Markus Andrews

Amid ongoing FAFSA issues, criticism of the U.S. Department of Education has reached a fever pitch.
Former top student loan official Wayne Johnson accused the Education Department of “malicious negligence” in a letter written to U.S. Secretary of Education Miguel Cardona and other senior officials and shared with CNBC.

As problems with the new Free Application for Federal Student Aid persist into the spring, harsh words are being directed at the U.S. Department of Education.
Former top student loan official Wayne Johnson accused the Education Department of “malicious negligence” in a recent letter written to U.S. Secretary of Education Miguel Cardona and other senior officials and shared with CNBC.

“Continuing to whitewash this evolving calamity with ‘corporate style crises management PR’ is extraordinarily irresponsible,” wrote Johnson, who served as the chief operating officer of the Office of Federal Student Aid from 2017 until 2019 and is now running for Congress.
“Each of you is personally and collectively responsible for what is manifesting to be a level of incredible harm inflicted upon students and schools,” Johnson wrote.
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Johnson had a “brief” tenure as COO of FSA, a department spokesperson told CNBC of his correspondence, “during which time none of the changes he now talks about were successfully implemented.”
“We will also note that the FAFSA Simplification Act requires not just a new form but a complete overhaul of the formula and process for delivering financial aid to students,” the department spokesman added.

A separate group of Republican lawmakers also has requested a federal inquiry into the rollout and whether students were given sufficient information on the new process.
To be sure, the overhaul was a “major” undertaking imposed by Congress without additional funding or resources, a senior Education Department official said on a January press call. “Our ‘North Star’ here is trying to make sure that students get the help they need for college.”

‘Any further delays would be disastrous’

The FAFSA serves as the gateway to all federal aid money, including loans, work study and grants, the latter of which are the most desirable kinds of assistance because they typically do not need to be repaid.
However, this year, fewer students are applying for financial aid, data shows, as the U.S. Department of Education works to resolve ongoing technical issues with the new form, including preventing contributors without a Social Security number from starting or accessing the application.
“This adds to the growing list of can’t-miss priorities that the Department must deliver in the month of March, a timeline students and institutions desperately need the Department to meet,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “Any further delays would be disastrous for both students and schools.”

They’ve been accepted into schools and they don’t know if they can afford it — that’s a problem.

Lydia McNeiley
college and career coordinator in Hammond, Indiana

Award letters are typically sent around the same time as admission letters so students have several weeks to compare offers ahead of National College Decision Day on May 1, which is the deadline many schools set for admitted students to decide on a college.

Especially ‘scary’ for those depending on aid

For most students and their families, which college they will choose hinges on the amount of financial aid offered and the breakdown between grants, scholarships, work-study opportunities and student loans.
“They’ve been accepted into schools and they don’t know if they can afford it — that’s a problem,” said Lydia McNeiley, a college and career coordinator for the public school district in Hammond, Indiana. “It’s not fair across the board, but for those that are depending on that financial aid letter, this is scary.”
In Hammond, most high school seniors are first-generation college applicants who would qualify for aid but have hit obstacles with the 2024–25 form, McNeiley said.
“The message that they are getting is that they have to prove that they deserve to be on those campuses,” she said. “It’s really a slap in the face.”

Because of the extensive delays, many colleges are now relying on their own calculations to determine student aid packages, which could open the door to issuing financial aid award offers that schools may not be able to honor or “cause tens of billions of dollars in improper payments,” Johnson wrote.
“Moreover, it is highly probable that FAFSA related systems failures will continue to further disenfranchise large populations of students into 2025-2026,” Johnson added in his letter, underscoring how important the awarding of federal student financial aid is to driving college enrollment.
Johnson equated the potential impending enrollment decline to the one experienced at the height of the Covid-19 pandemic, when college attendance notched the largest two-year drop in 50 years.

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The Biden administration announced it would forgive $5.8 billion in student debt for 77,700 borrowers through the Public Service Loan Forgiveness program.
It also said President Joe Biden would email another 380,000 public service workers, notifying them that they’re on track to have their debt canceled within two years.

U.S. President Joe Biden announces a preliminary agreement with Intel for a major CHIPS and Science Act award, during a visit to the Intel Ocotillo Campus, in Chandler, Arizona, U.S., March 20, 2024. 
Kevin Lamarque | Reuters

The Biden administration announced Thursday it would forgive $5.8 billion in student debt for 77,700 borrowers through the Public Service Loan Forgiveness program.
It also said President Joe Biden would email another 380,000 public service workers starting next week, notifying them that they’re on track to have their debt canceled within two years.

The U.S. Department of Education has routinely announced waves of loan forgiveness, as the Biden administration seeks to use its existing authority to leave people with less debt after the Supreme Court struck down its sweeping $400 billion loan forgiveness plan last June. The Biden administration has so far cleared the education debts of nearly 4 million people, totaling $143.6 billion in relief.
“For too long, our nation’s teachers, nurses, social workers, firefighters, and other public servants faced logistical troubles and trap doors when they tried to access the debt relief they were entitled to under the law,” U.S. Secretary of Education Miguel Cardona said in a statement about the latest round of forgiveness.
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The PSLF program, signed into law by President George W. Bush in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. In 2013, the Consumer Financial Protection Bureau estimated that one-quarter of American workers may be eligible.
However, the program had long been plagued by problems, making people who actually received the relief a rarity. Borrowers complained about confusing rules and misinformation from their servicers.

The Biden administration has worked to fix those issues.
Before Biden’s fixes to PSLF, just around 7,000 borrowers had received debt relief through the over 15-year-old program, according to the administration. Since 2021, it said, 871,000 borrowers have now had their debt canceled under the program.

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Bitcoin’s recent rise has contributed to investor FOMO, or the fear of missing out.
While bitcoin should be handled with care, investors should use the same investment principles applied to other positions.
The goal is to incorporate a repeatable process, so you have less fear and avoid missing out.

Photographer, Basak Gurbuz Derman | Moment | Getty Images

When it comes to investor maladies, fear of missing out, or FOMO, is the clinical term for buying a security after a meteoric price increase because you don’t want to be left behind. There is no known cure for this condition, which has been linked to numerous bad investment decisions.
Bitcoin caught the attention of investors in 2020 because the price skyrocketed from $7,194 a coin to a peak of $60,360 in November 2021. Just as we became comfortable with digital gold, the price declined all the way back to $16,547 at the end of 2022.

Today’s environment is déjà vu all over again, a feeding frenzy of quick profits that few of us want to miss out on.

More from CNBC’s Advisor Council

Last week, bitcoin climbed to a record $73,679, a price surge of nearly 70% from the start of the year. Prices have since eased somewhat: As of early Wednesday, the flagship currency was trading at around $62,500, due in part to the news Tuesday that Japan raised interest rates for the first time in 17 years.

How does monetary policy influence bitcoin?

The value proposition for bitcoin is that it serves as a store of value because there will only be a maximum of 21 million bitcoins available. When you buy bitcoin, you are exchanging something in abundance, namely a dollar, for something that is scarce, which in this case is bitcoin.
When the Fed increased liquidity in 2020 the case for bitcoin was obvious. Similarly, once the Fed reversed course and raised rates in 2022 the opposite dynamic occurred.
In other words, bitcoin’s price will be heavily influenced and correlated to the global money supply.

Why did bitcoin go up last year?

You can make the case that the Fed reduced the rate at which it tightened, which on a rate of change basis increased liquidity. Moreover, the banking crisis forced the Fed to open the discount window first and then create a Bank Term Funding Program that allowed regional banks to pledge illiquid bonds as collateral in exchange for much needed liquidity. These events were tailor made for the scarcity trade.

Where do things stand today for bitcoin?

There are a couple of things to consider when deciding if it’s too late to buy bitcoin.
First, what do investors believe will happen to liquidity? Or said another way, will the Fed accelerate a campaign of tightening?
Inflation may be sticky, but it’s not high enough to warrant a rate hike. If anything, investors are anticipating a rate cut. There is also a matter of the commercial real estate loans that come due this year and concerns about the regional banks that may force the Fed to provide resources that mitigate a contagion.

Second, bitcoin has been approved as a spot ETF. If bitcoin is indeed a hoax it must have quite the sales pitch because stalwarts such as Schwab, Fidelity, Van Eck and Blackrock are all on board, the SEC notwithstanding.
In fact, Grayscale’s 2021 Bitcoin Investment Survey found that 77% of investors who did not own bitcoin would be more likely to buy it if there were an ETF, and according to a recent Coinbase report, 59% of institutional investors plan to increase allocations to crypto over the next three years. Lo and behold, bitcoin ETFs have attracted over $3.5 billion in new inflows in March as of this writing, the supply and demand dynamic pushing the price higher.

What’s the best way to participate?

While bitcoin should be handled with care, investors should use the same investment principles applied to other positions. If a security is significantly more volatile than the market, it makes sense to hold a smaller position.

It’s advisable to dollar cost average 1% at a time until you reach the position size that suits your risk tolerance. Once you are fully invested, make sure to rebalance quarterly to mitigate the roller coaster ride and ensure that you participate on the upside.
The goal is to incorporate a repeatable process, so you have less fear and avoid missing out. Fortunately, the same investment methods you use for a traditional portfolio are applicable to bitcoin as well.
— By Ivory Johnson, certified financial planner and the founder of Delancey Wealth Management in Washington, D.C. He is a member of the CNBC Financial Advisor Council. More

Women and Wealth Events
Your Money

Nearly two-thirds of the country’s outstanding student debt is held by women.
CNBC spoke to student loan and financial experts about how women can best manage their education debt.

10’000 Hours | Getty Images

Nearly two-thirds of the country’s outstanding student debt is held by women.
Women graduate college owing $2,700 more, on average, than their male counterparts, according to the American Association of University Women. Among undergraduate students in bachelor’s degree programs in 2019-2020, 54% of men graduated with student loans, compared to 66% of women, according to higher education expert Mark Kantrowitz.

One major reason women tend to borrow more, experts say, is the fact that they often face additional caretaking responsibilities that can leave them with higher expenses and less able to work while they’re in school.

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Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

After graduation, men also typically pay down their student debt faster, since they earn more. Men with a bachelor’s degree pull in a median weekly earnings of $1,632, compared with $1,248 for women, the U.S. Department of Labor has found.
“We find that women borrowers tend to have multiple financial pressures that contribute to their student loan struggles,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt.
“Over 63% of the borrowers that reach out to us for advice are women,” Mayotte added.
CNBC spoke to Mayotte and other student loan and financial experts about how women can manage their education debt.

Make the most of federal relief for borrowers

There used to be a working mother and parental leave deferment for student loans, but these options are not available for more recent borrowers, Kantrowitz said. (If your federal student loans were disbursed prior to July 1, 1993, you could still qualify.)
Still, there are ways to pause your loan payments if you’ve hit an especially hard patch financially, he said.
If you’re out of work, you can request an unemployment deferment with your servicer. If you’re dealing with another financial challenge, meanwhile, you may be eligible for an economic hardship deferment.
Those who qualify for a hardship deferment include people receiving certain types of federal or state aid and anyone volunteering in the Peace Corps, Kantrowitz said.

With both a hardship and an unemployment deferment, interest generally doesn’t accrue on undergraduate subsidized loans. Other kinds of loans, however, will rack up interest.
The maximum amount of time you can use an unemployment or hardship deferment is usually three years, per type. Other, lesser-known deferments include the graduate fellowship deferment, the military service and post-active duty deferment and the cancer treatment deferment.
Student loan borrowers who don’t qualify for a deferment may request a forbearance.
Under this option, borrowers can keep their loans on hold for as long as three years. However, because interest accrues during the forbearance period, borrowers can face a larger bill when it ends.
A better option for federal student loans may be enrolling in an income-driven repayment plan, experts say. Those plans cap your monthly bill at a percentage of your discretionary income and forgive any of your remaining debt after 10 or 25 years.
To determine how much your monthly bill would be under different plans, use one of the calculators at Studentaid.gov or Freestudentloanadvice.org.

Use a ‘hybrid approach’

It’s deflating for women to have to direct all their extra cash to their student debt, said certified financial planner Cathy Curtis, founder and CEO of Curtis Financial Planning in Oakland, California.
“I like to recommend a hybrid approach,” said Curtis, who is a member of CNBC’s Financial Advisor Council. “Even if a person puts a small amount towards each goal, they can feel less anxious about their finances and know that they are doing the right things with their money.”
Because federal student loans tend to have low interest rates, you’ll likely see more of a benefit from meeting your minimum payment and then funneling any extra cash toward long-term investing for retirement, Curtis said. (Research shows women’s retirement savings tend to lag men’s.)

If your company matches your 401(k) retirement plan savings, try to salt away at least enough to get that full matched amount, Curtis said. “I always emphasize trying to capture that free money,” she added.
Women who have children may also want to consider putting even small amounts on a regular basis into a 529 savings plan so that they don’t need to borrow more when their kids are ready for college, Curtis added.
But Winnie Sun, co-founder of Sun Group Wealth Partners and another member of CNBC’s Advisor Council, added an asterisk to that point.
“When it comes to helping your kids with their college costs, just remember that you need to prioritize your own retirement savings,” Sun said.

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The National Association of Realtors agreed to a $418 million settlement in an antitrust lawsuit last week.
The proposed settlement is likely to change the way Americans buy and sell homes.
While it may take time for these changes to materialize, here’s what to consider if you’re entering the housing market this year.

A landmark class-action lawsuit may change the way Americans buy and sell homes.
The National Association of Realtors agreed to a $418 million settlement last week in an antitrust lawsuit where a federal jury found the organization and several large real-estate brokerages had conspired to artificially inflate agent commissions on the sale and purchase of real estate. 

The NAR’s multiple listing service, or MLS, used at a local level across areas in the U.S., facilitated the compensation rates for both a buyer’s and seller’s agents.
At the time of listing a property, the home seller negotiated with the listing agent what the compensation would be for a buyer’s agent, which appeared on the MLS. However, if a seller was unaware they could negotiate, they were typically locked into paying the listed brokerage fee.
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The proposed settlement would have the commission offer completely removed from the NAR’s system and home sellers will no longer be responsible for paying or offering commission for both the buyer and seller agents, said real estate attorney Claudia Cobreiro, the founder of Cobreiro Law in Coral Gables, Florida.
“The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation,” the NAR wrote in a press release.

“Commissions remain negotiable, as they have been,” the organization wrote.
However, some of these changes may take time to materialize, experts say.

Settlement process ‘can take some time’

If a settlement agreement is accepted within a lawsuit between two people, the court generally won’t look at the settlement. Yet, in a federal class-action lawsuit, one that affects a large number of people, there will be a period for the court and interested parties to review the settlement and offer commentary and feedback on the agreement, Cobreiro said.
“That’s the process that we’re about to enter, and that process can take some time,” she said.
As proposed, the settlement would have the NAR completely remove commissions from its MLS system by July. That may be optimistic, Cobriero said.
“It would be more realistic to see this being implemented later this year,” she said.

In the meantime, it’s “business as usual” for buyers and sellers, Cobreiro said. “There is nothing that agents should be doing differently currently in their ongoing transactions.”
A buyer or seller already in the market is probably not going to be affected by the settlement unless their property happens to be on the market a little longer than what’s customary, she said.
“The big gray area here is how will buyer [agent] commissions be handled moving forward,” said Cobreiro, as there is no finalized agreement yet that clearly indicates how that will be handled.

What the settlement could mean for homebuyers

The settlement agreement doesn’t say that the buyer’s agent will not be paid nor that the buyer’s agent cannot charge fees.
“The big question here is who is going to pay for those services moving forward. Will it ultimately be a buyer that will have to get the buyer’s agent’s commission together, on top of closing costs and on top of down payment?” Cobreiro said.
While commission fees are negotiable between involved parties, knowing what cards you have on the table as a homebuyer will be more important now than before. Using an agent will still be a smart way to achieve that, experts say.
“A great local agent can give you a competitive advantage,” said Amanda Pendleton, a home trends expert at Zillow Group. That’s especially true as low-priced starter homes are expected to remain in demand, she said.
Here are two things to know about how the settlement could change the process of buying a home:
1. Buyers could be responsible for their agent fees: Historically, real estate commissions typically come out of the seller’s pocket, and are split between the buyer’s and seller’s agents.
As a result of the settlement, the seller will no longer be responsible for commission fees for a buyer’s agent. So this is a new potential charge buyers need to consider in their budget. Historically, if a buyer’s agent got half of a 5% or 6% commission, that equaled thousands of dollars.
For example: The median home sale price by the end of 2023 was $417,700, according to the Federal Reserve. That would mean commissions at a 5.37% rate — the 2023 average rate, according to Lending Tree — amount to roughly $22,430, about $11,215 of which might go to the buyer’s agent.
But bypassing an agent’s services may not lead to direct savings, especially for first-time buyers, experts say. You could put yourself at risk by leaving the homebuying process entirely to the seller and their agent, said Cobreiro.
Sometimes things show up in your home inspection report that merit a credit from the seller, but if you don’t have an agent, the seller’s agent may not volunteer that, said Cobreiro.
Doing so would be a breach of their fiduciary duty to the seller, and it affects their commission if the price of the property declines, she said.
“Signing the contract is the least of it; there’s so many things that happen throughout the transaction that really require the expertise and the navigation by someone who understands the process,” she said.

2. Buyers may be required to sign a contract early on: If buyers become responsible for their agent’s commission, you’re likely to see more agents asking buyers to sign a buyer-broker agreement upfront, before the agent starts helping them find a property.
Most brokerages have a buyer agency agreement, but it’s common for real estate agents to wait to present the contract.
“They want to win the person’s business, they don’t want to scare them with having to sign any contracts,” said Steven Nicastro, a former real estate agent who writes for Clever Real Estate.
Moving the contract talks to earlier in the process is a precaution to protect buyer’s agents in the market.
“That could lead to negotiations actually taking place at the first meeting between a buyer and the buyer’s agent,” Nicastro said.
Know you can negotiate the commission rate as well as the duration of the contract, which can span from three months to a year, Cobreiro said. More

New Social Security Commissioner Martin O’Malley has unveiled a four-step plan to change the way the agency handles overpayment issues.
Some beneficiaries have received notices demanding repayment of benefits, sometimes for sums totaling tens of thousands of dollars.

Former Gov. Martin O’Malley (D-MD), President Biden’s nominee to be the next Commissioner of Social Security, testifies during his confirmation hearing before the Senate Finance Committee at the Dirksen Senate Office Building on November 02, 2023 in Washington, DC.
Kevin Dietsch | Getty Images

Three months into his role as commissioner of the Social Security Administration, Martin O’Malley unveiled a new plan to tackle overpayment issues that have led the agency to demand some beneficiaries repay benefits.
“We are no longer going to have that clawback cruelty of intercepting 100% of a payment if people do not respond to our notice,” O’Malley told the Senate Committee on Aging on Wednesday.

The plan comes after some beneficiaries who received excess benefit payments have received letters from the Social Security Administration demanding repayment of those sums.
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One overpayment notice for $58,000 was recently sent to a Savannah, Georgia, resident “through no fault of her own,” Sen. Raphael Warnock, D-Georgia, noted during the hearing.
Because that beneficiary could not afford to repay the sum to the SSA, the agency reduced her monthly benefits, Warnock said. As a result, she could no longer pay her rent.
“That’s the human cost, the human face of these policy issues,” said Warnock, and indicated that his office frequently hears from constituents about overpayments issues and clawback notices.

The overpayment and underpayment of beneficiaries’ monthly checks is one of three service issues O’Malley said he plans to tackle in 2024. He also plans to address the long wait times for service on the agency’s 800 number, as well as a backlog in disability benefit applications that leads to long wait times for approval.
During the hearing, he also called on Congress to provide additional support, pointing to President Joe Biden’s proposed budget that calls for a funding increase for the agency.
“We are in a customer service crisis,” O’Malley said, due to underfunding and understaffing.

How Social Security overpayments handling will change

During the Senate hearing, O’Malley introduced a new four-part plan to change how the Social Security handles overpayment issues.
Starting Monday, March 25, the agency will no longer intercept 100% of a beneficiaries’ monthly benefits if they do not respond to a repayment notice, he said. Instead, the agency will use a “much more reasonable” default withholding rate of 10%, according to O’Malley.
Second, the claimant will no longer have the burden of proof to show whether they were at fault in causing the overpayment.
“We should have to produce that reason, not them,” O’Malley said.
Third, for beneficiaries who work to establish repayment plans with the Social Security Administration, the maximum time will be extended to up to 60 months from 36 months.
Finally, it will now be easier beneficiaries to request a waiver so they do not have to repay the money to the SSA if they are not at fault or do not have the ability to repay the money.
“We’re looking to do more as well; I’m not able to announce that now,” O’Malley said.
The changes will require changes to training and systems that beneficiaries encounter when they visit one of the 1,210 Social Security field offices with an overpayment notice, he noted.

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Interest rates for credit cards are likely to continue at elevated levels for the rest of 2024, even if the Federal Reserve cuts rates.
Rates for savings accounts continue to be high, but likely won’t stay there for much longer.
Rates for home mortgages could continue moderating as the year progresses.

Hinterhaus Productions | Digitalvision | Getty Images

Savings accounts

Higher rates mean that consumers have to pay more to service their debt, but it also means that banks pay higher rewards to savers. It’s one of the silver linings to the current rate environment, said Ted Rossman, chief credit card analyst at Bankrate.
“There’s also been remarkable stability at the top of this market,” Rossman said. “The highest savings rate right now is 5.35%.”

That top rate is considerably higher than the national average for savings rates overall, which has been just below 0.6% for the past two months. But even that overall average is more than double its level of 0.23% 12 months ago.
Rossman added that plenty of high-yield savings accounts, mostly available online, are still paying close to or even above 5%. These kinds of accounts keep money easily accessible while earning solid returns and are great options for emergency savings.

Certificates of deposit

Interest rates on savings accounts are higher than they’ve been in decades, but there has been recent softening in returns on certificates of deposit, data from the U.S. Federal Deposit Insurance Corp. shows.
The average yield on a 12-month certificate in March 2024 was 1.81%, down slightly from its high in December and January, according to the FDIC.

Despite the dip, CDs are good savings vehicles that avoid risk but still provide a return if you’re willing to tie up your money for a set period of time, Rossman said. The current environment will likely remain good for savers until the Federal Reserve initiates its rate cuts.
“There’s been remarkable stability at the top of this market, even though we expect cuts are coming,” he said. “These shorter-term rates don’t tend to move until the Fed moves.”
Until then, savers should take full advantage.

Credit cards

The flip side to the positive environment for savers is the expensive credit card market: Consumers carrying balances on their cards face historically high rates. The average credit card rate has been well above 20% for the past 12 months and will continue to stay there for some time, Rossman said.
“Sometimes rates bounce around a little bit if offers come on and off the market,” Rossman said, but “we’ve plateaued since that last rate hike as of late July.”

The key for consumers to remember is that credit card debt is expensive, and that will still be true even after the rate cutting starts, he said.
“The Fed is not going to come to your rescue on credit card rates,” Rossman said. “Even if rates fell a couple of points in a couple of years, they’d still be high.”
His best advice for consumers is to prioritize paying off credit card debt, if possible with the help of a balance transfer card, which lets consumers carry balances from one credit card to another for a low fee and an extended period of no or low interest.

The Fed is not going to come to your rescue on credit card rates.

Ted Rossman
Senior industry analyst, Bankrate

Rossman added the offers from balance transfer cards continue to be very favorable with low fees and generous repayment windows.
“The balance transfer market has been remarkably stable and strong,” he said. “It speaks to a strong job market and the strong economy. People are paying these bills back,” despite the fact that more consumers, on average, are carrying more expensive debt.

Mortgage rates

While savings and credit card rates are very sensitive to maneuvers from the Federal Reserve, the area that might see the most movement is housing.
“Unlike some of these other products, mortgage rates tend to move in advance of the Fed because they tend to track 10-year Treasurys,” Rossman said. “It’s more about investor expectations for the Fed and for economic growth.”
That’s reflected in the data. Mortgage rates peaked in October 2023 at about 8%, followed by a steady decline. And after a brief jump in February, they seem to be settling back to where they were at the beginning of 2024, when a 30-year fixed rate mortgage was about 6.6%.

“We think there’s a good chance that the average 30-year fixed rate mortgage could be around 6% by the end of the year,” Rossman said, which would be a much needed reprieve for a highly competitive housing market that is still undersupplied.
High mortgage rates have kept many sellers — who are locked into lower rates from years’ past — from putting their homes on the market. Lower rates could get them to list, Rossman said.
“The closer we get to 6% and then eventually into 5% territory, that gets some people off the fence and they list their home and then inventory improves,” he said. “Then that gives some some relief on the price side for would-be buyers.”

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The Federal Reserve held rates steady at the end of its two-day meeting Wednesday, delaying the start of rate cuts.
For consumers, this means relief from high borrowing costs — particularly for mortgages, credit cards and auto loans — isn’t coming just yet.

The Federal Reserve announced Wednesday it will leave interest rates unchanged, delaying the possibility of rate cuts as well as any relief from sky-high borrowing costs.
Overall, expectations that the Fed is pulling off a soft landing have increased, but that offers little consolation for Americans with high-interest debt.

And now there may be fewer interest rate cuts on the horizon after hotter-than-expected inflation reports sent the message that “we are moving in the right direction, but we’re not there yet,” said Greg McBride, chief financial analyst at Bankrate.com.
For consumers, that means “a very slow downward drift in savings rates but no material change in borrowing costs for credit cards, auto loans or home equity lines of credit,” McBride said.
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Inflation has been a persistent problem since the Covid-19 pandemic, when price increases soared to their highest levels since the early 1980s. The Fed responded with a series of interest rate hikes that took its benchmark rate to its highest level in more than 22 years.
The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

The spike in interest rates caused most consumer borrowing costs to skyrocket, putting many households under pressure.

Even with some rate cuts on the horizon later this year, consumers won’t see their borrowing costs come down significantly, according to Columbia Business School economics professor Brett House.
“The costs of borrowing will remain relatively tight in real terms as inflation pressures continue to ease gradually,” he said.
From credit cards and mortgage rates to auto loans and savings accounts, here’s a look at where those rates could go in 2024.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to nearly 21% today — an all-time high.
With most people feeling strained by higher prices, balances are higher and more cardholders are carrying debt from month to month compared with last year.
Annual percentage rates will start to come down when the Fed cuts rates, but even then they will only ease off extremely high levels. With only a few potential quarter-point cuts on deck, APRs would still be around 20% by the end of 2024, according to Ted Rossman, Bankrate’s senior industry analyst.
“If the average credit card rate falls a percentage point from its current record high of 20.75%, most cardholders would barely notice,” he said.

Mortgage rates

Although 15- and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
But rates are already lower since hitting 8% in October. Now, the average rate for a 30-year, fixed-rate mortgage is near 7%. That’s up from 4.4% when the Fed started raising rates in March 2022 and 3.27% at the end of 2021, according to Bankrate.
Doug Duncan, chief economist at Fannie Mae, expects mortgage rates will end the year at 6.4%, but that won’t provide much of a boost for would-be homebuyers.
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024,” Duncan said. “The problem is still supply. If rates come down and it ramps up demand and there’s no supply, the only thing that happens is that home prices go up.”

Auto loans

Even though auto loans are fixed, payments are getting bigger because car prices have been rising along with the interest rates on new loans, resulting in less affordable monthly payments. 
The average rate on a five-year new car loan is now more than 7%, up from 4% when the Fed started raising rates, according to Edmunds. However, competition between lenders and more incentives in the market have started to take some of the edge off the cost of buying a car lately, said Ivan Drury, Edmunds’ director of insights.
Once the Fed cuts rates, “that gives people a little more breathing room,” Drury said. “Last year was ugly all around. At least there’s an upside this year.”

Student loans

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are already paying more in interest. How much more, however, varies with the benchmark.
For those struggling with existing debt, there are ways federal borrowers can reduce their burden, including income-based plans with $0 monthly payments and economic hardship and unemployment deferments. 
Private loan borrowers have fewer options for relief — although some could consider refinancing once rates start to come down, and those with better credit may already qualify for a lower rate.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
As a result, top-yielding online savings account rates have made significant moves and are now paying more than 5% — above the rate of inflation, which is a rare win for anyone building up an emergency savings account, McBride said.
Since those rates have likely maxed out, this is the time to lock in certificates of deposit, especially maturities longer than one year, he said. “There’s no incentive to hold out for something better because that’s not the way the wind is blowing.”
Currently, one-year CDs are averaging 1.73%, but top-yielding CD rates pay over 5%, as good as or better than a high-yield savings account.

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