Markus Andrews

Many studies show that there is a strong connection between financial literacy and financial well-being.
One recent report found a lifetime benefit of roughly $100,000 per student from taking a one-semester course in personal finance during high school.

Taking a financial education class in high school does pay off.
In fact, there is a lifetime benefit of roughly $100,000 per student from completing a one-semester course in personal finance, according to a recent report by consulting firm Tyton Partners and Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students.

Much of that financial value comes from learning how to avoid high-interest credit card debt and leveraging better credit scores to secure preferential borrowing rates for key expenses, such as insurance, auto loans and home mortgages, according to Tim Ranzetta, co-founder and CEO of Next Gen.
But then there is the ripple effect, he added.
“Students bring these lessons home,” Ranzetta said. “When you take that $100,000 in savings and multiply it across families and communities, it’s an incredible economic engine.”
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“I get to show students the value of having a savings and checking account and then they are able to share that with their parents,” said Kerri Herrild, who has been teaching personal finance at De Pere High School in Wisconsin for 18 years, referring to what’s known as the “trickle up effect.”

“Getting this basic knowledge — that’s powerful,” she said.

Meanwhile, the trend toward in-school personal finance classes is gaining steam.
As of 2024, half of all states already require or are in the process of requiring high school students to take a personal finance course before graduating, according to the latest data from Next Gen.
In addition, there are another 35 personal finance education bills pending in 15 states, according to Next Gen’s bill tracker.

‘The research is overwhelming’

Many studies show there is a strong connection between financial literacy and financial well-being.
“The research is overwhelming,” Ranzetta said.
Students who are required to take personal finance courses starting from a young age are more likely to tap lower-cost loans and grants when it comes to paying for college and less likely to rely on private loans or high-interest credit cards, according to a study by Christiana Stoddard and Carly Urban for the National Endowment for Financial Education.
Students are also even more likely to enroll in college when they are aware of the financial resources available to help them pay for it.
“Our results show that high school financial education graduation requirements can significantly impact key student financial behaviors,” the authors said in the report.

Further, students with a financial literacy course under their belt have better average credit scores and lower debt delinquency rates as young adults, according to data from the Financial Industry Regulatory Authority’s Investor Education Foundation, which seeks to promote financial education.
In addition, a report by the Brookings Institution found that teenage financial literacy is positively correlated with asset accumulation and net worth by age 25.

I tell them this is going to be the most important class they are going to take in their life.

Christopher Jackson
personal finance teacher at DaVinci Communications School

“I start off my class by telling them that my No. 1 goal is to affect their children’s children,” said Christopher Jackson, who teaches personal finance to 12th graders at DaVinci Communications High School in Southern California.
“I tell them this is going to be the most important class they are going to take in their life,” Jackson added.
As part of Jackson’s course, students open Roth individual retirement accounts with an initial grant of $100, which many then maintain on their own.

Among adults, those with greater financial literacy find it easier to make ends meet in a typical month, are more likely to make loan payments in full and on time and less likely to be constrained by debt or be considered financially fragile.
They are also more likely to save and plan for retirement, according to data from the TIAA Institute-GFLEC Personal Finance Index based on research over several years.
“The need is real, the effect is real, and it motivates me as a teacher,” Jackson said. 
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Large credit card issuers had interest rates exceeding those of small banks and credit unions by about 8 to 10 percentage points in 2023, according to the Consumer Financial Protection Bureau.
Consumers with a $5,000 balance would save about $400 to $500 a year by using a smaller card issuer, the CFPB said.
Consumers who use cards responsibly may be better off with large lenders.

Olga Rolenko | Moment | Getty Images

The nation’s largest credit card companies typically charge higher interest rates than small banks and credit unions — and switching may save the average cardholder hundreds of dollars a year, according to an analysis issued Friday by the Consumer Financial Protection Bureau.
However, some consumers, depending on their card and use, may get a bigger financial benefit by sticking with large lenders, experts said.

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In the first half of 2023, the largest U.S. lenders charged a typical credit card annual percentage rate that was 8 to 10 percentage points greater than that of smaller lenders, according to the financial watchdog.
Rates for consumer debt, and savings, products have risen as the U.S. Federal Reserve has raised its benchmark interest rate. The CFPB analysis captures all but the most recent increase, a quarter-point hike in July.
Consumers with a $5,000 balance can save $400 to $500 a year by using cards from small versus large lenders, according to the CFPB analysis, which said the “stakes are high” for cardholders. The average person has a balance of $6,360, according to TransUnion.
“We’re finding many of them would be better off with newer entrants or smaller players in the market,” CFPB Director Rohit Chopra said Friday during an appearance on CNBC’s “Squawk Box.” “For the average household … switching can actually save them hundreds and hundreds of dollars over the course of the year.”

Card balances and total debt are at all-time highs

The agency’s findings come as average credit card balances and total credit card debt hit all-time highs at the end of 2023. The average credit card interest rate for all accountholders was more than 21% in November, also a record, according to Federal Reserve data.
The federal agency’s analysis defines large lenders as the nation’s 25 biggest, and small lenders as all others in its sample. Its data is based on 643 general-purpose credit cards offered across 156 total issuers, including 84 banks and 72 credit unions.

Large lenders account for the vast majority of the credit card market: The 10 biggest have 83% market share and the top 30 have roughly 95%, according to another recent CFPB report.
The credit-card market is highly competitive and gives consumers a broad range of cards from which to choose, said spokespeople for the Consumer Bankers Association and American Bankers Association, trade groups representing banks and lenders.
“Sometimes a consumer just wants a drive-thru hamburger. Sometimes a consumer wants a steak. A thriving marketplace means that consumers can choose products that may have different prices and offer features, perks, or other value that’s specific to them,” Lindsey Johnson, CEO of the Consumer Bankers Association, said in a written statement.

Credit scores didn’t impact findings

The CFPB’s new interest-rate findings are consistent regardless of a consumer’s credit score, it said.     
For example, someone with “poor” credit (a credit score of 619 or less) had a median 20.62% average percentage rate at a small institution versus 28.49% at a large one, according to CFPB data. Likewise, small lenders charged a median 15.24% rate for someone with “great” credit, compared with 22.99% for large firms.

One caveat: By law, federal credit unions — which fall in the small-lender category — can’t charge interest rates exceeding 18% APR. Even excluding credit unions, however, small issuers tend to have lower APRs than larger ones, CFPB said.
And this isn’t to suggest that an 18% rate is good for consumers: That would still fall into the bucket of high-interest debt, said Ted Rossman, industry analyst at CreditCards.com.

Why interest rates may not matter for some users

The CFPB report doesn’t necessarily offer a complete picture of the credit card market, Rossman said.
For one, interest rates are only an issue for cardholders who don’t pay their bill in full and on time each month, i.e., those who carry a credit card balance from month to month, he said.
About half — 51% — of cardholders didn’t carry a monthly balance as of November, according to Bankrate. Their accounts don’t accrue interest. That share is down from 61% in 2021, however.
“It’s not that [the interest rate] doesn’t matter ever, but it doesn’t matter as long as you’re paying in full,” Rossman said.

We’re finding many of them would be better off with newer entrants or smaller players in the market.

Rohit Chopra
CFPB director

Large lenders also tend to offer more generous rewards programs such as cash back on purchases or perks related to travel and other categories, for example, Rossman said.
While large issuers tend to charge higher annual fees, those fees may be worthwhile for users whose rewards value exceeds their annual fee and who use their cards responsibly, Rossman said. Consumers may still “come out way ahead” via card benefits received for purchases they’d planned to make anyway, he said.
To that point, 27% of the credit cards issued by large firms charge an annual fee, versus 9.5% of those from small firms, the CFPB found. Large institutions’ average annual fees for those cards were also higher: $157 versus $94, respectively.

Further, while small issuers tend to charge lower APRs on an ongoing basis, large lenders may offer promotions for temporary 0% interest on balance transfers from existing cards, for example. These promotions, when used appropriately, can perhaps help users pay off high-interest card debt, Rossman said.
Ultimately, cardholders who carry a balance may be best served by avoiding use of credit cards altogether: Try to stick to cash or debit as you pay down your existing card balance, perhaps with the help of a nonprofit credit counselor, he said.
“I’d be hard-pressed to find a case where even an 8%, 10% or 12% card makes sense for them,” Rossman said. More

The U.S. Department of Education has been reviewing the accounts of borrowers who have been in repayment for decades to see if they are eligible for forgiveness.
Marlon Fox, a chiropractor in North Charleston, South Carolina, is one person to benefit.
In August, he learned that his more than $100,000 student debt balance had been canceled. He’d carried the debt for 35 years.

Marlon and his dog, George.

Since 1988, Marlon Fox has been paying down his federal student debt.
He didn’t see an end in sight. Then, on Aug. 25, 2023, an email popped up in his inbox with the subject line: “Your student loans have been forgiven!”

His $119,500 balance was reset to zero.
“I couldn’t believe it,” said Fox, 65, a chiropractor in North Charleston, South Carolina. “I’d been battling this for so long. I’ve been on cloud nine ever since.”
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Why some borrowers are in repayment for decades

After the Supreme Court blocked the Biden administration’s sweeping student loan forgiveness plan last June, it has explored all of its existing authority to leave people with less education debt. One of those strategies has been to take another look at the accounts of borrowers who have been in repayment for decades. Such stories are not uncommon.
Under the U.S. Department of Education’s income-driven repayment plans, student loan borrowers are entitled to get any of their remaining debt forgiven after 20 years or 25 years.

Yet many have not seen that promised relief.
“This is due, in part, to strong financial disincentives for student loan servicers to inform consumers about the program and their ability to qualify for it,” said Nadine Chabrier, a senior policy and litigation counsel at the Center for Responsible Lending.
The Education Department contracts with different companies to service its federal student loans, including Mohela, Nelnet and EdFinancial, and pays them more than $1 billion a year to do so. The companies earn a fee per borrower per month, which advocates say discourages transparency around loan forgiveness opportunities.
Even when borrowers are enrolled in these plans, servicers don’t always keep track of their payments, experts say. Records can also get lost when borrowers’ loans are transferred to a different company — a common occurrence.
By the time Fox’s debt was forgiven, he’d been in repayment for 35 years and his account had been managed by at least three different servicers during that time.
Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, denied that the companies benefit by veering from the government’s orders.
“We are incentivized to meet the requirements that the government sets, which includes giving borrowers the benefits that the law provides,” Buchanan said. “We are audited, and get business or lose it based on meeting those standards.”

I’ve been on cloud nine ever since.

Marlon Fox

So far, the Education Department’s review of borrowers in income-driven repayment plans has erased the debts of about 930,000 people, for more than $45 billion in aid.
Some have even been refunded for their months or years of overpayments.
Shortly after Fox heard that his student loans were forgiven, he received a payment from the government for $56,801.

A $60,000 debt that only grew

In the 1980s, Fox borrowed roughly $60,000 to attend the Palmer College of Chiropractic. Shortly after he graduated, his monthly student loan bill was around $1,000. Early in his career and just starting a family, he struggled to come up with that sum.
After his father had a stroke, Fox became his main caregiver and was forced to pick up his expenses and debts. Things got even harder.
At times, Fox enrolled in forbearances, which caused his balance to mushroom. This option for struggling borrowers can keep loans on hold for up to three years, but interest continues accruing. The interest rate on his federal student loans was over 8%.

Fox lived frugally and made payments on his student debt whenever he could. He enrolled in an income-driven repayment plan in the mid-1990s, after Congress established the first one. The plan left him with a more manageable monthly bill, but he barely saw a dent in his balance.
“It still drops so amazingly slowly,” he said.

Time passed. Fox’s hair grayed, and he sent his own children off to college. When he told people he was still paying off his student debt, they scratched their heads.
“Every time I tried to explain this to someone, they’d say, ‘How could that be?'” Fox said.
He wrote to his House representatives and senators, asking them for help. He believed he should have gotten his debt forgiven after a certain point. He got nowhere.
The lawmakers, when they did get back to him, said he should reach out to his servicer. The companies, meanwhile, didn’t have a full record of his payments.

Student debt’s shadow: ‘I’ll probably always work’

Fox, who considers himself a conservative-leaning independent, said he can’t help but be impressed with the Biden administration’s work.
“No other administration would look into this, and correct the wrongs,” he said.
Fox doesn’t tell many people his story. He lives in a mostly Republican area, where there is a deep skepticism toward forgiving the debt of those who’ve benefited from a higher education.
“They say, ‘Hey, you got your school loans paid off? That’s unfair,'” Fox said. “But if they let me tell my full story, then they understand.”
Over the decades, based on Fox’s records, which CNBC reviewed, he paid around $200,000 on his federal student loans.
That debt still casts a shadow over his life.
Those large bills left Fox with little money to save toward retirement.
“I’ll probably always work,” he said.
He can’t remember the last time he took a full week off from work.
“That’s a whole week without pay, and that would make it difficult to meet these huge payments,” he said. “My wife was really upset I wouldn’t take off.”
For the first time in years, though, he and his wife, Debbie, booked a vacation: a week in Maui. He’s excited to spend time on the beach, and to see the turtles and whales, and to eat red snapper.
As for his refund? It’s gone. He used the cash to pay off his children’s student loans. More

If you’re on a Medicare Advantage plan, you have until March 31 to reconsider your coverage.
Here’s what you need to know to get started.

Andreswd | E+ | Getty Images

Certain retirees can now change their health coverage during Medicare Advantage open enrollment, which runs until March 31.
Medicare Advantage is health coverage provided through private companies that are paid by Medicare to cover your benefits.

If you’re already on a Medicare Advantage plan, you can take advantage of the open enrollment period to switch to another Medicare Advantage plan or drop your Medicare Advantage plan and switch to original Medicare and perhaps also a separate Medicare drug plan. (Original Medicare includes Parts A and B for inpatient hospital stays and outpatient care.)
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One of the biggest reasons Medicare beneficiaries may want to switch coverage is costs.
Recent research from the Employee Benefit Research Institute suggests that retirees may need to have substantial sums set aside to cover health care costs in retirement — up to $413,000 in one “extreme case” for a couple covered by Medigap with high prescription drug expenditures to cover 90% of their costs.
However, those enrolled in Medicare Advantage may need lower savings targets, the research found. For example, couples may need to have just $189,000 saved to have a 90% chance of covering their retirement health care costs.

There are potential drawbacks to Medicare Advantage, the research notes, particularly because those plans tend to have limited networks or require approval before covering certain medications or services.
While those six-figure estimates may sound intimidating, a better way to plan for health care costs in retirement is as an annual cash flow need, rather than lump sum savings, according to physician and certified financial planner Carolyn McClanahan, the founder of Life Planning Partners in Jacksonville, Florida.
“We need to look at this year to year instead of trying to predict 30 years of costs,” said McClanahan, who is also a member of the CNBC FA Council.
Medicare open enrollment periods can be an opportunity to identify potential ways to save.

When a Medicare Advantage plan may be best

Medicare Advantage plans have largely been put in place because of baby boomers, who have become used to managed care plans in their working years, notes Darren Hotton, associate director of community health and benefits at the National Council on Aging.
The plans allow beneficiaries to carry just one card and usually come with co-pays. Medicare Advantage plans generally don’t require beneficiaries to get a separate drug plan for prescriptions and may also provide for supplemental benefits that are not allowed under original Medicare.
“It’s great for people who are healthy,” Hotton said. “It’s great for people who love co-pays and being told where to go.”
Because Medicare Advantage plans come with an out-of-pocket maximum, they also are typically a fit for low-income beneficiaries who may struggle with high deductibles and coinsurance under original Medicare, he noted.  

When to keep your options open   

Whether or not a Medicare Advantage plan is right for you depends on how healthy you are.
“If you know that you have a lot of medical services, it’s probably best for you to just go to Medicare and a Medicare supplement,” Hotton said. “But if you’re healthy, you could save money, then this is probably the right option with Medicare Advantage.”
Retirees may be tempted to go with Medicare Advantage once they see the lower premiums, particularly if they live in an area with a strong network, McClanahan said.
But the problem is those plans can be restrictive if you come down with a serious condition and need specialized care.
If you want to switch to Medigap — extra insurance provided by a private insurance company to supplement original Medicare costs — you would have to undergo specialized underwriting. If you’re sick, you would be unlikely to pass and stuck with the more limited Medicare Advantage coverage, McClanahan said.

“If you’re young and healthy, you don’t know what disease you’re going to get,” McClanahan said. Consequently, she said she often recommends original Medicare coverage.
Hotton said he has seen beneficiaries who go back and forth between Advantage and original Medicare many times in their lifetime. The key is to be strategic. For example, someone who has a family history of health declines after 80 may elect to switch back to original Medicare when they approach that age milestone.

How to take advantage of open enrollment

If you’re currently on a Medicare Advantage plan and are considering whether to switch during open enrollment, the first step is to visit your local State Health Insurance Assistance Program, or SHIP, Hotton said.
There, they can walk you through the Medicare plan finder, whether you can see how your current plan compares with others with regard to providers, prescriptions and pharmacies.
If there’s a better plan, the help at your SHIP office may be able to help with that transition, Hotton said.
Alternatively, beneficiaries may also compare plans by visiting Medicare.gov.
Beneficiaries may also receive help by calling Medicare’s 800 number. However, they may only send you a more limited list of the top three Medicare Advantage plans in your area, Hotton noted.
Because it can take some time to become fully enrolled in new coverage if you switch, it’s best to get started now rather than wait until the March 31 deadline, Hotton said. More

About 1.2 million more homeowners and renters moved out of than moved into U.S. cities with high risk of poor air quality between 2021 and 2022, according to a new analysis by Redfin.
While residents are moving to areas that are affordable and have low air quality risks, such places are exposed to different hazards.

Eduardo Munoz Alvarez | Getty Images

While both renters and homeowners are beginning to take climate hazards into consideration, affordability continues to drive moving trends.
Between 2021 and 2022, about 1.2 million more homeowners and renters moved out of than moved into U.S. cities with high risk of poor air quality, according to a new analysis by Redfin, a real estate firm. Metros with low risks of poor air quality saw 1 million more newcomers in the same timeframe.

“At an individual level, we know that people respond to climate risks and it impacts the decision of exactly what home to buy,” said Daryl Fairweather, chief economist of Redfin.
Researchers at Redfin analyzed domestic migration data from the U.S. Census Bureau and air quality risk scores from First Street Foundation, a nonprofit climate research organization based in New York.
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First Street labels a metro as “high risk” when at least 10% of properties fall into the major, severe or extreme categories. A “low risk” metro is where less than 10% of properties fall into those categories.
The rating system is based on the number of poor air quality days expected within the next 30 years and it includes two common pollutants: particulate matter (which often comes from wildfire smoke) and ozone, (when pollutants react with heat or light).

Air quality and affordability are pushing residents out of 13 metros areas, many on the West Coast. Most of the inbound moves are heading into Sunbelt states like Arizona, Florida, Nevada, North Carolina, South Carolina, Texas and Tennessee. Yet, movers will confront different climate hazards in those areas, said Fairweather.
Much of the Sunbelt “has [a] low air-quality risk but it has high heat risk, high flood risk, high wind risk from things like hurricanes,” she said.

‘We’re already starting to see some shifts’

People are responding to the danger of climate-related risks, Jeremy Porter, head of climate implications research for First Street Foundation, a nonprofit organization in New York, previously told CNBC. 
“We’re already starting to see some shifts in population where people, as they can, they’re moving away from risk and the people that can’t afford to move away from risk are stuck in those risky areas,” said Porter.
When looking at moving trends within counties and cities from 2000 to 2020 paired with flood risks, researchers at First Street Foundation noticed clear signals of people moving away from areas exposed to flooding.

In total, there are more than 2.9 million census blocks or neighborhoods in the U.S. that have levels of flood risk that are above the “tipping point,” or when flood risks begin to outweigh the area’s benefits, like job markets or proximity to the coast.
Nearly 818,000 neighborhoods in the U.S. experienced a population decline of more than 9 million people from 2000 to 2020, First Street found. Additionally, more than 3.2 million (35.5%) of those residents said they left specifically because of the flood risk.

‘I personally was impacted by air quality’

Over 85% of homes in 13 major cities are highly exposed to poor air quality; nine are in California and the rest are spread out in Washington, Oregon and Idaho, Redfin found.
“I personally was impacted by air quality,” Fairweather said. She and her family used to live in Seattle, before the Covid-19 pandemic.
But in September 2020, a major smoke event in the city due to wildfires motivated her to relocate her family to Wisconsin. While the smoke lasted two weeks in Seattle, Fairweather and her family decided not to move back.
“Climate change is definitely a factor and it was like the straw that broke the camel’s back,” she said. But as with many people, it wasn’t the only reason they decided to relocate.
On top of the poor air quality, many residents are leaving these areas because they’re being priced out; home prices in riskier metros are 65% higher than prices in low risk metros, according to Redfin.

Affordability remains as a priority for movers

About 83% of would-be homebuyers considered at least one climate risk when shopping for a home, Zillow Group, a real estate site, found in September.
Yet, some places continue to grow in population despite the underlying hazards. “Risky growth areas” are places with high levels of flood risk but continue to see population growth. Such places saw a population increase of about 17.6 million, or 30% of the country’s population, according to First Street research.
As housing costs linger at record highs, factors like affordability and employment opportunities remain as top priorities for buyers and renters alike, said Fairweather.
“It’s going to become more and more important every year, I think people will increasingly seek out information about climate risks when buying a home,” she said.
If not already, insurance costs will likely be a way many people first reckon with climate risk, said Fairweather.
Insurance bills could go up if a resident is based in a place that is exposed to increasingly common risks, and in some markets, insurers are pulling back on coverage.
“That is already happening in California, Texas and Florida. It could impact even more places,” she said.
Did you move recently because of a recurring climate hazard or weather risk? Email me at anateresa.solriviere@nbcuni.com. More

Smart Tax Planning

After vowing in September to “substantially” reduce audits on a low-income tax credit, the IRS confirmed it’s taking steps to address the inequity.
During a House Ways and Means Committee hearing, IRS Commissioner Danny Werfel said the agency is “testing changes in the audit selection algorithm” for the earned income tax credit.

IRS Commissioner Danny Werfel speaks at a Senate Finance Committee hearing in Washington, D.C., on April 19, 2023.
Al Drago | Bloomberg | Getty Images

After vowing in September to “substantially” reduce audits on a low-income tax credit, the IRS confirmed it’s taking steps to address the inequity.
“We’ve announced a significant and dramatic reduction in the number of earned income tax credit audits planned for this coming tax year,” IRS Commissioner Danny Werfel said during a House Ways and Means Committee hearing Thursday.

“We also are testing changes in the audit selection algorithm” that could “remediate the disparate impact that has been occurring,” he said. However, the agency needs more time to validate the impact of these actions, he said.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

Black Americans are roughly three to five times more likely to face an IRS audit than other taxpayers, according to a study released by economists from Stanford University, the University of Michigan, the U.S. Department of the Treasury and the University of Chicago in January 2023.
The report pointed to a faulty software algorithm used by the agency that selects who gets audited and noted the earned income tax credit contributed to this disparity.
In May, Werfel confirmed these findings in a letter to the Senate Finance Committee, noting the agency had dedicated “significant resources” to addressing the issue, including examining the agency’s automated processes and data used for exam selection.
The IRS in September reaffirmed its commitment to addressing the disparity, promising to reduce the number of so-called correspondence audits, or exams by mail, for earned income tax credit claimants.

The credit has a high ‘improper payments rate’

In 2022, about 23 million filers received $57 billion from the earned income tax credit, and the tax break averaged $2,541. It’s a refundable credit, meaning filers can use it to claim a refund, even with zero taxes owed.
However, eligibility is complicated and there’s a high “improper payments rate,” National Taxpayer Advocate Erin Collins wrote in her 2023 Purple Book of legislative recommendations.
Still, nearly 1 in 5 eligible taxpayers don’t claim the credit, and many “simply overlook it,” Werfel told reporters during a press call in January.
For tax year 2023, the credit is worth up to $7,430 for a household with three or more children, according to the IRS. Eligible workers between ages 25 and 64 without a qualifying child can receive up to $600.
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The Biden administration released its proposal for which struggling borrowers should qualify for its new student loan forgiveness plan.
It said that receiving a Pell Grant, having a disability and a person’s age could be factors signaling hardship.

President Joe Biden speaks about his economic plan at the Flex LTD manufacturing plant on July 6, 2023 in West Columbia, South Carolina.
Sean Rayford | Getty Images

The Biden administration has released its proposal for which struggling borrowers should qualify for its new student loan forgiveness plan.
The Supreme Court’s conservative majority blocked President Joe Biden’s first aid package last year. In an effort to create a loan forgiveness program that is legally viable, the Biden administration is working to narrow the relief by focusing on certain groups of borrowers, including those with balances greater than what they originally borrowed and students from schools of questionable quality.

Its new proposal concerns borrowers experiencing financial hardship, the category that has remained the most vague.
The U.S. Department of Education outlined on Thursday a set of factors that could identify struggling borrowers, such as those with student loan balances and required payments that are unreasonable relative to their household income, and people with high child-care and health-care expenses. It also said that financial hardship could be based on other debt obligations, disability, or age, among other factors.
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“The ideas we are outlining today will allow us to help struggling borrowers who are experiencing hardships in their lives, and they are part of President Biden’s overall plan to give breathing room to as many student loan borrowers as possible,” Department of Education Undersecretary James Kvaal said in a statement.
At one point, it seemed possible that the “financial hardship” category had been dropped from what has become known as Biden’s Plan B for student loan forgiveness. While Biden first attempted to cancel student debt through an executive order, he has now turned to the rulemaking process.

Over three rulemaking sessions, the negotiators tasked with determining who will be eligible for the president’s revised relief plan identified several categories that could signal hardship. Those include borrowers who received a Pell Grant or qualified for a health insurance subsidy on the Affordable Care Act’s marketplace.
But the Education Department did not include language on borrowers in hardship in its relief proposal, and the negotiators didn’t get to vote on the category.

Shortly after the rulemaking sessions, lawmakers including Sen. Elizabeth Warren, D-Mass. and Rep. James Clyburn, D-S.C., wrote to U.S. Secretary of Education Miguel Cardona on Jan. 24., pressuring him to still consider struggling borrowers for relief.
“We are concerned that, without full consideration of cancellation targeted toward borrowers facing financial hardship, the rule will not provide adequate debt relief for the most vulnerable borrowers,” the lawmakers said.
The Biden administration seems to have heard those worries. The Education Dept. said it will hold an additional rulemaking session on Feb. 22 and Feb. 23, during which the negotiating committee will focus exclusively on financially strapped borrowers. Its own proposal suggests the category could cover millions of Americans.
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The Los Angeles Times, Google, Amazon, Macy’s, Paramount and other companies have recently shed substantial numbers of employees.
If you suspect layoffs are looming at your company, there are several things you should be doing to soften the blow and ease your transition to a new job.
Building an emergency fund, soliciting references and updating job hunt materials can be smart moves.

Andresr | E+ | Getty Images

It looks like 2024 could be the “Year of the Layoffs.”
The Los Angeles Times, Google, Amazon, Macy’s, Paramount and other companies have recently shed substantial numbers of employees.

Could your company be next? 
Over the past two decades in my work as an advisor, I have helped scores of our clients successfully navigate life-shaking layoffs. I have some advice for you: Act now.  
If you suspect layoffs are looming at your company, there are several things you should be doing to soften the blow and ease your transition to a new job before the pink slip comes.

1. Build an emergency fund, tighten up your budget

You should have at least enough money in your emergency fund to cover six months of living expenses. Review your budget (or create one) to get a handle on your finances and assess medical needs and job skills. I created a free resource at http://financialfirstaidkits.com/ full of steps you can take now. 

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2. Get ready for a job hunt

Even if you feel fairly secure in your job, it’s good to prepare for the search for a new job, just in case. Update your resume and LinkedIn profile and cover letter.

3. Customize your LinkedIn preferences

I’d even recommend starting with LinkedIn first, as the career network is rich with connections and tools and features to help you quickly advise the public that you’re available for work. LinkedIn has an #OpenToWork feature that you should set up quickly. Specify the types of job opportunities you’re interested in and your preferred location to tailor your job search. By using #OpenToWork, your profile becomes more visible in search results, making it easier for recruiters to find you. 
You have the control to choose who can see your job-seeking status. “All LinkedIn Members” includes recruiters and colleagues, and adds the #OpenToWork photo frame to your profile. If you choose “Recruiters Only,” your status is visible to LinkedIn Recruiter users, providing some privacy from colleagues at your current company. However, complete privacy cannot be guaranteed.

4. Network and connect

Networking is something you should do regardless of your job status so it’s a good way to build connections without looking like you are job hunting. Make a list of former colleagues and bosses and reach out to them. Ask colleagues and work friends privately to give you leads on other jobs. Connect with your colleagues on your favorite social media accounts. 
I recommend starting with LinkedIn and checking out its global professional network, job and internship search, Networking Hub and skill development features.

5. Get your references in order

This can be tricky if you haven’t lost your job and aren’t sure you want to move on. But it’s good to have some references lined up so you don’t have to scramble if the pink slip arrives. 
Get a public endorsement aka recommendation. Your future employer will likely have multiple candidates vying for an attractive position. Make their job easier by getting a strong reference in writing and posted publicly on your LinkedIn profile.

6. Add to your skill set

Researching job skills and adding to your skill set can boost your career, regardless of whether you get laid off or not. Reviewing job descriptions in your field can tell you whether you need to learn new skills. Adding certifications or courses to your resume can be a good way to be more marketable — or promotable. 
You can check out your local community college’s offerings or LinkedIn Learning or other online course libraries. Several technology companies, including Microsoft, also offer certificate programs. Google offers several reasonably priced options as well. If you want to increase your artificial intelligence knowledge, Nvidia has courses, while Corsea has many free and paid programs. 

Getting your financial affairs in order is always a good idea.
Stressing less is good for your money and your mind. Even if it turns out a pink slip isn’t in your immediate future, making these proactive moves can help put you in a stronger position for career growth and planning for your future. You won’t be sorry.
— By Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is a member of the CNBC Financial Advisor Council. More