So, you know, credit companies are going to see that and tighten their lending.
This is a generation for whom things like home buying kind of feels off limits. Is merely forgetting an individual payment going to have really that big an impact on some of those big economic items for them?
You hit it exactly right. This is a generation of people who are already feeling like the American dream is out of reach for them. Everything just seems to be getting more expensive with the lasting effects of inflation. And so folks who were in this position told me that this just kind of felt like a nail in the coffin.
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Chapter 5: How does a drop in credit scores affect borrowers' financial futures?
People felt like they were finally getting their head above water and some of these things saved up for a down payment, things like that. And then they get this ding on their credit report that could infringe on their possibility to obtain a home or get a car or just further their adult lives. And credit reports are things that take a long time to build up.
Some of these blemishes on your credit report could stay on for up to seven years. So this can be a really long-lasting negative impact for people.
That was WSJ personal finance reporter Oyin Adedoyin. Thank you so much, Oyin.
Thank you.
Coming up, why, for some U.S. companies, a strong dollar can be a big pain. That's after the break. For Americans traveling abroad, a strong dollar is often a good thing. But for U.S. companies with global operations, a strong dollar can actually be a bit of a headache. And right now, the dollar is really strong.
The WSJ dollar index, which tracks the dollar against a bunch of other currencies, rose 6% during the fourth quarter of 2024. And though that's down a bit from its latest peak, as of yesterday, the dollar is up 2.4% from a year earlier. Kristen Broughton, who covers corporate finance for The Journal, is here to tell us more. So, Kristen, break this down a bit for me.
Why can a strong dollar make life difficult for some U.S. companies, even if they're posting strong sales abroad?
Really, this is a headache when it comes to financial reporting. So when they report their earnings every quarter to investors, when the company translates the sales that they generated abroad back into the dollar, the earnings abroad take a hit.
What are some of the companies that are affected by this?
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