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When Joe Biden left office last month, he did so having forgiven more student loan debt than any of his predecessorsa total of $188.8 billion for 5.3 million borrowers over his four-year term. And yet, at the end of 2024, the total outstanding federal student loan debt was roughly $1.7 trillion, held by nearly 43 million borrowers. Thats more than when Biden took office. So, despite a four-year stretch during which the Biden administration actively forgave billions, it seemingly didnt put a dent in the overall student debt balance. How can that be? Its complicated, and there were several factors at play. For one, there was a long pause in student loan repayments due to the pandemic, during which borrowers were not required to make any payments and their loans didnt accrue any interest, for a roughly three-and-a-half-year period between March 2020 and September 2023. During that time, borrowers were still able to borrow, adding to overall debt counts, but payments werent coming in to counteract it. The net effect? Total debt tallies increased. Additionally, college tuition and fees have continued to rise at an average of 7% annually over the past 20 years. Those additional costs mean that each years new crop of borrowers are taking on more debt than the ones before them, and many of those new borrowers are years away from starting repayments, presumably after they earn their degrees and enter the workforce. Why Biden’s loan forgiveness didn’t lower aggregate student debt In all, the Biden administration forgave around 12% of outstanding student federal loan debt, says Mark Kantrowitz, a higher education and financial aid expert. But the total forgiveness was only $188 billion, which is the amount of new debt that accumulates in about two years. So, it was a two-steps forward, one-step back situation, he says. In other words, the crosscurrents at playmore debt, less progress in paying down current debt, and Bidens forgiveness programsled us to a place where more debt accumulated over the past four years. We also dont know how many people are actively repaying their loans after the pandemic-era pause, as the data has yet to be released, Kantrowitz says. But he does think that were likely to see total student debt levels increase with Trump back in office. Thats because theres likely to be fewer, if any, new forgiveness programs, a scaling back of existing programs, and perhaps more lender-friendly legislation. Effectively, the environment could be the opposite of the Biden era’s. What’s causing the student loan crisis? Bidens measures, which were of a higher caliber than any of his predecessors’, werent enough to reverse the total debt balance from rising. Getting to the heart of the issue may require looking deeper at what’s actually causing the student loan crisis. According to a September 2024 analysis by academic researchers Adam Looney and Constantine Yannelis and published by the Brookings Institution, part of the problem may be unintended consequences. The federal government wanted to make college degrees more affordable and attainable to more Americans, so it changed federal aid rules allowing for more people to access funding to pay for school. While those were noble aims, it isnt necessarily what happened. This led to rising enrollment of relatively disadvantaged students, but the increase was primarily at poor-performing, low-value institutions whose students systematically failed to complete a degree, struggled to repay their loans, defaulted at high rates, and floundered in the job market, the report reads. “As these new borrowers experienced similarly poor outcomes, their loans piled up, loan performance deteriorated, and with it the finances of the federal program. Kantrowitz agrees that students failing to earn their degrees is likely a focal point of the issue. Im not one of those people who believe that theres a student loan problem that needs to be fixed, he says, so much as that we have a college completion problem. He claims that the borrowers who generally have trouble repaying their loans and end up in dire financial situations as a result are those who take on debt, but dont graduatethey pay a financial penalty but dont reap the rewards in terms of career and earning opportunities that a college degree provides. With that in mind, Kantrowitz thinks that getting students to actually graduate may be the single biggest step we can take to help ease the pain of overall student debt balances. What we need to do is find better ways to get students to the finish line, he says. If they get a degree that has value, they should be able to repay the student loans.
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E-Commerce
Chipotleone of the original and most influential fast-casual spots in the countryjust hit a major milestone. In 2024, they opened 304 new restaurants, marking the highest number of openings in a single year in their franchise history, according to a Tuesday earnings call. For a bit of context, they opened 271 locations in 2023, and in the two years before that, they were hovering just above 200 each year. And the growth isn’t slowing downthey’re planning to open between 315 and 345 new restaurants in 2025. The fast-casual juggernaut also reported a total revenue of $11.3 billionan increase of 14.6% from last years $9.9 billion. The chains operating margin and diluted earnings per share also increased. Chipotle had another outstanding year, CEO Scott Boatwright said during the call. “I want to make sure that as we continue to scale Chipotle, everything we do is in service of our guests or those who serve our guests. While Chipotle excelled in 2024, many fast-casual competitors struggled to stay afloat, with many beloved chains shutting down or filing for bankruptcy in the past year. The majority of Wahlburgers locations shut down in January after its partnership with midwestern grocery store Hy-Vee ended. Roti, a chain that pioneered mediterranean-style fast casual, filed for Chapter 11 bankruptcy protection in August. Red Lobster and Buca di Beppoboth former giants of their fieldalso filed for bankruptcy last year. But other competitors like Cava and Sweetgreen have experienced record highs similar to Chipotle. Overall, comparable restaurant sales still increased by 7.4%, a little more than half of Chipotles growth. And Chipotles expansion comes at a time of reinvention for the restaurant that transformed fast-casual from a concept to a cultural zeitgeist with its fully customizable Mexican-style entrees. After Chipotle dealt with an onslaught of food safety scares from 20152018, CEO Brian Niccols stepped indoubling the brands revenue over five years. He added loyalty programs, drive-throughs, delivery options, and even robot chefs to the chains repertoire of enticing customer-facing features. But Niccols abruptly left the position in September to run Starbucks, leaving former COO Boatwright as his successor. Since Boatwrights ascension, the company raised menu prices, drawing consumer outrage, after promising to increase portions. The company has also struggled with adjusting wages to inflation. Boatwight said on the earnings call that long-term goals for the company include reaching 7,000 total restaurants in North America (there are currently 3,700 worldwide) and becoming a global iconic brand.
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E-Commerce
It’s almost become cliche for employers to express concern about Gen Z’s lack of training in the social skills necessary for life in the office. Employers want new recruits with a certain level of professionalismthe ability to casually converse with office higher-ups, or negotiate with their own managersthat they just haven’t had the ability to practice, especially after coming of age during pandemic restrictions and widespread remote work, says Tigran Sloyan, CEO of worker assessment and learning platform CodeSignal. “When you’ve just come out of college, you’ve never really worked anywhere, so it’s very hard,” he says. To help fill that gap, CodeSignal on Wednesday launched an AI-powered addition to its platform that will let users practice skills involving business conversation on their own and confer with an AI assistant and coach called Cosmo. CodeSignal already let users practice technical skills like writing code in a simulated development environment, but the new addition will let them similarly practice skills like negotiations, giving feedback, and holding sales calls. Universities have also participated in beta testing, letting students applying for jobs practice talking with simulated recruiters. Employers can customize practice scenarios based on employee needs, like letting budding salespeople pitch their companies’ own specialized products, and AI conversational partners can become tougher to handle as workers level up their skills, Sloyan says. “It will get more and more and more difficult as you progress through your skills,” he says. CodeSignal is one of a number of companies that have rolled out AI systems to let employees develop skills that previously could only be practiced by roleplaying with other humans, find other educational opportunities, and demonstrate their aptitude for particular roles. They’re not just for entry-level employees. People taking on new positions, like those entering management, can also benefit, as can anyone looking to brush up on particular skills they’re already using, AI developers say. After all, some studies have suggested the majority of managers received no formal training for their jobs after moving up from other roles. “We’ve all been managed by bad managers,” says Sloyan. “And it’s for a good reasonbecause they never get the training.” AI technology, which can help assess worker experience and adapt lessons to individual needs, is also helping drive a shift to hiring and training employees based on very particular social and technical skills they need for their roles, whether that’s making sure managers know how to have difficult conversations with underperforming employees or coders know how to efficiently work with databases. “I think the beauty of it is its ability to create learning content at scale and speed,” says Ravin Jesuthasan, global transformation leader at consulting firm Mercer. Skills-based hiring is often seen as a way to get access to a broader talent pool than traditional indicators of aptitude like a college degree, and skill-focused training can let employees keep up to date even as their positions evolve due to technological and societal changes like the rise of AI and hybrid work. AI can help measure what skills employees already have, then create or locate highly targeted course material to fill in any gaps. “Instead of you sitting in a class with everyone else going through two months of training, you’re maybe spending three days or something because you’ve got a lot of those technical skills,” Jesuthasan says. In the past, while employers might have offered access to training materials like videos, written materials, and podcast-style audio, workers could feel overwhelmed by the possibilities and unsure how to fit learning in between work tasks, says Kian Katanforoosh, CEO and founder of skills assessment company Workera. In September, the company unveiled an AI mentor called Sage that can give employees quick and (ideally) fun skill assessments using a variety of interfaces. Those include a virtual coding workpad, a voice interface, and an on-screen whiteboard for presenting ways to connect ideas and concepts. The results can help route staff to particular projects or to personalized training options. Those can include some instruction from Sage itself, though Workera generally connects users to coursework from across a variety of learning platforms, matched to individual needs, Katanforoosh says. “Some providers have really good metadata which allow us to have the transcripts of every course and understand videos at a transcript level, and be able to say this is a good video or not for the user,” he says. And when AI itself provides interactive training, it has the advantage of being available on demand around the clock to tirelessly generate practice material for different skills and scenarios. A company called Alelo works with employers and training firms to create AI-powered educational material, where workers can practice skills interacting with digital avatars, then receive feedback generated by another specialized AI model. Healthcare training is a common use case, with nurses and others in the field practicing patient interactions, says Lewis Johnson, the company’s president and CEO. Scenarios, which can include short sessions where health providers demonstrate their ability to express empathy for a patient in pain or longer interactions that simulate an entire patient interaction, are meant to be repeated. Typically, users are intended to practice a particular training at least five times, then repeat them as needed later on to keep skills fresh, Johnson says. [Screenshot: Alelo] “Part of the goal here is to encourage learners to practice as much as they need in order to gain proficiency,” he says. “Each run may be somewhat different, so this really encourages people to keep practicing until they’re comfortable and able to fully meet the training objectives.” Employers or training organizations get access to dashbards that let them see at a glance how employees are advancing through the training. In general, AI instructional tech can help save time for employers by automating training, assessment, and development of learning plans for staff. In October, learning platform Udemy announced a new AI assistant to guide learners to relevant material, and a Skills Mapping system that can help identify employee skills needing an upgrade within an organization. The AI then provides a custom “learning path” of instructional material to get workers trained. “Skills Mapping has significantly reduced the median time needed to create a public learning path, slashing it by more than 80%,” writes Eren Bali, Udemy’s cofounder and CTO, in an email. “Notably, over one-third of paths created by organizations since the launch have been AI-powered paths, indicating Skills Mappings impact on efficiency and performance.” Still, AI training likely won’t eliminate traditional mentoring and instruction any time soon. Training company Mursion, known for its avatar-based training experiences powered by human actors, recently introduced a fully AI-powered alternative. It lets workers practice skills at any time, without Mursion needing to ensure its own staff are available, which is especially important for clients training employees in environments like restaurants or warehouses where downtime may be unpredictable, says CEO Mark Atkinson. “It’s just impossible to build a staffing model that knows that we need to be ready at that moment,” he says. [Photo: Mursion] The company’s simulations can help train service workers in techniques like conflict de-escalation and dealing with challenging customers, Atkinson says, and Mursion also helps employees in management, healthcare fields, and sales practice techniques relevant to their work. Avatar-based simulation in general can help employees practice types of uncomfortable scenarios that could feel too awkward or embarrassing for traditional in-person role play, he says, and generative AI has proven adept at consistently simulating particular behaviors for employees to practice responding to. It’s also beginning to play a role in Mursion’s human-directed simulations, automatically and consistently scoring participant performance. That, in turn, lets Mursion’s human simulation leaders focus on playing their roles rather than evaluating responses. They’ll keep playing those roles for the foreseeable future, Atkinson says, since they can offer a level of narrative variety and adaptability that AI can’t currently easily match. “I’m not saying it won’t ever happen, but the way I see it is the AI is pushing us to be better at the human [side], while delivering an incredibly valuable, on-demand experience for those who want that,” he says. But as the workplace continues to evolve, and new generations of workers continue to graduate and seek employment, then move into management or other new roles, AI seems likely to also be on hand to guide and, sometimes, even conduct their training. After all, while Gen Z is currently being called out for a lack of workplace savvy, it wasn’t too long ago that employers said similar things about millennials starting their first full-time jobs. “These are skills that we somehow expect that the younger generation would just come out of school knowing but they don’t, because they’ve never really had the chance to practice,” Sloyan says.
Category:
E-Commerce
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