Markus Andrews

“PSLF Buyback” helps student loan borrowers who’ve paused their payments at different points to reach debt forgiveness sooner under Public Service Loan Forgiveness.
But the program has been experiencing some challenges of late, including a 72,730-person backlog as of July 31.
Here’s what borrowers should know about the issues, and what you should do about them.

Jose Luis Pelaez Inc | Digitalvision | Getty Images

There’s a way for student borrowers pursuing Public Service Loan Forgiveness to get their debt wiped away sooner than they might have expected.
But that program, called PSLF Buyback, has been experiencing some challenges of late.

Chief among them: As of July 31, there’s a 72,730-person backlog of borrowers waiting to have the Department of Education process their applications, according to a new court filing. That’s up from 65,448 borrowers as of the end of June.
Some of the borrowers CNBC has spoken with have been waiting for half a year or more for answers. Others have only a few months’ payments to make.
PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 120 payments, or 10 years.
Here’s what borrowers need to know about PSLF Buyback.

What PSLF Buyback is

The Biden administration first offered PSLF Buyback in the summer of 2023.

The opportunity allows borrowers who’ve hit 120 months of qualifying public service employment to submit a request to the Education Department to retroactively pay for — or “buy back” — any months they missed because of a forbearance or deferment.
During those payment pauses, borrowers often don’t get credit toward PSLF.

How your buyback offer is calculated

After you’ve submitted your buyback request, the Education Dept. is supposed to send you an offer letter. That should include the number of monthly payments you missed during your public service history, and a chance to pay that bill now in exchange for student loan forgiveness.
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How the government calculates your missed monthly payments is complicated, said higher education expert Mark Kantrowitz. But it’s usually based on your bills before and after the period during which you weren’t making qualifying payments, Kantrowitz said.
Some people who had low incomes are eligible for zero-dollar payments, and they might not have to pay anything to get their debt cleared.
Once you get the offer letter, Kantrowitz said, “You must pay the amount to your loan servicer within 90 days.”

How to apply for PSLF Buyback

You can apply for the Buyback program through the PSLF Reconsideration portal on your Federal Student Aid account, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
Consumer advocates recommend keeping track of when you submitted your buyback request (you should receive a confirmation email) and your recorded number of qualifying PSLF payments, so far. That number should be accessible on your student loan account.

Challenges to buyback

Buyback applications have piled up under the Trump administration.
The latest court filing shows 72,730 PSLF buyback requests were pending with the government as of the end of July. The bottleneck has only worsened since June, when 65,448 applications were under review by the Trump administration. In May, the backlog was close to 59,000.
(The Education Dept. has regularly shared the data on pending buyback requests as part of a lawsuit the American Federation of Teachers filed against it. The teacher’s union alleges the agency is blocking borrowers from their rights.)
“The main issue with the PSLF Buyback program is that it is apparently a labor-intensive process to review these forms, and there isn’t a lot of resources dedicated to the program,” Nierman said.
“So it could take a very long time for borrowers to get a response.”
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The Buyback program became especially popular after courts blocked the Biden-era Saving on a Valuable Education, or SAVE, plan in the summer of 2024.
Millions of student loan borrowers who signed up for SAVE were automatically enrolled in a forbearance. Those borrowers found their progress towards PSLF frozen throughout the SAVE payment pause, even as they continued to work in eligible public service.
“The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment,” said Ellen Keast, deputy press secretary at the Education Department.

‘No harm’ in applying

Despite the delays, “if you are eligible for the Buyback, there’s no harm in submitting the application,” Nierman said.
“But if you can afford payments in other repayment plans, don’t rely solely on the Buyback to get you to 120 qualifying payments, particularly if you only need a few months of credit to reach forgiveness,” she said.

You can apply for Buyback and also submit paperwork to switch into another repayment plan at the same time.
While you can remain in the SAVE forbearance for now, borrowers’ debts began accruing interest again on Aug. 1.

Borrowers who overpay should get refunds

If you continue making payments on your loans after you’ve applied for a buyback offer, or if the Education Department finds you’ve made more than the required 120 qualifying payments for PSLF, you’re entitled to a refund from the government, Kantrowitz said.
He’s heard from people who’ve gotten one in this scenario.

How to complain

If you’re running into issues with your PSLF Buyback request, you can file a complaint with the Education Department’s feedback system at Studentaid.gov/feedback. Problems can also be reported to the Federal Student Aid’s Ombudsman, said Kantrowitz.
But after the Trump administration’s layoffs at the Education Department, “I think there are only one or two people answering complaints right now,” said Stephanie Sampedro, who used to work in the Federal Student Aid office at the agency. Sampedro was terminated in March.
“It might be more effective to complain to their congressmembers,” Sampedro said.
Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, recommended filing a complaint with your state attorney general’s consumer protection office and the Consumer Financial Protection Bureau.
“Document everything,” Herbin added. “Keep records of payments, correspondences and account changes.” More

Tens of thousands of student loan borrowers who are likely eligible for Public Service Loan Forgiveness are stuck in a backlog waiting for the financial relief.
CNBC interviewed three of those borrowers about how the delayed loan cancellation is affecting them.
“I check my email 10 times a day,” said Josh Harner, 38, who submitted his PSLF buyback request eight months ago.

Yurou Guan | Moment | Getty Images

Under the Trump administration, more than 72,000 student loan borrowers who are likely eligible for debt forgiveness are stuck in a backlog of applications waiting for the relief.
Some of them, like 46-year-old April Osteen, owe just a single payment. Others, like Dan Carrigg of Rhode Island, have been waiting a year for the government to respond to their application.

“There are no updates,” Carrigg said. “They tell you nothing.”
The program experiencing the challenges is known as Public Service Loan Forgiveness Buyback.
That opportunity, first offered by the Biden administration, allows borrowers who qualify to have their debt excused under PSLF to retroactively pay the U.S. Department of Education — or “buy back” — any months they missed because they were enrolled in a forbearance or deferment. (Those are different periods during which borrowers’ loan payments are on hold.)
PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 120 payments, or 10 years.
The Buyback program became especially popular after courts blocked the Biden-era Saving on a Valuable Education, or SAVE, plan in the summer of 2024.

Millions of student loan borrowers who signed up for SAVE were automatically enrolled in a forbearance. Those borrowers found their progress towards PSLF frozen throughout the SAVE payment pause, even as they continued to work in eligible public service.

How could I be one payment away from loan forgiveness, only to be told I couldn’t make that final payment?

April Osteen

The latest court filing shows 72,730 PSLF buyback requests were pending with the U.S. Department of Education as of the end of July. The bottleneck has only worsened since June, when 65,448 applications were under review by the Trump administration. In May, the backlog was close to 59,000.
(The Education Dept. has regularly shared the data on pending buyback requests as part of a lawsuit the American Federation of Teachers filed against it. The teacher’s union alleges the agency is blocking borrowers from their rights.)
“The Biden Administration introduced the Public Service Loan Forgiveness buy-back program to allow borrowers to ‘buy’ eligibility into the program — weaponizing a legal discharge plan for political purposes,” said Ellen Keast, deputy press secretary at the Education Department.
“The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment,” Keast said.
CNBC spoke with three of the borrowers in the buyback backlog about how the delayed loan cancellation is affecting them.
“Long delays in PSLF buyback processing must be corrected immediately so that public service workers who have provided essential local services are not deprived of the relief they’ve earned,” said Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending.

‘Uncertainty continues to shape every financial decision’

April Osteen with her dog
Courtesy: April Osteen

Osteen, an administrative coordinator at the University of South Carolina, submitted her buyback request in January. Nearly seven months later, she still hasn’t received an answer from the Education Department.
The government has recorded that she’s made 119 out of the 120 required qualifying payments for PSLF — and so she’s trying to buy back just one monthly payment to get her debt cleared. Her momentum toward the relief was stalled during the SAVE issues.
“I reached out repeatedly to both my loan servicer and the Department of Education, practically begging for help,” said Osteen. “At one point, I remember telling a representative, ‘I just want to pay—please let me pay!'”
“How could I be one payment away from loan forgiveness, only to be told I couldn’t make that final payment?” she said.
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Osteen’s roughly $26,000 remaining student loan balance prevents her from taking on new expenses, even for urgent repairs needed on her house in Simpsonville, South Carolina.
“I need to address issues like diseased Sycamore trees that pose a safety risk, a collapsing wooden fence and serious drainage problems in the backyard and driveway,” she said.
Her monthly student loan payments of up to around $350 have made it difficult to save throughout her career. Without much in savings, she considered taking out a personal loan to pay for the work on her house. But then she thought of her education debt.
“I’m hesitant to take on a new monthly payment while I still owe student debt — debt that should have already been discharged under the PSLF program,” Osteen said.
“This uncertainty continues to shape every financial decision I make.”

‘I check my email 10 times a day’

Josh Harner
Courtesy: Josh Harner

Josh Harner, a teacher at a prison in Illinois, has been waiting for a response from the Education Department to his buyback request since early December — more than eight months ago.
His loan account shows that he’s made 117 qualifying monthly PSLF payments, though he says he’s worked far longer in the public sector. During his over-decade-long career, Harner has helped more than 250 people earn their GED credential, a high school diploma equivalent, he said.
And so he said it’s frustrating to be waiting so long for loan forgiveness. His remaining balance is a little over $120,000.
“I check my email 10 times a day,” Harner, 38, said, about his buyback request.
“I have taken every step — countless phone calls, emails, complaints,” he said. “The federal government can’t handle the management of all these loans.”
The main reason Harner wants his debt erased, he said, is so that he can save more for his 15-year-old son’s upcoming college bills, and hopefully spare him from the stresses of student loans.
“It will feel much better saving the money toward my son’s education,” Harner said. “I didn’t want him to have to worry about how to pay for college or getting into debt to do it.”

‘They tell you nothing’

Dan Carrigg
Courtesy: Dan Carrigg

Carrigg, an associate teaching professor at the University of Rhode Island, submitted his buyback request a year ago, in Aug. 2024. He’s listed as having made 108 out of the 120 qualifying payments.
“I have considerably more than 10 years [of] certified employment,” said Carrigg, 41.
Carrigg has contacted his local lawmakers and his state attorney general about the issue, but has had no success. “I still call Federal Student Aid every week or two,” he said. “I don’t know what else to do.”
He has been unable to get his remaining roughly $15,000 student debt excused.
“I am trying to pay Uncle Sam and taxpayers a lump sum of money to complete and finish off my loan, but I cannot get FSA [Federal Student Aid] to provide me with the offer letter that states how much I should make the check out for.”
“And without that, I cannot pay them,” he said. “It is maddening.”

Throughout his life, Carrigg said, he’s needed to make a number of sacrifices because of his student debt.
He’s taken on a second teaching job at night, and forgoes many discretionary purchases.
“We don’t take vacations every year,” he said.
With his student debt forgiven, he and his wife would be able to direct more money toward their mortgage with the goal of no longer having a housing payment in their later decades.
“We’re not so young anymore,” Carrigg said.
“And we can start saving a bit more for retirement, which is now coming up faster and faster,” he said. “We’re getting closer to Medicare age than student loan age.” More

President Donald Trump’s “big beautiful bill” enacted trillions in tax breaks. But some residents in certain states and counties could see a bigger benefit.
In 2026, individual taxpayers will save an average of $3,752, according to a Tax Foundation analysis released this week. 
The highest average tax breaks for 2026 could be in Wyoming, Washington, Massachusetts, Florida and the District of Columbia, the report found.

Gary Yeowell | Digitalvision | Getty Images

President Donald Trump’s “big beautiful bill” enacted trillions in tax breaks — and some residents of certain states and counties could see bigger benefits.
In 2026, individual taxpayers will save an average of $3,752, according to a Tax Foundation analysis released this week. That figure falls to $2,505 in 2030 as some tax breaks expire, such as the $40,000 limit on the federal deduction for state and local taxes, known as SALT.

After falling for several years, the average tax cut could rise to $3,301 in 2035 once inflation boosts the value of permanent cuts. “That’s an interesting pattern” over the 10 years, Garrett Watson, director of policy analysis at the Tax Foundation, told CNBC.
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The average tax savings vary by state or county, as well as individual tax circumstances, the analysis found. “A lot of it does correlate with income,” Watson said. However, top earners can skew the average tax cuts higher, he said.  
Here are the top 10 average tax cuts for 2026 by state, based on the Tax Foundation analysis:

Wyoming: $5,374
Washington: $5,373 
Massachusetts: $5,138
Florida: $4,998
District of Columbia: $4,922 
Connecticut: $4,683
New Hampshire: $4,597
Colorado: $4,260
Nevada: $4,220
California: $4,141

By comparison, taxpayers in Mississippi, West Virginia, New Mexico, Kentucky and Alabama will see the lowest average tax cuts in 2026, all below $3,000, according to the analysis. 

Trump’s tax cuts by county

Derek Diluzio | Cavan | Getty Images

The Tax Foundation’s analysis also reviewed Trump’s tax cuts at the county level, based on the latest IRS data from 2022. Some of the largest average tax cuts by county for 2026 were among resort towns, the report found. 
For example, researchers estimate that Teton County in Wyoming, which includes Jackson Hole, could see an average tax cut of $37,373 per taxpayer in 2026. Meanwhile, Pitkin County, Colorado, which covers Aspen, could be $21,363. In Summit County, Utah, including Park City, the average tax cut could be $14,537 in 2026. 
Of course, higher-income individuals are “greatly skewing the average tax cut” in some of these resort areas, Watson said.  
By comparison, the smallest average tax cuts are found in rural counties, such as Loup County, Nebraska, where the average tax break could be only $824 in 2026.  

Who benefits most from Trump’s tax cuts

Trump’s legislation could benefit higher earners while hurting lower-income Americans, according to a Congressional Budget Office report released this week.
On average, “household resources will increase” between 2026 and 2034, mostly due to lower federal income taxes, Phillip Swagel, director of the Congressional Budget Office, wrote in the report. 
But the effects “vary by channel and across the income distribution,” he wrote.     
Top earners could see a $13,600 benefit per year in 2025 dollars, while the bottom percentile would see resources fall by $1,200 annually, the CBO report found. The shortfall for lower-income Americans would mainly be due to cuts to Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. More

The average 30-year fixed-rate mortgage was 6.58% for the week ended Thursday, Aug. 14, down from 6.63% the week prior, according to Freddie Mac.
Mortgage rates have come down a point and a half from October 2023 when rates almost hit 8%, according to Jessica Lautz, deputy chief economist at the National Association of Realtors. 
Here’s how to know if it’s time to refinance, according to experts.

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Mortgage rates have been declining, making conditions favorable for some homeowners to refinance, experts say. 
The average 30-year fixed-rate mortgage was 6.58% for the week ended Thursday, Aug.14, down from 6.63% the week prior, according to Freddie Mac.

Mortgage rates have come down a point and a half from October 2023, when rates almost hit 8%, according to Jessica Lautz, deputy chief economist at the National Association of Realtors. 
“That’s a substantial improvement,” said Lautz.
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Lower mortgage rates often result in lower borrowing costs for home loans. Many homeowners have already jumped on the opportunity. 
“Refinance applications increased to their strongest pace in four weeks,” Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said in an Aug. 6 report. The share of refinance applications increased to roughly 42% of total applications, the highest level since April, according to the findings.

While most homeowners have mortgage rates that are too low to benefit, about 18.8% of outstanding mortgages have interest rates of 6% or higher, according to Realtor.com.
Homeowners who bought their properties in recent years when rates were high may want to consider refinancing, experts say. 
“A much more common mistake is for people to not realize when rates have dropped that they had an opportunity to refinance and to take advantage of it,”  said Chen Zhao, head of economics research at Redfin. 

Why mortgage rates have been declining

Mortgage rates have been falling in recent months. In May, the 30-year mortgage rate peaked at 6.89%, according to Freddie Mac data. The rate has been on a bumpy slope since then.
That’s despite the Federal Reserve holding interest rates steady at 4.25%-4.5% since December.
The federal funds rate sets what banks charge each other for overnight lending and directly impacts borrowing and savings rates for Americans. 
Yet, mortgage rates don’t follow the federal funds rate set by the central bank. Instead, they closely track the 10-year Treasury yields, which have been declining because of recent weakness in economic data, according to experts.
“The bond market is super sensitive and it reacts immediately to the data,” said Melissa Cohn, regional vice president of William Raveis Mortgage.

There’s a possibility that the Fed cuts interest rates in September, but the bond market may have already priced in that decision, said Zhao. 
Overall, experts agree that it’s worth watching where rates are, to spot opportunities to refinance. 
“People should start paying attention to where rates are going,” said Cohn. 

When it makes sense to refinance a mortgage

As mortgage rates come down, it’s worth considering refinancing a mortgage that has an interest rate over 6%, and especially if it’s 7% or higher, experts say. 
However, before you start the process, consider your plans: refinancing makes more sense if you expect to live in or own the property for a few more years.
That’s because refinancing a mortgage is not free — there are closing costs and certain fees that come with it, and you’d want to amortize the costs over the term that you expect to be in your home, said Cohn.
If you plan to keep the home for more than a year, refinancing makes sense. But if you plan to list your house for sale in the next six months, it may not be worth it, said Zhao.

Generally, refinancing costs will depend on where you live and the size of the loan, experts say.
You can expect to pay between 2% and 6% of the new loan balance, according to Bankrate. For example, if you’re refinancing a $150,000 mortgage, you might pay from $3,000 to $9,000 in closing costs. 
You also want to make sure rates have “dropped sufficiently” for you to see real savings from the refi, said Cohn. 
There are different rules of thumb of what’s considered to be “in the money,” or when rates have come down enough. But typically, if interest rates are about 50 basis points lower than your current rate, you should look into it, Zhao said.
If it’s more than that or a full percentage point lower, “you should almost certainly refinance,” she said.

Don’t miss these insights from CNBC PRO More

Roughly 50 years ago, nearly half of all 25- to 34-year-olds had reached traditional benchmarks of adulthood, such as moving out of their parents’ home, getting married or having kids, according to a U.S. Census Bureau working paper.
These days, less than a quarter of young adults have done the same.
“Many young adults now view marriage and children as goals to pursue only after securing financial independence,” says certified financial planner Douglas Boneparth.

Mellisa Soehono, 29, says she would “definitely” like to start a family someday.
“I do get a little bit of ‘FOMO’ seeing my friends around my age getting married, settling into a new home — and I’m just not in a place where that is really realistic for me,” said the public relations executive in Jacksonville, Florida.

To be sure, Soehono is not alone. Fewer 25- to 34-year-olds are getting married or having children, or even working full time or moving out of their parents’ home, according to a recent U.S. Census Bureau working paper.
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Compared to previous generations, the share of young adults reaching those four key benchmarks notched a “significant drop,” the Census statisticians found.
Roughly 50 years ago, almost half of 25- to 34-year-olds achieved those milestones, which “mark the transition from adolescence to adulthood,” according to the analysis of the Census Bureau’s American Community Survey data — today, less than a quarter have done the same.

Jhorrocks | E+ | Getty Images

Soehono, who also has student debt from college, said she is not in a financial position to buy a home or start a family. “Where I am at with my life is focusing on my career because that’s really all I have right now,” she said.
In addition to hefty student loan bills, the recent runup in inflation helped cause rent and housing prices to jump, worsening an affordability crunch for many just starting out.
The median age of first-time homeowners is now 38 years old, an all-time high, according to a 2024 report by the National Association of Realtors. In the 1980s, the typical first-time buyer was in their late 20s.

The ‘economic bar’ for milestones is rising

Financial pressures — including rising housing costs, high rent burdens and the need for greater economic stability — are “major factors delaying family formation,” according to Douglas Boneparth, a certified financial planner and the president of Bone Fide Wealth in New York.
“Living with parents has become more common, and many young adults now view marriage and children as goals to pursue only after securing financial independence,” said Boneparth, a member of the CNBC Financial Advisor Council.
“The economic bar for starting a family has risen, with affordability concerns shaping the timing and sequencing of life milestones more than in prior generations,” he said.
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As Social Security marks the 90th anniversary of the program’s creation, the benefits millions of Americans receive may be poised to change.
The trust funds the program relies on to help pay benefits face a shortfall in the next decade, which may prompt tax increases, benefit cuts or other changes.
CNBC.com spoke to lawmakers about the solutions they envision for the program’s future.

President Franklin D. Roosevelt signs the Social Security Act into law on Aug. 14, 1935.
FPG | Archive Photos | Getty Images

Ninety years ago, President Franklin Delano Roosevelt signed the Social Security Act, which created the program that now sends monthly benefit checks to millions of Americans, including retirees, disabled individuals and families.
But by the time the program celebrates its centennial, benefits may not look the same as today’s Social Security payments.

The reason: Social Security’s trust funds, which the program relies on to help pay benefits, are facing a looming shortfall.
Starting in 2033 — two years before its 100th anniversary — the program may only be able to pay 77% of scheduled benefits for retirees, their families and survivors, Social Security’s trustees projected in an annual report released in June.
However, should those funds be combined with Social Security’s trust fund for disability benefits, as has happened in prior emergencies, payments may be cut one year later, in 2034. At that point, 81% of scheduled benefits would be payable, Social Security’s trustees project.
Importantly, Social Security benefits would not disappear entirely. The program would still have ongoing income from payroll taxes to help fund benefit payments.
That scenario is not inevitable. Changes to the program may be enacted sooner to shore up its funding and prevent sudden benefit cuts.

Most, 83%, of surveyed Americans think Social Security reform should be a top priority for Congress, even if it means benefit cuts or tax increases for future beneficiaries, according to a new poll from the Bipartisan Policy Center’s American Savings Education Council. The group polled more than 4,000 adults.
“This is the time for action,” said Sen. Bill Cassidy, R-Louisiana, who is among the lawmakers pitching a plan to help restore the program’s solvency, told CNBC.com.

Pitch for a new $1.5 trillion investment fund

Republican Sen. Bill Cassidy of Louisiana speaks to the press on Capitol Hill on Feb. 10, 2021.
Nicholas Kamm | AFP | Getty Images

Cassidy has teamed up with Sen. Tim Kaine, D-Virginia., to co-lead a bipartisan pitch — the centerpiece of which is a new $1.5 trillion investment fund for Social Security, separate from Social Security’s current trust funds.
The initial $1.5 trillion outlay would be borrowed. Because the money would be held in escrow and could be liquified, it would not increase the national debt, Cassidy said.
The funds would be invested more aggressively than Social Security’s current trust funds, which are invested in U.S. Treasury securities. Because those investments are backed by the full faith and credit of the U.S. government, they are secure. However, the average rate of return over a one-year period was around 2.5% in 2024.
In contrast, the S&P 500 has returned an annual average of around 10%, though those results vary from year to year.
Investing the proposed separate investment fund in stocks, bonds and other investments could cover an estimated 70% of Social Security’s trust fund shortfall, Cassidy said. That would make it much more doable for lawmakers to address the remaining 30%, he said.

The senators’ plan does not include any benefit cuts or tax increases for seniors, Cassidy said. It would provide benefit increases for two cohorts — beneficiaries age 80 and older who are at less than 200% of the federal poverty level, and low earners who have a long work history earning low wages.
Lawmakers could consider increasing the size of the investment fund to help cover the rest of the shortfall, he said.
Rights to manage the fund would be left to a bidding process, which could result in lower fees and higher returns, Cassidy said.
Critics, including Rep. John Larson, D-Conn., have said investing in other securities as the senators’ plan suggests would privatize Social Security and therefore threaten Americans’ retirement security.
In response, Cassidy points to the federal Railroad Retirement system, which in 2001 moved from investing solely in government bonds to more aggressive instruments, including stocks. That change was approved by lawmakers on both sides of the aisle and has helped the program operate with a positive balance today.
Still, some experts are dubious.
In a recent Wall Street Journal op-ed, Andrew Biggs, a senior fellow at the American Enterprise Institute, said while he applauded the first bipartisan plan to fix Social Security in two decades, he questions whether the plan could work.
Among the concerns he details are the amount of money that the plan requires the government to borrow, as well as the increased investment risk that would be required without a guarantee of higher returns.

Another proposal calls for the wealthy to pay more

Rep. John Larson, D-Conn., and other lawmakers discuss the Social Security 2100 Act, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
Drew Angerer | Getty Images News | Getty Images

Cassidy and Kaine are not the only lawmakers looking at potential solutions to solve Social Security’s dilemma.
Larson has a plan that has been reintroduced in multiple sessions of Congress that would provide benefit increases while increasing taxes on the wealthy. The last time Social Security was meaningfully enhanced was in 1971 under President Richard Nixon, Larson said in an interview with CNBC.com.
More than 5 million Americans currently receive below poverty-level checks from Social Security, according to Larson.
Larson’s most recent proposal from 2023 would temporarily increase benefits for all beneficiaries, while also providing specific enhancements for those receiving minimum benefits; widows or widowers in two-income households; and children of deceased, disabled or retired workers who are full-time students. The plan also proposes changing the way annual cost-of-living adjustments are calculated.
To pay for those benefit increases, Larson’s plan calls for income over $400,000 to be subject to payroll taxes. In 2025, workers stop contributing to Social Security for the year once they reach an income of $176,100. Both employers and employees pay a 6.2% tax on wages up to that threshold.
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The Bipartisan Policy Center poll finds a majority of Americans support lifting the cap on income subject to payroll taxes, with 65% of Democrats and 62% of Republicans. That includes a “significant majority” of respondents with annual household incomes over $200,000, according to the results.
Larson’s plan also called for a separate 12.4% tax on net investment income for taxpayers making over $400,000.
Larson plans to reintroduce his plan in the current session of Congress with some tweaks.
“We’ll be rolling out a presentation in September that will include not only protecting Social Security, but also enhancing it,” Larson said.
The plan will also make it Congress’ responsibility to act more frequently to help ensure benefits continue to meet individuals’ needs, he said.
“I think that that’s got to be paramount to keeping this in check,” Larson said.
Larson plans to push for a vote on his bill. But he also wants an open debate.
“There has to be a public discussion,” Larson said.

What Americans want from Social Security

A person holds a sign reading ‘Save Our Social Security’ in support of fair taxation near the U.S. Capitol in Washington, D.C. on April 10, 2025. Tax justice advocates attended a rally to speak out against President Trump’s tax cuts for the wealthy, and to urge members of Congress to intervene.
Bryan Dozier | Afp | Getty Images

Most Americans — 64% of Democratic voters and 61% of Republicans — want Congress to work together across party lines to reform Social Security, the Bipartisan Policy Center found in its recent poll.
That’s as 41% of surveyed Americans expect Social Security will be their primary source of income in retirement, according to the BPC. Moreover, 74% of Americans worry Social Security will run out before they retire, while 80% worry Congress will cut benefits.
Nevertheless, the poll results show Americans would welcome a “comprehensive, balanced reform package that entails both benefit adjustments and tax increases,” said Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center.
Increasing taxes on the wealthiest 1% to help repair the program’s finances had the most support among BPC’s poll respondents, with 85% of Democrats and 72% of Republicans. That’s in contrast to the 65% of Democrats and 62% of Republicans who support a higher cap on payroll taxes.
A majority of voters also support adjusting benefits for those most in need, with 63% of Democrats and 62% of Republicans; reducing benefits for higher income individuals, with 64% of Democrats and 61% of Republicans; and increasing the amount that both employees and employers pay into the program, with 61% of both Democrats and Republicans. Most voters also support encouraging legal immigration that would result in more workers paying into the program, with 64% of Democrats and 54% of Republicans.
The urgency of addressing Social Security’s funding woes will increase over time.
Two new laws have provided generous enhancements for certain Social Security beneficiaries. The Social Security Fairness Act increased benefits for some public pensioners, while President Donald Trump’s “big beautiful” budget and tax package provides a tax deduction for seniors.
The changes in both laws will accelerate the trust fund depletion dates. The Fairness Act was included the Social Security trustees’ latest projections. The more recent “big beautiful” legislation will move the insolvency date for the retirement trust fund to late 2032 up from the early 2033 trustees’ projection, according to the Committee for a Responsible Federal Budget.
Senators who are elected in 2026 will be in office during those projected depletion deadlines, Sprick said.
As the trust fund depletion dates come closer, there will be more discussion about Social Security’s future on Capitol Hill, Sprick said. The current proposals on Capitol Hill are a start, he said.
“We’ve put this off for way too long; the political process moves very slowly,” Sprick said. “But that does not negate the fact that these conversations are moving in the right direction.” More

ETF Strategist

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ETF Strategist

Relatively weak job growth and the specter of higher inflation ahead due to tariffs mean investors may not want to take outsized risk, according to market pros.
Investors have chased lofty returns for crypto and certain tech companies, one financial advisor said.
Rebalancing, holding a diversified portfolio, and having an appropriate mix of stocks and bonds are key in this environment.

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Data suggests the U.S. economy may be in a precarious spot — and investors may be wise not to take outsized risks with their portfolios for fear of steep losses, experts said.
“This is not the environment to be a hero in,” Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote this month in a newsletter.

In other words: Stick to your long-term investment plan, including an appropriate asset allocation and time frame to reach your goals, experts said. Avoid the temptation to funnel a big chunk of money into high-flying shiny objects like individual technology stocks or cryptocurrency, they said.
“You need to own a basket of quality assets and investments, hold your breath and let markets do their work,” Cox said in an interview with CNBC.
To be sure, this is sound perennial advice typically offered by financial planners.
But some market-watchers caution that economic headwinds could serve up ample volatility in the coming months.
“I think there are a lot of reasons to be optimistic, but also cautious at the same time,” said Winnie Sun, co-founder of Sun Group Wealth Partners, based in Irvine, California, and a member of CNBC’s Financial Advisor Council.

Economic headwinds

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The job market appears to have weakened considerably, for example.
Employers in the public and private sectors added 35,000 jobs, on average, over the past three months, according to federal data.
Job growth from May to July is happening at a “pace you normally see around or in recessions,” Cox wrote.
It’s also down from average monthly growth of 123,000 jobs during the same three-month period of 2024, and from 111,000 in the first three months of 2025.

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The size of the U.S. labor force has declined for three consecutive months, which hasn’t happened since 2011, Cox wrote.
“The job market is in a precarious spot after months of slowing consumer spending,” Cox wrote. “The American consumer drives the economy, and the economy ultimately drives the direction of markets,” she added.
Economists also worry about inflation reigniting as tariffs levied by the Trump administration work their way into higher prices for consumer goods and services.
There have been some signs of that in recent months, and many economists expect that inflationary pressure to bite harder in coming months.

‘People are feeling like they’ll be left behind’

Despite these headwinds, experts say the economy isn’t in dire shape. The stock market has also continued to march to new highs, with the S&P 500 stock index up about 10% since the start of the year.
Many of Sun’s clients have shown urgent interest in artificial intelligence and crypto amid lofty returns, versus more bread-and-butter long-term planning, she said.
Shares in tech giants like Meta, Microsoft and Nvidia are up about 34%, 24% and 36%, respectively, this year, for example. Bitcoin prices are also up over 25%.
It’s a “hurry-up-and-invest” mindset, Sun said.

“A lot of people are feeling like they’ll be left behind,” she said. “But we don’t feel like we have the full picture yet on where the U.S. is economically.”
Tariff policy has whipsawed in recent months, leaving markets and investors grasping for answers as new import duties are announced, delayed or rescinded in a rapid-fire fashion, according to market-watchers.
“Right now, we feel it’s best to stick with diversified and long-term plans,” Sun said.
“A lot of the decisions being made right now are not financially driven,” she said. “I think it’s much more emotions-driven.”

Diversification and rebalancing are ‘key’

Sun advises investors to be well-diversified, and avoid the temptation to over-allocate their portfolio to growth-oriented sectors like technology. Having a well-diversified portfolio diversifies risks in the event lackluster economic data send markets tumbling, she said.
Exchange-traded funds or mutual funds, which are baskets of several different securities like stocks and bonds overseen by professional asset managers, can help the average investor stay diversified, she said.
ETFs often carry relatively low fees compared with mutual funds, and so can offer a cheap way to diversify.
Rebalancing more frequently in this environment is “key,” Cox said.
That entails ensuring your asset allocation hasn’t been thrown out of whack if certain segments of your portfolio outperform or underperform for a period of time.
“You never want to hit a market selloff and be more exposed to it than you think,” Cox said.
Jacob Manoukian, U.S. head of investment strategy, at J.P. Morgan Private Bank, cautions that taking too much risk off the table could also have adverse outcomes for investors.
Companies continue to have strong corporate earnings despite some relatively weak economic data — a dynamic that can persist for a while, he said.
“It’s hard to give advice to reduce risk substantially when corporate earnings are as strong as they are,” Manoukian said.
“When companies are surprising to the upside to that degree, we’d encourage investors and our clients to have the right amount of risk for their plan and not reduce risk unduly — that’s a way to underperform,” Manoukian said. More

If you’re eyeing Roth conversions, President Donald Trump’s “big beautiful bill” could make the strategy more complicated, financial experts say.
These transfers can kickstart tax-free growth, but the move triggers upfront taxes on the converted balance.
There are several factors to consider, including Trump’s new tax breaks, before making Roth conversions.

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If you’re eyeing a Roth conversion, President Donald Trump’s “big beautiful bill” could make the strategy more complicated, according to financial experts.
Roth conversions transfer pretax or nondeductible individual retirement account funds to a Roth IRA, which starts future tax-free growth. The trade-off is paying regular income taxes on the converted balance.

Trump’s new tax cuts could make Roth conversions more appealing for some investors, experts say. But incurring too much income could impact eligibility for certain tax breaks.
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When weighing Roth conversions, you need to know the multi-year state and federal tax impact, said Judy Brown, a certified financial planner who works at SC&H Group in the Washington, D.C., and Baltimore area.
For example, if you’re nearing Medicare age or already enrolled, boosting your earnings could increase income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums.
The strategy is “looking at a lot of different pieces, and figuring out the optimal place for each client,” said Brown, who is also a certified public accountant.

‘Fill up the lowest brackets’

Roth conversions have always been about “tax bracket management,” said CFP Patrick Huey, owner of Victory Independent Planning in Portland, Oregon. 
When making Roth conversions, advisors typically incur enough regular income to “fill up the lowest brackets,” he said. 
Your federal brackets are based on each part of your “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Trump’s temporary tax breaks

Before Trump enacted the One Big Beautiful Bill Act, lower federal income tax brackets were scheduled to sunset after 2025, which would have made converted balances more expensive.
Trump’s legislation made the lower tax rates permanent, but several new tax breaks — deductions for older Americans, tipped workers and consumers with overtime pay and car loan interest — are temporary with varying earnings limits. 
These tax breaks, which are available from 2025 through 2028, could offer more room for Roth conversions before hitting the next tax bracket, experts say.
Once these cuts expire, you could be “paying more for the exact same Roth conversion,” said CFP Ashton Lawrence at Mariner Wealth Advisors in Greenville, South Carolina.

Comparing tax breaks

While Trump’s new tax cuts could make more space in the lower tax brackets, higher income from Roth conversions can impact eligibility, experts say.
For example, the additional $6,000 deduction for older Americans starts to phase out, or get smaller, once modified adjusted gross income exceeds $75,000 for single filers or $150,000 for married couples filing jointly.
It probably still makes sense to convert funds at 22% or 24% tax rates now — and skip the $6,000 deduction — to avoid the 30% brackets for large pre-tax required withdrawals later, Brown said.
Most retirees must take required minimum distributions, or RMDs, from pretax retirement accounts starting at age 73 or face an IRS penalty. More