Marketplace - You gotta start paying back those student loans. No, really.

Episode Date: September 30, 2024

Sept. 30 marks the end of a yearlong grace period that came after a several yearslong pause on student loan repayments. Starting tomorrow, missing a payment will affect borrowers’ credit scores. Are the most vulnerable borrowers prepared to pay? Also in this episode: Women’s sports sponsorships gain ground, Zillow introduces climate risk scores for homebuyers, and a potential longshoremen’s strike looms on the East Coast and Gulf of Mexico.

Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today though, there's another threat out there, climate change. This could be the warmest year on record. Climate change is here.

Temperatures here are warming faster than anywhere on earth. And while the threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season, we go to the front lines of the climate crisis to see how the military is preparing for the threat. Listen to How We Survive, wherever you get your podcasts.

Item one, we do still make things in this economy, you know. Item two, location is everything in real estate. And item three, look, we gotta talk supply chains. From American public media, this is Market Flaps. In Los Angeles, I'm Kyle Rizdal. It is Monday today. This one is the 30th of September. Good as always to have you along, everybody. Two calendar items with which to begin today. Item one, the vice presidential debate tomorrow night, at which it is a very safe bet.

The topic of item two is going to come up because tomorrow morning, and here is item two, the Institute for Supply Management is going to release its monthly update on the health of the American manufacturing sector. That report has not been super happy reading for the better part of the past two years now. Manufacturing in this economy has contracted 21 of the past 22 months. But as Marketplace's Abreed Benashour reports to get us going,

some parts of manufacturing are thriving and overall there is some optimism afoot. Maybe during the pandemic, you bought a stainless steel refrigerator, maybe you reeted the bedroom. Well, data suggests you are not quite ready to throw it all out and start over again. Demand has been essentially non-existent

for about 24 or 25 months. Timothy Fiore is with the Institute for Supply Management. Its purchasing manager index in August was 47.2. Anything below 50 is a contraction. We've been contracting our new order levels. Our backlog has been shrinking for at least 24 months. We ordered so much stuff during the pandemic that we are still not ready to buy more big things.

And that is still, still showing up in manufacturing data. Throw on top of that, interest rates, which yeah, they have come down, but from manufacturer's perspective, it took a while. We've really been looking for interest rate reductions back in the summertime, and we didn't really get them. Sounds grim, but there are areas of manufacturing which are still doing pretty great.

A lot of the US manufacturing, especially in the electronics area, is aerospace and defense. John Mitchell is president of IPC, the Global Association for Manufacturing. Electronics manufacturing goes into everything from AI to defense. We can't keep up with the needs that are in that sector. And there's really a backlog there. Manufacturing might escape the pandemic hangover soon, according to Randy Altshuler, CEO of Xometry, which is a platform that connects buyers and sellers and manufacturing of all

kinds. We're hearing from our buyers and our suppliers in our marketplace that customers are once again looking to replenish their inventory. Another positive, building buildings, says Ned Hill, professor of economic development emeritus at The Ohio State University. Anything that has to do with constructing an industrial building is doing really well.

He says those are long-term kinds of contracts, so the manufacturing behind them is in good shape. Overall, manufacturing in the US might not be at the top of its game, but it's not terrible. I'm hearing you or Kai Rizdahl going, eh, okay, better than me. Took the words right out of my mouth. In New York, I'm Sabri Beneshor for Marketplace. Oh man, sometimes you just get caught off guard. Wall Street today the third quarter of the year came to a close on an up note. We will have the details when we do the numbers Think for just a second about basically everything that we consume in this economy that comes from overseas, and then recall from the depth of the pandemic how fragile our supply chains are. And then consider that at midnight tonight, longshoremen at ports from Maine to Texas are set to go on strike.

And then listen to Marketplace's Stephanie Hughes explain what happens next. Imagine a giant cargo ship full of car parts like alternators and radiators and batteries. If that ship can't make it to shore and unload, car makers could have trouble making cars. So this means you've either got to slow down your manufacturing process or possibly at some point close it down. Margaret Kidd is a professor of supply chain and logistics at the University of Houston. She says other kinds of products could be held up too, including the edible kind. From a consumer standpoint, I'd be concerned about fresh fruits and vegetables.

Take bananas. A lot of those are imported into Wilmington, Delaware. And the longer bananas keep sitting on a ship, the browner they could get. King Long Dai studies operations management as a professor at Johns Hopkins and says any delay could affect? How much of the food could still be fresh, crispy, usable by the time they have arrived here? Dai says that could lead to empty shelves in grocery stores. And if the slowdown goes on for too long, it could affect the production of packaging,

because paper and wood pulp are big imports, says University of Maryland logistics professor Jeff Millsom. Jeff Millsom, MD, PhD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD,

MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, PhD, MD, the those consumer products. Milsom says many retailers have already built up their inventories for the holidays, but they'll want to be nimble. Say there's a run on squishmallows. Those are animal or character pillows, hot with the kids right now.

And a store needs to order a bunch more turquoise ones with cute little owl faces. Those could take a while to arrive. As Milsom points out, the effects of a strike can be cumulative. One day, a port strike can take about a week to recover from. He says it can lead to a bottleneck where some ships are stuck in a port waiting to be unloaded and others full of car parts and squish mellows and bananas are an anchor waiting to come in. I'm Stephanie Hughes from Marketplace. Tucked into the trillions of dollars in federal relief spending that Congress approved as

the realities of the pandemic started to sink in was $70 billion designated for public transit agencies. That money kept those trains and buses going even as they lost most of their riders and, of course, the fares that they pay. The federal aid is finally running dry now, though, and while ridership has improved in a lot of places, it's still not back to where it was in the before times. And that is forcing some agencies, both big and small, to consider service cuts. Marketplace's Henry Epp reports.

After a few dozen people filed into the pews of a Unitarian Universalist church in downtown Burlington on a recent evening, Clayton Clark got up to deliver the bad news. And so the reason why we're here tonight is because in fiscal year 26, which will start in about nine months, we have about a $2 million gap. Clark is the head of Green Mountain Transit, the agency that runs buses in and around this small city and out to some rural parts of the state.

To close that budget gap, Clark told the crowd, the agency would start by cutting routes that don't have many riders. Resident Patrick Mulligan is one of the few passengers who depend on one of those lines. He spoke at the meeting. I understand if you want to cut that out, but you have to give us an alternative. I mean, summertime I can ride my bike up to Transit Center. February, March, when we're in the dead of winter, that's going to be a little tough. Green Mountain Transit serves a few thousand people a day, but many larger transit agencies around the country are facing the same post-pandemic problem.

Their ridership has not yet come back to pre-pandemic levels, and yet they're providing service at the same level as they did pre-pandemic levels, and yet they're providing service at the same level as they did pre-pandemic. Yona Freemark is a researcher at the Urban Institute. As agencies finally run out of federal pandemic aid, this is unsustainable, Freemark says. So agencies from BART in the Bay Area to SEPTA in Philadelphia are, like GMT in Vermont, considering service cuts. The problem is, when a transit agency goes and cuts service, it ends up reducing the attractiveness of the buses and trains that its riders take advantage of. This creates a vicious cycle.

Fewer riders take advantage of those services and the agency ends up collecting even fewer revenues and so the cycle then repeats. Operating a good transit system that people want to ride means providing lots of reliable frequent service, says Brian Taylor, a professor of urban planning at UCLA. You need to have a network of service that reasonably covers an entire urban area. The reality is parts of that network

will have lots of riders and make money, he says, but other parts won't. But those who are there need to get to destinations to get to work on time, to get to the doctor, to get to things that they need to get to. For the last four years, federal aid helped keep those money-losing lines operating. But as they use up the last of that aid, transit agencies are looking elsewhere for funds, says TJ Doyle at the American Public Transportation Association. There's no real silver bullet to this, but I do think systems and agencies are trying anything they can.

Minnesota, for example, passed a sales tax last year to fund transit. Nashville has one on the ballot this November. In Vermont, Green Mountain Transit asked the state legislature for more funding, says General Manager Clayton Clark. What we heard from them at the time was that there's a lot of competing needs for limited state resources and that GMT should really learn to live within its budget. The agency will try again in the next legislative session in January, he says. But in the meantime, they're creating a new potential revenue source, a non-profit organization. We wanted to be able to apply for additional grants that are available only to non-profits and to take advantage of some of the things that non-profits are able to do. Like taking direct donations from foundations, individuals, anyone who wants to help fund the buses.

Clark expects the nonprofit to be up and running in three to four months, just as the planned service cuts start to ramp up. In Burlington, Vermont, I'm Henry App for Marketplace. If you needed confirmation that climate change can get you no matter where you are, look no further than Asheville, North Carolina, devastated by flooding after Hurricane Helene, even though it's hundreds of miles from the ocean. Helene cut a 600-mile path of destruction through the southeast of this country, killing at least 120 people. And climate hazards like that are only going to get worse, which is making more people consider the risks of where they live.

Zillow, which is this economy's biggest real estate search platform, announced last week it's going to add information about climate risks and how they might grow over time. A quick scroll down the page gets you a risk score for flooding and wind, wildfire, extreme heat and air quality. Marketplace's Amy Scott has more. When Leslie Watson and her husband were searching for their first house earlier this year in the San Francisco Bay Area, they had a few priorities. An enclosed backyard for a dog, a spare room for playing video games, and low climate risk. LESLIE WATSON – The main thing that I was the most concerned about was the flooding because there are a lot of creeks that run through the area.

Creeks that flooded during last year's atmospheric rivers. Watson is especially aware of the risks. She's a high school science teacher whose classes address the climate crisis. My kind of opinion is if you're looking for a home now and you're not considering climate risks now and you're not considering climate risks, like you're not really very in touch with what is happening. Turns out most people are thinking about it. Skylar Olson is chief economist at Zillow. One of Zillow's massive recent customer surveys showed that 80% of home buyers consider climate risk in their decisions these

days. She says more than half of new listings on Zillow are at risk of extreme heat. 17% have major wildfire risk and 13% are at risk of extreme flooding, risks that will continue to grow as average global temperatures rise. So there is a rising need for a buyer to have this information when they approach the market and honestly a seller in order to appropriately understand how to price and list their building. The data comes from First Street, a climate risk modeling company, which also provides its risk scores to Redfin, Realtor.com, and

Homes.com. First Street founder Matthew Eby says home shoppers can now also get detailed reports from the company showing how insurance prices and availability might change over time. Matthew Eby – Because that's really what's impacting consumers these days in the most visual and dollars and cents way that people are realizing the impact of climate change. On average, the price of homeowners insurance rose by more than a third between 2020 and 2023

and by more than half in high risk areas. That's according to research by Benjamin Keys at the Wharton School. Insurance is an annual contract and oftentimes home buyers would think that whatever they paid last year is what they'll pay next year. And what we've seen over these last few years is that's simply not the case. Models aren't perfect at predicting where those costs will go, but even a rough idea, Keyes says, will help homeowners make better decisions about what

and where they can afford. That would have been very nice to have when I was house hunting this year. Leslie Watson ended up buying a place in San Leandro, California, and they did pretty well with the information they did have. I'm curious. We look up her risk scores on Zillow. Okay. Flood factor minimal, one out of 10. And then fire factor minimal, one out of 10.

The biggest risk was air quality, but she knew that. They're near an industrial area and right by the Oakland airport. I'm Amy Scott for Marketplace. Coming up. How many times have we seen a reproductive brand step into the market with sports? Not a lot of times I would wager. First though, let's do the numbers. Dow Industrial has nudged up 17 points today, less than a 10%, 42,330. The NASDAQ gained 69 points, about four tenths percent, 18,189.

The S&P 500 pocketed 24 points, about four tenths percent, 57 and 62. DirecTV has finalized the deal to acquire Dish Network. Dish has, of course, been struggling with mounting debt, which DirecTV will now take on along with Dish's streaming brand Sling TV. DirecTV is a private company but shares an Echo Star which owns Dish plunged 11.5%. Today Ford is launching an incentive to make at-home charging easier for new EV buyers, starting in a free charger with a purchase or a lease of a new EV. That comes of course as EV sales have slowed for automakers across the economy. Ford Motor down 2%.

There you're listening to Marketplace. ["The New York Times"] Some of the toughest moments we'll experience in life often come with the hardest financial decisions. Like how much to spend when your pet is dying. Or what to do if you uncover a loved one's financial secrets after they've passed. It's like having this albatross, this monkey on your back that you don't want amongst everything else.

I'm Rima Chreis, host of This Is Uncomfortable, a podcast from Marketplace. This season, we've got a wide range of stories about life and how money messes with it, including the unexpected ways money can shape our journeys through loss and grief. Listen to This Is Uncomfortable wherever you get your podcasts. This is Marketplace. I'm Kai Rizdal. Today is an important day for people with federal student loans. It's the last day for anybody in default on one of those loans to apply for a temporary

relief program. It's also the end of the grace period for loan repayment. The pandemic era pause that officially ended last October. The Biden administration gave borrowers an extra year where they wouldn't be penalized if they didn't make their payments, but that extension is over now too. Marketplaces Smith Field has that one. For the last four and a half years, the student loan system has been in constant flux. When COVID hit, the Trump administration paused payments and stopped interest from accruing. Then the Biden administration kept extending that pause. When payments finally resumed last fall, Betsy Mayotte at the Nonprofit Institute of Student

Loan Advisors says there was still this period where if they fell behind, borrowers wouldn't be reported as delinquent on their credit reports. The idea was that both borrowers and loan servicers needed time to get back in the swing of things. No system in the world, I don't care what your product is, is set up for every single one of their customers, all reentering repayment at exactly the same time. Especially not one with nearly 43 million customers. Jane Fox at the Legal Aid Attorneys Union, UAW Local 2325, says that's how many people

have student loans. Student loan debt is the second highest household debt in the United States. It's second only to mortgage debt. And the grace period is ending at a time of peak uncertainty. Because of legal challenges from Republican-led states, a new affordable income-based repayment plan is on hold, and servicers aren't processing applications for other income-driven repayment programs either. One of the challenges with the student loan system is a lot of complexity that's unclear

for borrowers. Jason Cohn at the Urban Institute says it can be hard to keep up, even when you're paying close attention. And the reality is, most people aren't. There's research that suggests most borrowers don't know income-driven repayment even exists. Research also shows that people who struggle most with repayment are people of color and those who took out student loans but did not get a degree. I'm Samantha Fields for Marketplace. The WNBA playoffs continue this week, semi-finals now, New York Liberty against the Las Vegas

Aces, the Connecticut Sun, and the Minnesota Lynx. It has been highly anticipated this postseason has and is already breaking ratings records. And as women's sports continue to grow, brands are of course looking to tap in. Athletes, teams, and leagues are attracting more sponsorship dollars from a wider range of companies, as Marketplace's Savannah Maher reports. Before every home match, the National Women's Soccer League's Kansas City Current transforms its arena entrance into a fashion runway. They step off their bus to a crowd of fans.

They're to hype their favorite players and get a look at their latest picks from the clothing rental company, Nuuly. The outfits the players wear gets a lot of attention both, you know, in person at the event but also via social media. Kim Gallagher is director of marketing at Nuuly, which shares a parent company with Urban Outfitters and Anthropologie. Nuuly has absolutely no prior dealings with athletes or sports teams. But Gallagher says the brand has been watching women's sports take off and season opportunity, particularly with The Current, which is the first US team to play in a stadium built specifically for a women's soccer club. They are really acting as a trailblazer.

Gallagher hopes the partnership boosts Newley's reputation as a retail innovator and that it can capture some loyalty from The Current's devoted and growing fandom. You see the passion, that's what brands are looking to tap into. David King is VP of partnerships for the WNBA's Minnesota Lynx. When he got started with the team a decade ago, the Lynx were dominating the league and winning titles. The team's NBA counterpart, the Timberwolves, were not. Still, King says most of the Lynx sponsorships came as part of a package deal with brands

that were primarily interested in the men's team. Which I think inadvertently kind of created a little bit of a backseat for the Lynx. Over the last couple of seasons, King has seen a major shift. Now they as a brand, they're leading the conversations a lot of times and we have brands that want to talk exclusively about the links. The wave of new sponsorship money across women's sports comes from big corporate names, the Googles and the Gatorades of the world starting to buy in at levels closer to parity with men's sports. And says Laquita Frederick, CEO of the sports branding firm, the MVP

Lab, from Complete newcomers. What we are seeing is an expansion of businesses and brands entering that market that are like, oh, there's space for me. We're not used to seeing skincare and birth control and vegan snack brand logos on jersey patches, but sports fans also buy that stuff. How many times have we seen a reproductive brand step into the market with sports? Just a few years ago, Frederick says that was unheard of. Now a handful of professional women's teams are sponsored by fertility clinics. They are part of something new. They can be first to market. And stand out among their industry peers.

That's the feeling at the cosmetics company, Urban Decay, the official beauty sponsor of the WNBA's LA Sparks since 2023. General Manager Stephanie Bennett says the brand does players' makeup before media appearances, hands out product samples at Sparks home games. We really rapidly discover that the fans love makeup. And they care a lot about their favorite players' game day beauty routines, like which setting spray they trust to keep their makeup fresh on the court. The players, which some of them have huge following, actually create content for their

audience and surprise and delight with their glam. Benette says this is Urban Decay's first major foray into sports marketing, but not its last. We've just touched the surface. The next stage could be signing individual athletes to its roster of brand ambassadors. I'm Savannah Marr for Marketplace. This final note on the way out today, another calendar item to make note of. We'll get the Joltz report tomorrow. That is, of course, the job openings and labor turnover survey, which I mentioned because Fed Chair Jay Powell said something interesting along those lines today.

He was doing a Q&A after a speech at the National Association for Business Economics, and he was asked about that, Joltz, and here's what he said. If you're out of work now, it's going to be harder to find a job than it was two years ago when the when the labor market was extremely tight, where you would have had multiple employers waiting for you outside the building to give you offers. You know, now it's much more at a normal level, or even perhaps a little bit softer. So the job finding rate is much lower. So by so many measures, the labor market is still solid, but it really has cooled. Jolt's tomorrow, also this week for the labor market, a where among you, the September unemployment report

is gonna be out on Friday. Our daily production team includes Andy Corbin, Lise Hasson, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdahl. We will see you tomorrow, everybody. This is APM. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons

that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money decisions. Listen to Financially Inclined wherever you get your podcasts.