Markus Andrews

A federal appeals court on Thursday issued an order temporarily halting the Biden administration from implementing its new student loan repayment plan, known as SAVE.

President Joe Biden delivers remarks on new Administration efforts to cancel student debt and support borrowers at the White House on October 04, 2023 in Washington, DC.
Kevin Dietsch | Getty Images

SAVE plan mired in legal troubles

The Biden administration rolled out the SAVE plan in the summer of 2023, describing it as “the most affordable student loan plan ever.” Indeed, the terms of the new income-driven repayment plan are the most generous to date, making it controversial among critics of debt forgiveness.
So far, around 8 million borrowers have signed up for SAVE, according to the White House.

SAVE comes with two key provisions that legal challenges have targeted: It has lower monthly payments than any other IDR plan, and it leads to quicker debt erasure for those with small balances.

In late June, two federal judges in Kansas and Missouri temporarily halted those parts of SAVE, after a number of red states argued that the Education Department overstepped its authority and essentially was trying to find a roundabout way to forgive student debt after the Supreme Court blocked its sweeping plan in June 2023.
The Biden administration successfully appealed the injunction against SAVE that stopped it from lowering borrowers’ payments, but it now may be blocked from doing so again. Prior to Thursday’s ruling, the expedited forgiveness provision was still on hold.
Before the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE Plan. More

The election outcome and future policy could impact the municipal bond market, experts say.
A popular asset for higher earners, muni bonds generate interest that is federally tax-free and avoids state levies when investors live in the issuing state.
However, there’s uncertainty around interest rates, income taxes and public financing.

The first presidential debate between U.S. President Joe Biden and former U.S. President and Republican presidential candidate Donald Trump is projected on a screen projector during a watch party hosted by the Michigan Conservative Coalition in Novi, Michigan, U.S., June 27, 2024. 
Emily Elconin | Reuters

With interest rate cuts from the Federal Reserve likely on the horizon, municipal bonds could soon see higher demand, experts say. But there are several factors to watch, including the election outcomes of the presidential and congressional races, and future policies.
A popular asset for higher earners, muni bonds generate interest that is federally tax-free and avoids state levies when investors live in the issuing state. Munis typically have lower default risk than their corporate counterparts.

The election outcome could have a “massive impact” on the future of the U.S. muni bond market, said Tom Kozlik, head of public policy and municipal strategy at HilltopSecurities. Future policies from the next president and Congress, such as changes to taxes or public financing, could make munis more or less attractive to investors.
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How muni bonds have fared for investors

After losses in 2022 and 2023, muni bonds have been slightly positive in 2024, with roughly a 1% year-to-date return for the S&P municipal bond index, as of July 17.
However, “muni yields are at their highest levels in years, offering significantly better compensation than in recent history,” said Sean Beznicki, director of investments for VLP Financial Advisors in Vienna, Virginia.
Those yields could fall quickly when the Fed cuts interest rates and demand increases for muni bonds, said Kozlik. Bond yields and prices move in opposite directions.

Muni yields are at their highest levels in years, offering significantly better compensation than in recent history.

Sean Beznicki
Director of investments for VLP Financial Advisors

Of course, when weighing muni and corporate bonds, you need after-tax yields for an apples-to-apples comparison.
For example, let’s say you’re in the 35% tax bracket, comparing an 8% corporate bond to a 5.25% muni bond. While 8% seems like a higher return, you would receive 5.2% after federal taxes. 
Generally, the lower your income, the less of a tax benefit you’ll receive from muni bonds.
Ultimately, the decision to buy or sell muni bonds “really comes down to sort of your independent situation,” including goals, risk tolerance and timeline, Beznicki added.

Tax uncertainty for muni bonds

Without action from Congress, trillions in tax cuts will expire after 2025 and raise taxes for most Americans.
The Tax Cuts and Jobs Act of 2017, or TCJA, lowered federal income brackets, with the top rate falling to 37% from 39.6%. The $10,000 cap on the federal tax break for state and local taxes, known as the SALT deduction, will also sunset after next year.
Former President Donald Trump wants to fully extend TCJA cuts, while President Joe Biden aims to keep tax breaks for those earning less than $400,000. Either way, funding those extensions could be difficult amid the federal budget deficit.
If the tax cuts expire after 2025, muni bonds “become more attractive,” according to certified financial planner Barry Glassman, founder and president of Glassman Wealth Services in McLean, Virginia. He is also a member of CNBC’s Financial Advisor Council.

Credit risk for municipal bonds

Future credit risk could also be affected through policy changes made by the party that controls the White House and Congress, experts say. In addition to taxation, lawmakers can pass funding for state and local governments, which can boost credit quality for muni bond issuers.
Enacted during the Covid-19 pandemic, the American Rescue Plan of 2021 sent billions to state and local governments, which has contributed to the strength of muni bond credit quality, Kozlik said.
“We might not ever see something like that again,” he said.
Still, in 2024, municipal credit upgrades have outpaced downgrades by a ratio of 2.1 to 1, as of March 31, according to Moody’s Ratings.

The federal exemption for muni bond interest

Amid the looming 2025 tax cliff and federal budget deficit, some experts also worry about the federal tax break for muni bond investors, Kozlik said.
Although the exemption remained intact through TCJA negotiations, federal lawmakers enacted other changes that raised levies on muni bond issuers. One provision eliminated the tax-exempt status for so-called “advance refunding bonds,” which allowed municipalities to refinance once before their bonds’ redemption.
As 2025 approaches, legislators will focus on the deficit and TCJA extensions. While the tax break for muni bonds doesn’t face an “imminent threat,” it could be revisited as lawmakers seek funding, Kozlik said.

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Nearly 6 million 16- to 19-year-olds were working last month, according to data from the Bureau of Labor Statistics.
That figure marked the highest teen employment in June since 2007.
Economists attribute this to a strong labor market, rising wages and high education costs.
The future of teen employment lies largely on the state of the economy, but external factors such as automation could threaten food service and retail jobs.

A server scooping ice cream at the Freddo Gelato Shop in Miami Beach, Florida.
Jeff Greenberg | Universal Images Group | Getty Images

Teen summer jobs are back.
Last month, more than 5.7 million 16- to 19-year-olds participated in the labor market, Bureau of Labor Statistics data shows, marking the highest teen employment rate in June since 2007. While data shows that this is still far below the more than 8 million teen workers recorded in the late ’70s, the figures show that teen employment has steadily grown over the past decade. 

Economists say more teens have been drawn to the workforce because of a hot labor market with more attractive wages. Teens benefit, too, because participating in the workforce can provide them with valuable experience to help with employment and earnings later in life, according to economists.
And as long as the economy stays strong, experts aren’t expecting a dip in teen employment on the horizon.

“It actually is becoming more compelling for young people to work because the amount of money that they can make is higher than it used to be,” said Brad Hershbein, senior economist and deputy director of research at the W.E. Upjohn Institute for Employment Research.
“Even aside from minimum wage increases, just the market being strong has made it a compelling choice,” Hershbein said.

How college goals have influenced teen workers

Despite recent gains, the employment-population ratio among 16- to 19-year-olds is still low compared with records set decades ago. At peaks in the ’50s and ’70s, around half of the teen population had jobs. Today, about one-third of teenagers are employed, according to BLS data.

Economists largely attribute that broad decline to a push for college education in the 1980s. A 1983 National Commission on Excellence in Education report called “A Nation at Risk” said the United States was falling behind other nations in education and served as a call to action for educators.
“As a consequence, there was a pretty big emphasis on trying to get people to stay in school longer,” Hershbein told CNBC. “And that’s when you had increases in after-school [programs], tutoring and more activities. The school days tended to get a little bit longer, and so that put a little bit of a cramp on teens’ ability to work.”
The college mentality really took hold in the 2000s, Hershbein said. Between 2000 and 2011, the number of teens in the workforce dropped from 7 million to 4.2 million.
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But since hitting that low, teen employment has been steadily trending upward. Economists say this is partly a consequence of the same factor that caused many teens to leave the labor force: college.
Citi global economist Rob Sockin told CNBC that young people seeing their peers struggling with student debt is influencing them to delay college to work or take on a job while in school.
“It probably speaks to the very high cost of education and the difficulties that some people are having in this environment with a very elevated cost of living with how high inflation has been in the cycle,” Sockin said.
Rising wages, particularly in food service and retail jobs, are also making jobs more attractive to teens, economists say. The average hourly pay for a teen is $17 an hour, according to ZipRecruiter data, with jobs in some cities offering more. New York, for example, has an average hourly pay for teens of $19, according to the data.

Young workers ‘tend to be the first ones let go’

There’s always a seasonal component with youth employment, KPMG senior economist Matthew Nestler told CNBC, as many teens take on jobs in the summer while they’re out of school and then reduce their hours or cease working when classes resume.
Service jobs in particular also face the threat of automation, according to Sockin. Many jobs traditionally filled by teens such as grocery store clerks and fast-food cashiers are being replaced by machines, he said.
Economists say the overall direction teen employment takes depends heavily on where the economy is headed. A perfect storm of a tight labor market, rising wages, high education costs and curbed immigration could result in continued higher youth employment, Nestler said.

But the labor market has cooled dramatically from 2022, and economists see it reaching a “tentative plateau.”
“Further loosening of the labor market historically tends to hit youth employment,” Nestler said. “People aged 16 to 19 have the least amount of experience, the least formal labor market skills, so as a result, they tend to be the first ones let go.”

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People look at a virtually complete Stegosaurus fossil on display at Sotheby’s on July 10, 2024 in New York City.
Alexi Rosenfeld | Getty Images

Billionaire investor Ken Griffin, founder and CEO of hedge fund Citadel, purchased a late-Jurassic stegosaurus skeleton for $44.6 million at Sotheby’s Wednesday, marking the most valuable fossil ever sold at auction.
The 150 million-year-old stegosaurus named “Apex” measures 11 feet tall and nearly 27 feet long from nose to tail and it is a nearly complete skeleton with 254 fossil bone elements. Apex was only expected to sell for about $6 million.

Griffin won the live auction in New York Wednesday after competing with six other bidders for 15 minutes. He intends to explore loaning the specimen to a U.S. institution, according to people familiar with his plans.
“Apex was born in America and is going to stay in America!” Griffin said after the sale.
Apex shows no signs of combat-related injuries or evidence of post-mortem scavenging, Sotheby’s said. The stegosaurus was excavated on private land in Moffat County, Colorado.
In 2018, Griffin gifted $16.5 million to Chicago’s Field Museum to help fund the display of a touchable cast of the biggest dinosaur ever discovered —  a giant, long-necked herbivore from Argentina.
In 2021, he paid $43.2 million for a first-edition copy of the U.S. Constitution, outbidding a group of cryptocurrency investors. He later loaned it to the Crystal Bridges Museum of American Art in Arkansas. More

The Biden administration announced it will cancel $1.2 billion in student debt for 35,000 workers.
The relief is a result of the U.S. Department of Education’s fixes to the Public Service Loan Forgiveness program.

US President Joe Biden speaks about student loan relief at Madison College in Madison, Wisconsin, on April 8, 2024. 
Andrew Caballero-reynolds | AFP | Getty Images

The Biden administration announced Thursday it will cancel $1.2 billion in student debt for 35,000 workers, as a result of its recent fixes to a popular debt relief program for public service workers.
“Once again, the Biden-Harris administration delivers on its historic efforts to reduce the burden of student debt — making needed and long overdue improvements to the Public Service Loan Forgiveness Program,” U.S. Secretary of Education Miguel Cardona said in a statement.

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 a decade in repayment. But the program has been plagued by problems, making people who qualified for the relief a rarity in the past. Often, borrowers believed they were on track to loan cancellation only to learn at some point that they didn’t qualify on a technicality, such as their loan type or repayment plan.

Under the Biden administration, the U.S. Department of Education gave borrowers a second chance to qualify, as long as they’d been making payments on their loans and working for an eligible employer. Borrowers were able to consolidate their loans and get credit for previously ineligible periods via a waiver opportunity that expired in October 2022.
The Biden administration has so far cleared $69.2 billion in student debt for 946,000 borrowers under PSLF, according to the Education Department. Before President Joe Biden took office, just 7,000 people had received relief through the program.

Legal battles have affected student loan forgiveness

After the Supreme Court struck down the Biden administration’s sweeping debt cancellation plan last summer, the department examined its existing authority to reduce and eliminate borrowers’ balances.
Mainly through fixes to long-troubled loan relief initiatives, the Biden administration has now approved nearly $169 billion in loan forgiveness for roughly 4.8 million people.

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Thursday’s announcement included smaller numbers than the administration’s previous waves of relief. That’s likely due to the recent lawsuits against the Education Department’s new affordable repayment plan for borrowers, known as SAVE. That plan led to expedited loan forgiveness for hundreds of thousands of people.
However, in late June, two federal judges in Kansas and Missouri temporarily halted significant parts of SAVE, after a number of red states argued that the department overstepped its authority and essentially was trying to find a roundabout way to forgive student debt after the Supreme Court’s decision. More

In 2022, 39% of the 134 million families residing in the U.S. did not own the home they lived in, according to estimates from the American Community Survey by the U.S. Census Bureau. 
Among those who did not own their home, roughly 7.9 million families were considered “income mortgage-ready,” Zillow found.
Here are two things to know if you’re in a good financial position to buy.

Halbergman | E+ | Getty Images

Are you ready to buy a home? Many renters have no idea.
Millions of renter households in 2022 would have been able to buy a house that year, according to a new analysis by Zillow, which is based on estimates from the American Community Survey by the U.S. Census Bureau.

In 2022, 39% of the 134 million families residing in the U.S. did not own the home they lived in, according to Census data. Among those who did not own their home, roughly 7.9 million families were considered “income mortgage-ready,” meaning the share of their total income spent on a mortgage payment for the typical home in their area would have been 30% or lower, Zillow found. 
Some people simply choose to rent over buying. But on the other hand, households might be unaware they can afford a mortgage, said Orphe Divounguy, senior economist at Zillow.
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If you’re coming to the end of your current housing lease, it may be smart to see if you’re in a position to buy, said Melissa Cohn, regional vice president at William Raveis Mortgage.
“If rental prices are coming up, maybe it’s a good time to consider [buying instead],” she said.

Getting verbally prequalified from a lender can help, said Cohn. “The first step is trying to understand whether or not it’s worth getting all the paperwork together,” she said.
But keep in mind that you’ll need to go into that important conversation with a working familiarity of crucial facts like your annual income and debt balances.
Understanding the status of your credit and your debt-to-income ratio is a good place to start.

1. There’s ‘no harm’ in checking your credit

In order to know if you’re ready to buy a home, it’s important to understand what your buying power is, said Brian Nevins, a sales manager at Bay Equity, a Redfin-owned mortgage lender.
Some would-be homebuyers might have no idea what their credit situation is or are “apprehensive to even check” out of a mistaken belief that it will impact their credit, he said.
In fact, experts say it’s important to keep an eye on your credit for months ahead of buying a home so you have time to make improvements if needed.
“That’s changed a lot in our industry where we do soft credit verifications upfront now, where it’s going to have no impact on somebody’s credit score,” said Nevins. “There’s really no harm in checking.”
Your credit matters because it helps lenders determine whether to offer you a loan at all, and if so, depending on the ranking, at a higher or lower interest rate. And typically, the higher your credit score is, the lower the interest rate offered.
That’s why being “credit invisible,” with little or no credit experience, can complicate your ability to buy a home. But as you build your credit, you have to strike a balance by keeping your debt-to-income ratio in line. Your outstanding debt, like your student loan balance or credit card debt, can also complicate your ability to get approved for a mortgage.

2. Debt-to-income ratio

A debt-to-income ratio that is too high is the “No. 1 reason” applicants are denied a mortgage, said Divounguy. Essentially, a lender thinks that based on the ratio the applicant may struggle to add a mortgage payment on top of existing debt obligations.
In order to figure out a realistic budget when home shopping, you need to know your debt-to-income ratio.
“Your debt-to-income ratio is simply the amount of monthly debt that you’re paying on your credit report,” said Nevins. “Think car payments, student loan payments, minimum payments on credit cards … any debt that you’re paying and the estimated monthly mortgage payment.”

One rule of thumb to figure out your hypothetical budget is the so-called 28/36 rule. That rule holds that you should not spend more than 28% of your gross monthly income on housing expenses and no more than 36% of that total on all debts.
Sometimes, lenders can be more flexible, said Nevins, and will approve applicants who have a 45% or even higher debt-to-income ratio.
For example: If someone earns a gross monthly income of $6,000 and has $500 in monthly debt payments, they could afford a $1,660 a month mortgage payment if they follow the 36% rule. If the lender accepts up to 50% DTI, the borrower may be able to take up a $2,500 monthly mortgage payment.
“That’s really the max for most loan programs that somebody can get approved for,” Nevins said.
Affordability and financial readiness will also depend on factors like the median home sales price in your area, how much money you can put into the down payment, the area’s property taxes, homeowner’s insurance, potential homeowners association fees and more.
Speaking with a mortgage professional can help you “map out” all the factors to consider, said Cohn: “They give people goalposts, like this is what you need to get in order to be able to purchase.”

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As Social Security’s trust funds face nearing depletion dates, leaders in the White House may be poised to influence reform efforts.
Here’s what the vice presidential picks for 2024 have said about the program’s future.

Trump’s pick for Vice President, U.S. Sen. J.D. Vance (R-OH) arrives on the first day of the Republican National Convention at the Fiserv Forum on July 15, 2024 in Milwaukee, Wisconsin. 
Joe Raedle | Getty Images

The clock is ticking to fix Social Security’s funds.
The next White House administration may have a powerful role in shaping the program’s future.

Social Security’s combined trust funds are projected to last until 2035, at which point 83% of benefits will be payable, the program’s trustees projected earlier this year. Yet the fund Social Security relies on to pay retirement benefits is due to run out sooner, in 2033, when 79% of those benefits will be payable.
Both President Joe Biden and former President Donald Trump have promised not to touch benefits, though Trump alluded to cutting entitlements in a March CNBC interview.
The November race includes the oldest presidential candidates. Biden, at 81, is the oldest American president, while Trump, 78, is among the 20 oldest world leaders.
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Trump’s pick for vice president — Republican Sen. JD Vance of Ohio — adds another perspective on the issue.

Either Vance, 39, or Democratic Vice President Kamala Harris, 59, may be poised to one day occupy the Oval Office. Historically, one-third of U.S. presidents previously served as vice president.
Some experts have expressed reservations about what Vance as VP could mean for Social Security and Medicare.
“Former President Trump, one day he’ll talk about, ‘We need to cut these programs,'” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
“And then the next day, he’ll say, ‘Well, that’s not what I what I was talking about,’ and Vance is kind of cut from the same mold,” Richtman said.

In recent years, Vance has said he does not support cuts to Social Security or Medicare, according to press interviews sent by his Senate team dating back to 2022.
“In 2019, we had about $4.4 trillion of federal outlays …. last year, we expect to collect about $4.4 trillion in taxes,” Vance told Fox Business in January. “So the idea that you need to mess with Social Security and Medicare to get to a long-term fiscal sanity picture … I don’t think that’s right.”
However, the National Committee points out that is an about-face from earlier comments he has made.
The advocacy group has endorsed Biden for the 2024 race, which is only the second time it has done so. When asked whether Trump could have picked a better running mate to support Social Security, Richtman said most Republicans would have been the same.

‘Neither candidate really has a plan’

U.S. Vice President Kamala Harris looks on during a campaign event at Girard College in Philadelphia, Pennsylvania, U.S., May 29, 2024.
Elizabeth Frantz | Reuters

The National Committee has endorsed Democrats’ plans for Social Security, which call for applying additional taxes on wealthy individuals with incomes over $400,000.
As part of the White House administration, Harris has supported those plans. As a senator for California, she also backed a plan for similar reforms called the Social Security Expansion Act, which is now championed by leaders including Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass.
“President [Joe Biden] and I will protect Social Security. Donald Trump will not,” Harris posted on X in June. “The contrast is clear.”
Biden has emphasized protecting Social Security in his State of the Union addresses and budget proposals.
While Democrats have called for requiring the wealthy to pay more into the program while expanding benefits, Republicans have opposed tax hikes.
Ultimately, Social Security reform may require a combination of changes.
Vance, in an interview with The New York Times that was published in June, suggested encouraging “seven million prime-age men not in the labor force” to work.
“You shift millions of those men from not working to working; you increase wages across the board; you increase tariffs; and I think that you buy yourself a whole hell of a lot more than the nine or 10 years that the actuaries say that we have,” Vance told the Times.

Getting more people back to work would help Social Security, but it would be difficult to accomplish, said Andrew Biggs, a senior fellow at the American Enterprise Institute who worked on Social Security reform policy in the President George W. Bush White House.
Moreover, Vance overestimates how far that change could go to repair the program, Biggs said.
“There is a much bigger funding gap than Social Security faced in 1983,” Biggs said. “And neither candidate really has a plan to address it.”
Democrats would beg to differ.
“There’s only one candidate in this race who will protect earned benefits that millions of Americans have paid into all their lives — Joe Biden,” said Joe Costello, a Biden-Harris 2024 spokesperson.
Yet come 2029, Biggs predicts the nation will continue to face the same Social Security dilemma. And the president to take office then — whether it be Vance, Harris or someone else — may be forced to address it.
Correction: Former President Donald Trump is 78 years old. An earlier version misstated his age.

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