Markus Andrews

After a half-decade pause of collection activity on federal student loans, the Trump administration announced on April 21 that it would resume seizure of defaulted borrowers’ tax refunds, paychecks and Social Security benefits.
CNBC spoke with some of the student loan borrowers bracing for those financial consequences.

US Secretary of Education Linda McMahon attends the International Women of Courage Awards Ceremony at the State Department in Washington, DC, on April 1, 2025.
Brendan Smialowski | Afp | Getty Images

Jason Collier, a special education teacher in Virginia, often needs to wait until payday to fill up the gas tank of his car — and in the meantime hopes he doesn’t run out.
“Money is tight when you’re a teacher,” Collier, 46, said.

Now he’s afraid that the U.S. Department of Education will soon garnish up to 15% of his wages because he’s behind on his student debt payments. Collier said he hasn’t been able to meet his monthly bill for years, while juggling the expenses of raising two children and medical expenses from a cancer diagnosis.
If his paycheck is garnished, “it would just be more of a pinch,” Collier said. “If I need a car repair, or something comes up, I might not be able to do those things.”

The consequences are punitive and sometimes tragic.

James Kvaal
former Education Dept. undersecretary

After a half-decade pause of collection activity on federal student loans, the Trump administration announced on April 21 that it would once again seize defaulted borrowers’ federal tax refunds, paychecks and Social Security benefits.
More than 5 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers within a few months, according to the Education Department.
The Biden administration focused on extending relief measures to struggling borrowers in the wake of the Covid pandemic and helping them to get current. The Trump administration’s aggressive collection activity is a sharp turn away from that strategy.

“Borrowers should pay back the debts they take on,” said U.S. Secretary of Education Linda McMahon in a video posted on X on April 22.

More than 42 million Americans hold student loans, and collectively, outstanding federal education debt exceeds $1.6 trillion. The Education Department can garnish up to 15% of defaulted borrowers’ disposable income and federal benefits, as well as their entire federal tax refunds.
“In an environment where the cost of living remains stubbornly high, this kind of withholding from your income can pose real problems when trying to make ends meet, and force people into choosing between vital expenses,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
Most people who default on their student loans “truly cannot afford to pay them,” James Kvaal, who served as U.S. undersecretary of education for former President Joe Biden, said in an April interview with CNBC.
“The consequences are punitive and sometimes tragic,” Kvaal said.

A retiree who can’t go home now

Marceline Paul and her grandson
Courtesy: Marceline Paul

Marceline Paul is homesick.
But if the Trump administration begins garnishing her Social Security benefit next month, there’s no way she’ll be able to afford a trip back to Trinidad. She moved from there to the United States in the ’70s.
“I need to go home,” said Paul, 68, who worked for decades in the health care industry and retired during the Covid-19 pandemic to take care of her sick mother.
The student debt she had taken on for her daughter was the last thing on her mind during that time, she said: “I couldn’t focus on anything else.”
She felt terrified when she received a recent notice from the Education Dept. that her retirement check could be offset. Nearly all of her income comes from her monthly Social Security benefit of around $2,600. Social Security benefits can generally be reduced by up to 15% to repay student debt in default, so long as beneficiaries are left with at least $750 per month.
“When I saw that email, it made me sick to my stomach,” Paul said.
Already on a tight budget in retirement, the garnishment will force her to cut back on her everyday expenses, skip necessary repairs on her house in Maryland and forgo traveling to her home country.
“I don’t know the last time I had a vacation,” she said. “I’ve paid into the system and I should be able to retire.”
More than 450,000 borrowers ages 62 and older in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found earlier this year.

Collection activity begins despite chaotic time

Over the roughly five-year period during which the Education Dept. suspended its collection of federal student loans, there have been sweeping changes and disruptions to the lending system.
Millions of borrowers who signed up for the Biden administration’s new repayment plan, known as SAVE, or the Saving on a Valuable Education program, were caught in limbo after GOP-led lawsuits managed to get the plan blocked in the summer of last year. Many of those borrowers will now have to switch out of a Biden-era payment pause and into another repayment plan that will spike their monthly bill.

But in recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers.
Now some student loan borrowers report waiting hours on the phone before being able to reach someone about their debt, despite the Trump administration telling borrowers to contact it to get current.
The Education Department did not respond to a request for comment.

Borrowers try and fail to get current on their loans

Kia Brown, who works as a management analyst at the Department of Veterans Affairs, wants to start repaying her student loans again — but she said she’s run into numerous challenges trying to do so.
“The biggest issue I have is the lack of information,” said Brown, 44.
When she signed up for Biden’s SAVE plan, she could afford her monthly student loan bill of $150. But now that plan is blocked and she’s worried she won’t be able to afford her new payment.
She received conflicting information over whether her student loan servicer was Mohela or Navient (millions of people have had their accounts transferred between companies in recent years.) When she tried to reach someone at Navient about her student debt, she was on hold for more than two hours.
Meanwhile, a representative at Mohela couldn’t tell her what her new student loan payment would be, though she was quoted $319 by the company’s automated phone system.
Mohela and Navient did not respond to a request for comment.
Brown is still not sure which company is managing her account.
“The narrative is that people are dodging their payments,” Brown said, but added that she doesn’t think that’s true for many borrowers. “I truly believe many people will be blindsided due to lack of guidance on how to repay.”
If she’s not able to reach someone at the Education Dept. to get current on her payments and her wages are garnished, it’ll be a significant hardship for her family, she said.
“We’re living paycheck to paycheck,” she said. “I’m lucky if I can even put aside $100 for myself.” More

Jakub Porzycki | Nurphoto | Getty Images

Company: Couchbase Inc (BASE)
Business: Couchbase provides a cloud database platform for modern applications. Its database is engineered for high performance at scale to serve the needs of mission-critical applications that enterprises run their businesses on. Its products include Couchbase Capella, Couchbase Server and Couchbase Mobile. Its Couchbase Capella is a fully managed, automated and secure database-as-a-service that simplifies database management by deploying, managing and operating Couchbase Server across cloud environments. Its Couchbase Server is a full-featured, multi-service NoSQL database. It provides a comprehensive SQL-compatible query language, SQL++, that allows for a range of data manipulation functions. Its Couchbase Server can be deployed on premises or on any cloud. Its Couchbase Mobile is a full-featured embedded NoSQL database for mobile and edge devices that enables an always-on experience with high data availability.
Stock Market Value: $1.01B ($18.77 per share)

Stock chart icon

Couchbase in 2025

Activist: Irenic Capital Management

Ownership: n/a
Average Cost: n/a
Activist Commentary: Irenic Capital was founded in October 2021 by Adam Katz, a former portfolio manager at Elliott Investment Management, and Andy Dodge, a former investment partner at Indaba Capital Management. Irenic invests in public companies and works collaboratively with firm leadership. Their activism has thus far focused on strategic activism, recommending spinoffs and sales of businesses.
What’s happening
Irenic has taken a position in Couchbase (BASE).
Behind the scenes
Couchbase (BASE) provides a cloud database platform for modern applications. There are two types of databases: relational, such as Amazon, Oracle and Sybase; and document, intended for agile and mobile-centric applications. There are only two public companies operating in the documents database space: MongoDB and Couchbase. With few direct peers, the company has built a rock-solid business with enterprise-grade platforms used in applications from mobile apps to airline systems. The company originally went public on Feb. 22, 2021, but has since failed to impress in the public markets, with shares down over 20% since its initial public offering.

The primary problem facing Couchbase is one common to young tech companies – the pressure to deliver high growth to meet the demands of its investor base. The company has done just that as revenue has increased every year since its IPO at 19.39% on average and gross margins have been incredibly high and consistent between 87% and 89% each year. However, reaching these revenue goals has come at the detriment of the company’s margins and profitability. In 2024, selling, general and administrative expenses was 91.94% of revenue, staggeringly high for almost any other company, but just slightly high for Couchbase, which has averaged 91.25% since its IPO. For context, MongoDB’s SG&A expense was 54.34% of revenue in 2024. Among other things, Couchbase has vastly overhired sales reps and managers to meet their growth targets. As a result, there isn’t enough business to go around: While peers’ reps hit their attainment goals at a 70% to 80% average, Couchbase’s reps only hit them at 40% to 50%. In sum, Couchbase is a good company with a great product that is organically growing by mid double digits, but it is so focused on growth at all costs, that it is decimating its operating margins by investing millions of dollars to squeeze out a few additional percentage points of growth. But this is not completely management’s fault. We have been experiencing a market where growth is king and any erosion in growth rates could start a company’s stock on a downward trajectory.  
Enter Irenic Capital, which has taken a significant stake in Couchbase and made the company one of its five largest positions. There are two paths for an activist to potentially create value from this point. The first is through an operational restructuring: right-sizing management and the salesforce, optimizing capital allocation and improving operating margins while continuing to organically grow. This path would require a lot of time, money and heavy lifting from both Couchbase and the activist, likely involving Irenic securing board representation followed by years of collaboration and restructuring. Doing this could get the company at or over the Rule of 40 with lower growth rates but much higher operating margins, but it may not be pretty along the way. The stock would be likely to decline in the short term as growth declines as operating margins rise. This brings us to the second option, which is to explore a sale of the company. While we are not generally fans of “sell-the-company” activism as it is often short-term minded in nature, there is a rationale for it here as the best way to maximize shareholder value on a risk-adjusted basis. The steps outlined above required to maximize the value of this business would best be done in private where there is no stock price fluctuation based on quarterly guidance and growth rates. A sale to either a larger strategic or financial acquirer would allow Couchbase to right-size its costs and pursue more organic, margin-friendly growth away from the pressures of the public market. Given both the viability of the options at hand and Irenic’s track record of calling for and successfully assisting companies in take-private transactions, we expect that the firm’s plan will follow the latter.
As a growing company with a unique and stable business model, there would be no shortage of potential acquirers for Couchbase. There have been many strategic takeouts in the data/tech space including IBM’s announcement that it would acquire DataStax and Progress Software’s acquisition of MarkLogic. Moreover, with the recent push for consolidation in the space, Couchbase would also be a viable strategic asset for larger players like Amazon, Microsoft’s Azure, Alphabet’s Google or other industry leaders looking to bolster their data offerings. However, it seems like the more likely outcome is a take-private transaction via private equity, and one private equity investor could be a good contender. Haveli Investments, a PE firm founded by former Vista Equity Partners president Brian Sheth, is the largest shareholder in Couchbase with an approximately 9.8% ownership based on its latest 13D filling. Haveli is not a frequent 13D filer, nor is it the firm’s strategy to take minority stakes in public companies. This appears to be more of a toehold for Haveli in a company it thinks is undervalued and might want to own. Haveli has only filed one other 13D in its history, on Blend Labs, which led to a strategic partnership shortly thereafter. While there aren’t many public takeout comps to Couchbase, the closest would be Clayton, Dubilier & Rice and KKR’s purchase of Cloudera in 2021 for $5.3 billion, or around 5.2-times revenue. While 5.2-times would imply only a 20% premium for shareholders, that might be acceptable to Irenic as Couchbase has closed as low as $13.44 per share over the past month and Irenic likely has a lower average cost than the $17.64 level where it ended April 30, the day news of the firm’s position came out. Additionally, it is possible that Couchbase could get an offer closer to the 6-times revenue figure where some of its peers trade.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

President Donald Trump has ordered his Cabinet to find coal resources that can be used to power artificial intelligence data centers.
Miners argue that coal plants need to ramp up power generation to the meet the demand from data centers and maintain grid reliability.
The tech companies are unlikely to invest in new coal generation due to their climate commitments.

President Donald Trump wants to revive the struggling coal industry in the U.S. by deploying plants to power the data centers that the Big Tech companies are building to train artificial intelligence.
Trump issued an executive order in April that directed his Cabinet to find areas of the U.S. where coal-powered infrastructure is available to support AI data centers and determine whether the infrastructure can be expanded to meet the growing electricity demand from the nation’s tech sector.

Trump has repeatedly promoted coal as power source for data centers. The president told the World Economic Forum in January that he would approve power plants for AI through emergency declaration, calling on the tech companies to use coal as a backup power source.
“They can fuel it with anything they want, and they may have coal as a backup — good, clean coal,” the president said.
Trump’s push to deploy coal runs afoul of the tech companies’ environmental goals. In the short-term, the industry’s power needs may inadvertently be extending the life of existing coal plants.
Coal produces more carbon dioxide emissions per kilowatt hour of power than any other energy source in the U.S. with the exception of oil, according to the Energy Information Administration. The tech industry has invested billions of dollars to expand renewable energy and is increasingly turning to nuclear power as a way to meet its growing electricity demand while trying to reduce carbon dioxide emissions that fuel climate change.
For coal miners, Trump’s push is a potential lifeline. The industry has been in decline as coal plants are being retired in the U.S. About 16% of U.S. electricity generation came from burning coal in 2023, down from 51% in 2001, according to EIA data.

Peabody Energy CEO James Grech, who attended Trump’s executive order ceremony at the White House, said “coal plants can shoulder a heavier load of meeting U.S. generation demands, including multiple years of data center growth.” Peabody is one of the largest coal producers in the U.S.
Grech said coal plants should ramp up how much power they dispatch. The nation’s coal fleet is dispatching about 42% of its maximum capacity right now, compared to a historical average of 72%, the CEO told analysts on the company’s May 6 earnings call.
“We believe that all coal-powered generators need to defer U.S. coal plant retirements as the situation on the ground has clearly changed,” Grech said. “We believe generators should un-retire coal plants that have recently been mothballed.”

Tech sector reaction

There is a growing acknowledgment within the tech industry that fossil fuel generation will be needed to help meet the electricity demand from AI. But the focus is on natural gas, which emits less half the CO2 of coal per kilowatt hour of power, according the the EIA.
“To have the energy we need for the grid, it’s going to take an all of the above approach for a period of time,” Kevin Miller, Amazon’s vice president of global data centers, said during a panel discussion at conference of tech and oil and gas executives in Oklahoma City last month.
“We’re not surprised by the fact that we’re going to need to add some thermal generation to meet the needs in the short term,” Miller said.

Thermal generation is a code word for gas, said Nat Sahlstrom, chief energy officer at Tract, a Denver-based company that secures land, infrastructure and power resources for data centers. Sahlstrom previously led Amazon’s energy, water and sustainability teams.
Executives at Amazon, Nvidia and Anthropic would not commit to using coal, mostly dodging the question when asked during the panel at the Oklahoma City conference.
“It’s never a simple answer,” Amazon’s Miller said. “It is a combination of where’s the energy available, what are other alternatives.”
Nvidia is able to be agnostic about what type of power is used because of the position the chipmaker occupies on the AI value chain, said Josh Parker, the company’s senior director of corporate sustainability. “Thankfully, we leave most of those decisions up to our customers.”
Anthropic co-founder Jack Clark said there are a broader set of options available than just coal. “We would certainly consider it but I don’t know if I’d say it’s at the top of our list.”
Sahlstrom said Trump’s executive order seems like a “dog whistle” to coal mining constituents. There is a big difference between looking at existing infrastructure and “actually building new power plants that are cost competitive and are going to be existing 30 to 40 years from now,” the Tract executive said.
Coal is being displaced by renewables, natural gas and existing nuclear as coal plants face increasingly difficult economics, Sahlstrom said. “Coal has kind of found itself without a job,” he said.
“I do not see the hyperscale community going out and signing long term commitments for new coal plants,” the former Amazon executive said. (The tech companies ramping up AI are frequently referred to as “hyperscalers.”)
“I would be shocked if I saw something like that happen,” Sahlstrom said.

Coal retirements strain grid

But coal plant retirements are creating a real challenge for the grid as electricity demand is increasing due to data centers, re-industrialization and the broader electrification of the economy.
The largest grid in the nation, the PJM Interconnection, has forecast electricity demand could surge 40% by 2039. PJM warned in 2023 that 40 gigawatts of existing power generation, mostly coal, is at risk of retirement by 2030, which represents about 21% of PJM’s installed capacity.
Data centers will temporarily prolong coal demand as utilities scramble to maintain grid reliability, delaying their decarbonization goals, according to a Moody’s report from last October. Utilities have already postponed the retirement of coal plants totaling about 39 gigawatts of power, according to data from the National Mining Association.
“If we want to grow America’s electricity production meaningfully over the next five or ten years, we [have] got to stop closing coal plants,” Energy Secretary Chris Wright told CNBC’s “Money Movers” last month.
But natural gas and renewables are the future, Sahlstrom said. Some 60% of the power sector’s emissions reductions over the past 20 years are due to gas displacing coal, with the remainder coming from renewables, Sahlstrom said.
“That’s a pretty powerful combination, and it’s hard for me to see people going backwards by putting more coal into the mix, particularly if you’re a hyperscale customer who has net-zero carbon goals,” he said.

Catch up on the latest energy news from CNBC Pro: More

Student loan borrowers worried about the Trump administration’s decision to resume collection activity can take these steps to get current on their loans.
Getting your debt out of default can prevent the U.S. Department of Education from garnishing your wages and retirement benefits.

U.S. President Donald Trump talks to reporters aboard Air Force One, en route to Abu Dhabi, United Arab Emirates, on May 15, 2025.
Brian Snyder | Reuters

As the Trump administration ramps up its student loan collection efforts, worried borrowers need to ask themselves a key question: Am I delinquent, or in default? The answer determines your best next steps.
“We’ve had a lot of clients contacting us recently who are extremely stressed and, in some cases panicked, about their loan situation,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

More from Personal Finance:How many consumers are preparing for an economic hitWhy Americans think real estate, gold are the best long-term investmentsTrump tariffs sparked ‘uptick’ in I bond interest, advisor says. What to know
However, some borrowers wrongly believe they’ll be subject to wage garnishments or offsets of their retirement benefits — when in fact they are delinquent but not yet in default, Nierman said.
If you’re delinquent, there are things you can do to avoid default. And even those who are in default and at risk for collections can take steps to avoid such outcomes.
“The federal student loan system does provide several paths for bringing loans out of default,” she said.

Delinquent or in default? Here’s how to tell

Just because you’re behind on your payments doesn’t mean you’re in default.

Your student loan becomes past due, or delinquent, the first day after you miss a payment, according to the U.S. Department of Education.
Nearly 8% of total student debt was reported as 90 days past due in the first quarter of 2025, the New York Fed recently found.

Once you are delinquent for 90 days or more, your student loan servicer will report your past due status to the national credit bureaus, which can lead to a drop in your credit score.
The Federal Reserve predicted in March that some people with a student loan delinquency could see their scores fall by as much as 171 points. (Credit scores typically range from 300 to 850, with around 670 and higher considered good.)
Lower credit scores can lead to higher borrowing costs on consumer loans such as mortgages, car loans and credit cards.
But you’re not considered to be in default on your student loans until you haven’t made your scheduled payment in at least 270 days, the Education Department says.

Only borrowers in default face garnishments

The federal government has extraordinary collection powers on its student loans and it can seize borrowers’ tax refunds, paychecks and Social Security retirement and disability benefits.
But only those who’ve defaulted on their student loans can face these consequences, experts said.

How to get out of student loan delinquency

Delinquent student loan borrowers should call their student loan servicer right away and request a retroactive forbearance for missed payments and then a temporary forbearance until they enroll in a repayment plan they can afford, according to the experts at the Education Debt Consumer Assistance Program. Some monthly bills under income-driven repayment plans wind up being as low as zero dollars.
There are also economic hardship and unemployment deferments available for those who qualify, as well as other ways to keep your loan payments paused while not falling behind.

How to get out of student loan default

Meanwhile, more than 5.3 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers within a few months, the Education Department estimates.
You can contact the government’s Default Resolution Group and pursue a number of different avenues to get current on your loans, including enrolling in an income-driven repayment plan or signing up for loan rehabilitation. 

You can get out of default on your student loans through rehabilitating or consolidating your debt, Nierman said.
Rehabilitating involves making “nine voluntary, reasonable and affordable monthly payments,” according to the U.S. Department of Education. Those nine payments can be made over “a period of 10 consecutive months,” it said.
Consolidation, meanwhile, may be available to those who “make three consecutive, voluntary, on-time, full monthly payments.” At that point, they can essentially repackage their debt into a new loan.
After you’ve emerged from default, experts also recommend requesting a monthly bill you can afford.
If you don’t know who your loan servicer is, you can find out at Studentaid.gov.
“Explore your options and create a plan for returning your loans back to good standing so you will not be subject to punitive collections activity,” Nierman said. More

A college major in a subject like finance or computer science is often touted as the ticket to a well-paying position in good times and bad, and that is mostly true.
But when it comes to employment prospects, majors in nutrition, art history and philosophy all outperform some STEM-based counterparts, according to a recent analysis by the Federal Reserve Bank of New York.

AAron Ontiveroz/The Denver Post via Getty Images

College commencement is a time of optimism for newly minted graduates. But this year, there’s also more uncertainty about the economy and employment — and grads in some unexpected majors may find they have a leg up.
Majors in nutrition, art history and philosophy all outperformed STEM fields when it comes to employment prospects, according to a recent analysis of labor market outcomes of college graduates by major by the Federal Reserve Bank of New York.

For computer science and computer engineering, the unemployment rate in those fields was 6.1% and 7.5%, respectively — notably higher than the national average.
By comparison, the unemployment rate for art history majors was 3%, and for nutritional sciences, the unemployment rate was just 0.4%, the New York Fed found. The New York Fed’s report was based on Census data from 2023 and unemployment rates of recent college graduates.

Economics and finance majors also fared worse than those in theology and philosophy when it came to the employment rates for recent college graduates, according to the New York Fed. Philosophy majors have an unemployment rate of 3.2%, for example, and for finance, it’s 3.7%.

Employment prospects are shifting

In general, what you choose to major in has significant implications for your job prospects and future earnings potential.

Majoring in a STEM subjectis often touted as the ticket to a well-paying position in good times and bad, and that is mostly true.
In fact, students who pursue a major specifically in computer science or computer engineering — both STEM disciplines — are projected to earn the most right out of school with median wages of $80,000.
More from Personal Finance:College grads face a ‘tough and competitive’ job marketHow college savers can manage 529 plansIs college still worth it? It is for most, but not all
Even so, demand for humanities majors is on the rise, and with good reason.
At a conference last year, Robert Goldstein, the chief operating officer of BlackRock, the world’s biggest money manager, said the firm was adjusting its hiring strategy for recent grads. “We have more and more conviction that we need people who majored in history, in English, and things that have nothing to do with finance or technology,” Goldstein said.
This demand for liberal arts degrees is due in part to the rise of artificial intelligence, which drives the need for creative thinking and so-called soft skills. 

Opportunities in health care

Meanwhile, jobs in the health-care sector continue to be in high demand in 2025.
The U.S. economy added 902,000 health care and social assistance jobs last year and employment in health-care occupations is “projected to grow much faster than the average” for all U.S. jobs through 2033, according to the Bureau of Labor Statistics.
The unemployment rate among nursing majors is just 1.4%, the New York Fed also found.
“Nursing is extremely resilient in times of economic uncertainty, like we are seeing right now,” said Travis Moore, a registered nurse and health-care strategist at job site Indeed.

Although the median wage right out of school for nurses is lower than it is for economics and finance majors, heading into a possible economic downturn, job security may be a more important measure, he said.
“There’s a significant nursing shortage going on right now,” Moore said — and that “creates a really strong opportunity to get into a career with really low layoffs.”
Subscribe to CNBC on YouTube. More

House Republicans’ “one, big, beautiful” tax bill includes a new perk for older adults: a $4,000 deduction, framed as a “bonus.”
The deduction would be available to individuals ages 65 and over who meet certain income and other requirements.
The proposal provides some financial relief for seniors that was promised on the presidential campaign trail without the high costs of eliminating taxes on Social Security benefits, experts say.

The U.S. Capitol is seen on Capitol Hill in Washington, D.C., U.S., May 7, 2025.
Nathan Howard | Reuters

House Republicans’ “one, big, beautiful” tax bill includes a new temporary $4,000 deduction for older adults.
The change, called a “bonus” in the legislation, is aimed at helping retirees keep more money in their pockets and provides an alternative to the idea of eliminating taxes on Social Security benefits, which President Donald Trump and other lawmakers have touted.

The bill provides a “historic tax break” to seniors receiving Social Security, “fulfilling President Trump’s campaign promise to deliver much-needed tax relief to our seniors,” White House Assistant Press Secretary Elizabeth Huston said via email.
The proposal calls for an additional $4,000 deduction to be available to adults ages 65 and over, whether they take the standard deduction or itemize their returns. The temporary provision would apply to tax years 2025 through 2028. The deduction would start to phase out for single filers with more than $75,000 in modified adjusted gross income, and for married couples who file jointly with more than $150,000.
More from Personal Finance:House Republican bill calls for bigger child tax creditMedicaid work requirements kick hardworking people off health coverage: SenatorHouse Republicans advance Trump’s tax bill — but ‘SALT’ deduction still undecided
As a tax deduction, it would reduce the amount of seniors’ income that is subject to levies and therefore reduce the taxes they may owe. Notably, it is not as generous as a tax credit, which reduces income tax liability dollar for dollar.
A median income retiree who brings in up to about $50,000 annually may see their taxes cut by a little less than $500 per year with this change, noted Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

“It’s not nothing, but it’s also not life changing,” Gleckman said.

New deduction vs. eliminating taxes on benefits

The $4,000 senior “bonus” deduction would help lower-income people and would not help higher-income individuals who are above the phase outs, Gleckman said.
In contrast, the proposal to eliminate taxes on Social Security benefits would have been a “big windfall” for high-income taxpayers, he said.
“If you feel like you need to provide an extra benefit to retirees, this is clearly a better way to do it than the original Social Security proposal that Trump had,” Gleckman said.
Social Security benefits are taxed based on a unique tax rate applied to combined income — or the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.
Beneficiaries may have up to 85% of their benefits subject to taxes if they have more than $34,000 in combined income individually, or more than $44,000 if they are married and file jointly.
Up to 50% of their benefits may be taxed if their combined income is between $25,000 and $34,000 for individual taxpayers, or between $32,000 and $44,000 for married couples.

Beneficiaries with combined income below those thresholds may pay no tax on benefits. Therefore, a policy to eliminate taxes on benefits would not help them financially.
The proposed $4,000 tax deduction for seniors may help some retirees who are on the hook to pay taxes on their Social Security benefit income offset those levies, according to Garrett Watson, director of policy analysis at the Tax Foundation.
However, the impact of that change would vary by individual situation, he said. For some individuals who pay up to an 85% tax rate on their benefit income, “that $4,000 deduction can make a difference,” Watson said.

‘Bonus’ would be less costly to implement

The Senate is prohibited from including changes to Social Security, including the proposal to eliminate taxes on benefits, in reconciliation bills like the tax package now up for consideration.
Notably, the proposed $4,000 deduction for seniors would be less expensive.
If that change were made permanent, it would cost around $200 billion over 10 years, Watson said. In contrast, eliminating taxes on Social Security benefits would cost more than $1 trillion over a decade, he said.
“It’s actually probably less than 20% of the size of the tax cut that was initially pitched during the campaign,” Watson said.
Moreover, the cost for the $4,000 deduction would come out of general revenue for income tax, which means it would not directly take money from Social Security’s trust funds, which already face a funding shortfall. More

The median tax bill in the U.S. in 2024 was $3,500, up 2.8% from $3,349 in 2023, according to a new report by Realtor.com. 
If done successfully, savings after appealing a tax bill could amount to a median $539 a year, researchers found. 
“You’re banking on several years of savings,” said Pete Sepp, president of the National Taxpayers Union Foundation.

Milan2099 | E+ | Getty Images

Many homeowners have seen their property taxes increase in recent years because of rising housing prices and local tax rates. But the property tax assessment isn’t always set in stone: filing an appeal may lower the cost for years.
The median property tax bill in the U.S. in 2024 was $3,500, up 2.8% from $3,349 in 2023, according to an April report by Realtor.com. 

How much you pay varies widely depending on where you live, and some places have seen higher bills and bigger increases.
As of 2023, the median property tax for homeowners in New York City was $9,937, according to a new report by LendingTree. The city ranks first among the metropolitan areas with the highest median property taxes. Rounding out the top three are San Jose, California and San Francisco, where homeowners paid a median $9,554 and $8,156, respectively.
More from Personal Finance:Americans are struggling with rising food prices. How to saveStagflation is a looming economic risk. What it means for your moneyHouse GOP tax bill calls for ‘SALT’ deduction cap of $30,000 for most taxpayers
Over 40% of homeowners across the U.S. could potentially save $100 or more per year by protesting their assessment value, Realtor.com estimates, with median savings of $539 a year. 
“You’re banking on several years of savings,” said Pete Sepp, president of the National Taxpayers Union Foundation.

That’s because while some state or local governments mandate annual property tax reassessments, others set less frequent cycles with gaps of several years — and some have no set schedule at all. There are also some events that can trigger a reassessment, like a home sale or renovations.
Here’s what you need to know before you appeal a property tax increase, according to experts. 

‘You’re paying more than you should’

A tax assessment is the way officials determine the value of your property for tax purposes.
Your home’s market value, or what it would sell for, is a major component, but other factors can sway that result. It will ultimately depend on how property taxes are assessed in your area.
“It’s not a nationwide formula,” said Melissa Cohn, regional vice president of William Raveis Mortgage. 
However, it’s not uncommon for properties to be over-assessed, meaning you end up paying more in taxes than you should be, said Sepp. Sometimes it can be due to inaccuracies that were never corrected in your home’s assessment.
For example: Your assessment might have 2,500 square feet of livable space cited when it’s really 2,000 square feet, or note four full bathrooms when the home really has three full and one half-bath.

“Those kinds of things get embedded in your property assessment, and year after year, you’re paying more than you should,” Sepp said.
NTUF estimates 30% to 60% of taxable property in the U.S. is over-assessed, based on reports from individual state tax assessors.

How to appeal

Appealing your assessment is “not a terribly difficult investment of time for a residential property owner,” said Sepp. “The processes are reasonably easy and fair.”
Should you be successful, the change typically takes effect for the current tax year, and it becomes the basis for your next assessment, he said.
If you plan to appeal your taxes, your goal is to demonstrate how the assessor is incorrectly applying the assessment formula to your house, said Sal Cataldo, a real estate lawyer and partner at O’Doherty & Cataldo in Sayville, New York. 
“It’s challenging the numbers that they’re plugging into the formula for your particular house,” he said. 
Here’s how to get started: 

1. See if your current assessment is accurate

The first step is to look at the accuracy of your own assessment. You should receive the assessment if it’s in the cycle. You should also be able to find or request your records online through your county, city or district assessor.
Make sure the details about your house are correct, said Sepp, such as the square footage or the age of your roof. 
If you notice inaccuracies, start to gather paperwork as evidence. For example, if the roof appears to be relatively new in your assessment, but is in fact much older, look in your records for invoices from contractors from when it was previously repaired, or even the home inspection from when you bought the property.

2. Compare your property to your neighbors’ homes

Knowledge of other houses in your neighborhood or homes close to yours is important because it can help you appeal your tax bill, said Cataldo.  
As tax records are public, you can find out what your neighbors with similar homes are paying in taxes. If you’re paying more, that might be an indication that your taxes may be over-assessed, he said. 
You’ll also be able to see if they are paying less taxes because they qualify for tax exemptions, Cataldo said.

3. See if you qualify for tax exemptions

You might qualify for tax exemptions in your town, city, county or area, which can help reduce or even eliminate your property tax liability.
Some of the most common exemptions cover qualifying older residents, active military members, veterans, low-income households or disabled individuals, among others, Bankrate found.

4. Know your deadline

Make sure to meet your area’s recurring deadline to appeal your bill, Sepp said. Sometimes it will appear in fine print in the assessment. The time window to file your paperwork can span from 30 to 45 days ahead of that deadline, for example.

5. Seek expert guidance

Sometimes it might be worth tapping expert guidance or advice, such as a real estate agent who’s very knowledgeable about your area, or an appraiser. They can help you compare home values to yours. Before you hire someone, research to understand what their services entail and what they charge. More