Citing trade wars, the World Bank sharply downgrades global economic growth forecast to 2.3%

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By PAUL WISEMAN, AP Economics Writer

WASHINGTON (AP) — President Donald Trump’s trade wars are expected to slash economic growth this year in the United States and around the world, the World Bank forecast Tuesday.

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Citing “a substantial rise in trade barriers’’ but without mentioning Trump by name, the 189-country lender predicted that the U.S. economy – the world’s largest – would grow half as fast (1.4%) this year as it did in 2024 (2.8%). That marked a downgrade from the 2.3% U.S. growth it had forecast back for 2025 back in January.

The bank also lopped 0.4 percentage points off its forecast for global growth this year. It now expects the world economy to expand just 2.3% in 2025, down from 2.8% in 2024.

In a forward to the latest version of the twice-yearly Global Economic Prospects report, World Bank chief economist Indermit Gill wrote that the global economy has missed its chance for the “soft landing’’ — slowing enough to tame inflation without generating serious pain — it appeared headed for just six months ago. “The world economy today is once more running into turbulence,” Gill wrote. “Without a swift course correction, the harm to living standards could be deep.’’

America’s economic prospects have been clouded by Trump’s erratic and aggressive trade policies, including 10% taxes — tariffs — on imports from almost every country in the world. These levies drive up costs in the U.S. and invite retaliation from other countries.

The Chinese economy is forecast to see growth slow from 5% in 2024 to 4.5% this year and 4% next. The world’s second-largest economy has been hobbled by the tariffs that Trump has imposed on its exports, by the collapse of its real estate market and by an aging workforce.

The World Bank expects the 20 European countries that share the euro currency to collectively grow just 0.7% this year, down from an already lackluster 0.9% in 2024. Trump’s tariffs are expected to hurt European exports. And the unpredictable way he rolls them out — announcing them, suspending them, coming up with new ones — has created uncertainty that discourages business investment.

India is once again expected to the be world’s fastest-growing major economy, expanding at a 6.3% clip this year. But that’s down from 6.5% in 2024 and from the 6.7% the bank had forecast for 2025 in January. In Japan, economic growth is expected to accelerate this year – but only from 0.2% in 2024 to a sluggish 0.7% this year, well short of the 1.2% the World Bank had forecast in January.

The World Bank seeks to reduce poverty and boost living standards by providing grants and low-rate loans to poor economies.

Another multinational organization that seeks to promote global prosperity — the Organization for Economic Cooperation and Development — last week downgraded its forecast for the U.S. and global economies.

How scammers are using AI to steal college financial aid

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By SHARON LURYE, Associated Press Education Writer

It was an unusual question coming from a police officer. Heather Brady was napping at home in San Francisco on a Sunday afternoon when the officer knocked on her door to ask: Had she applied to Arizona Western College?

She had not, and as the officer suspected, somebody else had applied to Arizona community colleges in her name to scam the government into paying out financial aid money.

When she checked her student loan servicer account, Brady saw the scammers hadn’t stopped there. A loan for over $9,000 had been paid out in her name — but to another person — for coursework at a California college.

“I just can’t imagine how many people this is happening to that have no idea,” Brady said.

The rise of artificial intelligence and the popularity of online classes have led to an explosion of financial aid fraud. Fake college enrollments have been surging as crime rings deploy “ghost students” — chatbots that join online classrooms and stay just long enough to collect a financial aid check.

In some cases, professors discover almost no one in their class is real. Students get locked out of the classes they need to graduate as bots push courses over their enrollment limits. And victims of identity theft who discover loans fraudulently taken out in their names must go through months of calling colleges, the Federal Student Aid office and loan servicers to try to get the debt erased.

On Friday, the U.S. Education Department introduced a temporary rule requiring students to show colleges a government-issued ID to prove their identity. It will apply only to first-time applicants for federal student aid for the summer term, affecting some 125,000 borrowers. The agency said it is developing more advanced screening for the fall.

“The rate of fraud through stolen identities has reached a level that imperils the federal student aid program,” the department said in its guidance to colleges.

Public colleges have lost millions of dollars to fraud

An Associated Press analysis of fraud reports obtained through a public records request shows California colleges in 2024 reported 1.2 million fraudulent applications, which resulted in 223,000 suspected fake enrollments. Other states are affected by the same problem, but with 116 community colleges, California is a particularly large target.

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Criminals stole at least $11.1 million in federal, state and local financial aid from California community colleges last year that could not be recovered, according to the reports.

Colleges typically receive a portion of the loans intended for tuition, with the balance going directly to students for other expenses. Community colleges are targeted in part because their lower tuition means larger percentages of grants and loans go to borrowers.

Scammers frequently use AI chatbots to carry out the fraud, targeting courses that are online and allow students to watch lectures and complete coursework on their own time.

In January, Wayne Chaw started getting emails about a class he never signed up for at De Anza Community College, where he had taken coding classes a decade earlier. Identity thieves had obtained his Social Security number and collected $1,395 in financial aid in his name.

The energy management class required students to submit a homework assignment to prove they were real. But someone wrote submissions impersonating Chaw, likely using a chatbot.

“This person is typing as me, saying my first and last name. … It’s very freaky when I saw that,” said Chaw.

The fraud involved a grant, not loans, so Chaw himself did not lose money. He called the Social Security Administration to report the identity theft, but after five hours on hold, he never got through to a person.

As the Trump administration moves to dismantle the Education Department, federal cuts may make it harder to catch criminals and help victims of identity theft. In March, the Trump administration fired more than 300 people from the Federal Student Aid office, and the department’s Office of Inspector General, which investigates fraud, has lost more than 20% of its staff through attrition and retirements since October.

“I’m just nervous that I’m going to be stuck with this,” Brady said. “The agency is going to be so broken down and disintegrated that I won’t be able to do anything, and I’m just going to be stuck with those $9,000” in loans.

Criminal cases around the country offer a glimpse of the schemes’ pervasiveness.

In the past year, investigators indicted a man accused of leading a Texas fraud ring that used stolen identities to pursue $1.5 million in student aid. Another person in Texas pleaded guilty to using the names of prison inmates to apply for over $650,000 in student aid at colleges across the South and Southwest. And a person in New York recently pleaded guilty to a $450,000 student aid scam that lasted a decade.

Identify fraud victims who never attended college are hit with student debt

Brittnee Nelson of Shreveport, Louisiana, was bringing her daughter to day care two years ago when she received a notification that her credit score had dropped 27 points.

Loans had been taken out in her name for colleges in California and Louisiana, she discovered. She canceled one before it was paid out, but it was too late to stop a loan of over $5,000 for Delgado Community College in New Orleans.

Nelson runs her own housecleaning business and didn’t go to college. She already was signed up for identity theft protection and carefully monitored her credit. Still, her debt almost went into collections before the loan was put in forbearance. She recently got the loans taken off her record after two years of effort.

“It’s like if someone came into your house and robbed you,” she said.

The federal government’s efforts to verify borrowers’ identity could help, she said.

“If they can make these hurdles a little bit harder and have these verifications more provable, I think that’s really, really, really going to protect people in the long run,” she said.

Delgado spokesperson Barbara Waiters said responsibility for approving loans ultimately lies with federal agencies.

“This is an unfortunate and serious matter, but it is not the direct or indirect result of Delgado’s internal processes,” Waiters said.

In San Francisco, the loans taken out in Brady’s name are in a grace period, but still on the books. That has not been her only challenge. A few months ago, she was laid off from her job and decided to sign up for a class at City College San Francisco to help her career. But all the classes were full.

After a few weeks, Brady finally was able to sign up for a class. The professor apologized for the delay in spots opening up: The college has been struggling with fraudulent applications.

The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Reefer Madness Returns to Texas with Dan Patrick’s THC Ban

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Marijuana prohibition is a Texas tradition. Unless Governor Greg Abbott vetoes Senate Bill 3, the state’s new ban on THC, the state is about to suddenly and drastically renew its commitment to that tradition—at a potential cost of thousands of jobs, billions of dollars in lost taxable revenue, and countless lives broken in the prison system. 

“We have to look at a long history in Texas,” said Austin Zamhariri, executive director of the Texas Cannabis Collective. “The modern enforcement of marijuana prohibition that exists today, that system began in Texas in 1915 in El Paso. It was the very first city in the entire country that prohibited marijuana.”

Zamhariri offered this historical perspective by way of explaining why our state is so eager to close the legal loophole that accidentally created a booming market for THC products about six years ago. “These systems have existed for 110 years,” he said. 

After becoming pioneers in prohibition, it’s perhaps not surprising that Texas has lagged behind the rest of the country on marijauna legalization. Almost half the country—24 states and Washington, D.C.—have some form of legal recreational marijuana. The Texas government never intended to become one of those states, but hemp legalization changed all that. 

Following a federal agriculture bill that allowed for commercial production of hemp, Texas enacted a law that legalized hemp in 2019, intending to open up a new agricultural market and the many potential uses of the plant for food, fiber, and construction materials. Hemp is legally defined as a form of the cannabis plant that contains less than 0.3 percent of THC, well below the threshold to make a person feel high. But that rigid definition failed to account for human ingenuity when it comes to getting stoned. 

By the time the Legislature convened this year, the state was flooded with largely unregulated THC products, many of which are functionally almost identical to marijuana but technically legal. Their usage has been normalized in our state, where many residents now see cannabis consumption as an alternative to alcohol or prescription drugs.

One of Lieutenant Governor Dan Patrick’s top priorities for the 89th legislative session included a total ban on these THC products. That draconian push—which Patrick framed as a necessity to protect kids—for prohibition took many people by surprise. 

“There’s not a place in Texas where cannabis has not become normalized through this,” Zamhariri said. “People just kind of assumed this is a thing, you know, we finally actually have access.”

For the hemp industry and Texas cannabis consumers, the past five months and change have been full of dashed hopes, as they first fought (unsuccessfully) to stop the Senate from passing a total ban bill back in March and then tried to influence the details of the Texas House’s more moderate version that sought to restrict and regulate the industry rather than ban it outright. Then, in the final days of the session, when the House took up its version of SB 3 on the floor, a majority of Republicans voted to approve an amendment by state Representative Tom Oliverson—an ally to the lieutenant governor—that brought the bill back in line with the Senate’s total ban.

Oliverson, who is an anesthesiologist, insisted the extreme move was necessary to protect Texans. “In pain management, self-medication is the first step in treatment failure, and the unregulated hemp market is a hazard to these Texas patients,” he told the Texas Tribune

The effects will be far-reaching. The state hemp industry economic study estimates that the ban could cost over 50,000 jobs and about $5.5 billion in annual sales revenue. SB 3 bans popular products like THC-infused gummies, joints, vapes, and beverages, but industry experts worry that even products that have been commonplace and legal in Texas for years, like CBD oil or even edible hemp seeds (neither of which cause mind-altering effects), could still be caught up in the ban because of minute amounts of THC. 

Sarah Todd, a former cannabis business owner, broke down in tears as she described the impact not just to operations like hers but to Texans who she says have greatly benefited from the easy availability of cannabis. 

“I’m so devastated because this rolls back so many years of social acceptance, even here in Texas, where we have been so far behind on changing cannabis policy,” Todd told the Texas Observer.

Like so many other stakeholders, Todd spent many hours throughout the legislative session at the Capitol, meeting with lawmakers, testifying, and advocating for a more moderate version of the bill that would ban some (admittedly profitable) products like vapes while retaining recreational (but highly regulated) access to gummies, beverages, and other edibles.

“There was a huge, huge turnout from the hemp industry. Even though the regulations weren’t great, they were workable,” Todd said of the provisions in the earlier House version. 

According to the lieutenant governor, unsafe products are being marketed and sold to children by shady vendors at gas stations and smoke shops alike, and only a total ban can protect Texans. “We are not going to allow these retailers to circumvent the law and put Texans’ lives in danger,” Patrick told CBS in December.

Cannabis advocates like Heather Fazio, director of the Texas Cannabis Policy Center, argued that there are thousands of responsible hemp vendors in the state that have policies in place to prevent selling to underage buyers. In one widely publicized incident, a THC store employee refused to sell to Patrick himself without an ID. It’s a practice already commonplace in the industry, especially in upscale dispensary-style stores.

Fazio emphasized, “We have 8,000 retailers selling hemp products to mostly adult consumers, by choice.” Still, in the unregulated Texas THC market, there is no age restriction for purchasing THC products, and industry representatives at the Capitol were quick to acknowledge the need to establish clear rules that stop sales to minors, regulate currently unregulated products, and otherwise push out bad actors. “[The lack of an age restriction] is what has driven so much of the concern for change recently, as well as synthetic products that have made their way on the market.”

While the state’s nascent hemp industry broadly agrees on the need for regulation, many differ on where to draw the line.

“This industry has really grown and is starting to achieve some maturity, and there’s so many good actors and quality products on the market that this [ban] is going to devastate them,” Fazio said. “This is going to devastate their livelihood.”

Rather than eliminate demand, Fazio said that buyers would instead turn to the black market. “These products are legal, either cannabis or hemp, in all 49 other states so there’s no shortage of supply. So now what you’ve done is shift the demand from the legal market to the illegal market,” she said. “Who loves this the most are criminals and the cartels, because all the profit just got put right into their pockets.”

The backlash to the Patrick-led THC ban has come from across the spectrum—including, perhaps unexpectedly for the lieutenant governor, from many on the MAGA right. 

Since SB 3’s passage, the hemp industry and other THC advocates have been in a media war with Patrick as they each try to influence Governor Abbott, who has the power to sign the ban into law or veto it by June 22. Near the end of the session, Patrick held an impromptu press conference in which he laid out an array of THC treats on a table, spewed misinformation about some of the products, challenged press members to eat any of them (tossing a bag at the crowd), and lashed out at a Houston Chronicle reporter. Patrick said the ban was necessary to “save an entire generation” from “being hooked on drugs.”

Calls and letters from hemp industry advocates as well as military veterans’ groups have flooded the governor’s phone lines and offices urging Abbott to veto the bill. 

There’s some precedent for Abbott to use his veto pen on this. In June 2024, Florida Governor Ron DeSantis vetoed a similar bill that banned or restricted THC products. In a message accompanying the veto, DeSantis stated that the bill would “impose debilitating regulatory burdens on small businesses and almost certainly fail to achieve its purposes.” As governors of two red mega-states (both without legal recreational weed), Abbott and DeSantis have repeatedly sought to outdo each other on right-wing issues du jour

Lawsuits to block implementation of the bill are also likely. An injunction issued in a lawsuit in 2021 managed to block implementation of a statewide policy that would have banned sale of smokable hemp products, giving some hope for a similar outcome with the THC ban, especially since SB 3 varies so dramatically from federal laws around hemp. 

João Mitchell, general manager of ATX Organics, which operates a pair of Austin dispensaries selling hemp-based THC and CBD products, admitted that they would struggle to remain in business under the new law. Currently, they employ 15 people, all of whom make at least $20 per hour, he said. Mitchell said he is going to “hope and pray that the lawsuit goes through,” otherwise they would be forced to move the business, or worse. 

“Honestly, we’re probably more likely to shut down than we are to stay here in Texas and operate under [SB 3],” he told the Observer.

Aaron Owens, owner and lead farmer of Tejas Tonic, which makes low-dose THC beverages, said they were determined to adapt to the new law, even if it means changing their recipe and business model. He believes that the natural terpenes (flavor compounds) and essential oils in hemp can still benefit consumers, even with THC cut out of the picture.

“We’re going to continue to cultivate hemp, which this bill did not ban,” he said. “If we have to adjust our formulas to be compliant, we will continue to do that, and we’ll stay within the law, but we’re going to keep pushing, and we’re going to keep bringing the most effective products that I know how to create.”

Despite supporting a total ban on recreational THC, Patrick also backed HB 46, an expansion to the Texas Compassionate Use Program (often referred to by its initials as “teacup”), which is the state’s existing medical marijuana program.The TCUP expansion bill increases the number of licensed vendors allowed, allows for more pickup locations, and also adds chronic pain to the list of medically qualifying conditions—though that list is still stricter than those in many other states with similar programs. 

Morgan Miller was another frequent visitor to the Capitol this session, testifying about her use of hemp-based THC products to treat side effects of her chronic migraines. Chronic migraine sufferers have at least 15 days with headaches and migraine symptoms per month, and Miller said that hemp products help her calm her body down, stimulate her appetite, and ease bodily inflammation. It’s also helped her replace alcohol, which was hurting her liver alongside her migraine medication, with hemp-based THC drinks. 

“My quality of life is going to be down the drain,” Miller told the Observer. “It’s not only that I want hemp products, but I genuinely need them for my health and for my mental health.”

She said she “can’t really imagine” a world where she can no longer go to her neighborhood dispensary for hemp edibles and drinks. “I’m honestly really afraid of what my life is going to look like moving forward if this ban goes all the way through.”

The post Reefer Madness Returns to Texas with Dan Patrick’s THC Ban appeared first on The Texas Observer.

Disney to pay almost $439 million to take full control of streaming service Hulu

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By MICHELLE CHAPMAN, Associated Press Business Writer

Disney will pay Comcast’s NBCUniversal nearly $439 million for its stake in Hulu, taking full control of the streaming service.

The move closes out an appraisal process that’s dragged on for a few years. Disney said in November 2023 that it was acquiring a 33% stake in Hulu from Comcast for at least $8.6 billion. That amount reflected Hulu’s guaranteed floor value of $27.5 billion, according to a regulatory filing.

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Disney has run Hulu since 2019, when Comcast ceded its authority to Disney and effectively became a silent partner.

Hulu began in 2007 and quickly evolved into as a service backed by entertainment conglomerates who hoped to stave off the internet with an online platform for their own TV shows. Disney joined in 2009, planning to offer shows from ABC, ESPN and the Disney Channel. A decade later, Disney gained majority control of the business when it acquired 21st Century Fox.

Disney said in a regulatory filing on Monday that its appraiser arrived at a valuation below the guaranteed floor value during the initial phase of the appraisal process, while NBCUniversal’s appraiser arrived at a valuation substantially in excess of the guaranteed floor value.

A third appraiser was brought in and concluded that The Walt Disney Co. will pay $438.7 million for the Hulu stake.

“We are pleased this is finally resolved. We have had a productive partnership with NBCUniversal, and we wish them the best of luck,” Disney CEO Bob Iger said in a statement. “Completing the Hulu acquisition paves the way for a deeper and more seamless integration of Hulu’s general entertainment content with Disney+ and, soon, with ESPN’s direct-to-consumer product, providing an unrivaled value proposition for consumers.”

The transaction is anticipated to close by July 24. It’s not expected to impact Disney’s fiscal 2025 adjusted earnings forecast.

Shares of Disney rose slightly in morning trading on Tuesday.