Investing

The Biden administration announced on Thursday what it described as its final round of student loan forgiveness, clearing over $600 million in the debt for thousands of borrowers.
The relief will go to 4,550 borrowers entitled to debt cancellation through the Income-Based Repayment plan as well as 4,100 former students of DeVry University.

US President Joe Biden speaks during an event in Madison, Wisconsin, US, on Monday, April 8, 2024. 
Daniel Steinle | Bloomberg | Getty Images

In 2023, the Supreme Court blocked Biden’s plan to deliver wide-scale student loan forgiveness for tens of millions of borrowers.
But the Biden administration still managed to wipe away a large share of the country’s outstanding student debt by improving the Education Department’s existing debt relief programs.
“Four years ago, President Biden made a promise to fix a broken student loan system,” said U.S. Secretary of Education Miguel Cardona in a statement.
“We rolled up our sleeves and, together, we fixed existing programs that had failed to deliver the relief they promised, took bold action on behalf of borrowers who had been cheated by their institutions, and brought financial breathing room to hardworking Americans.”

Borrower IDR repayment counts adjusted

The U.S. Department of Education also announced on Thursday that it had completed its payment count adjustment for the many borrowers enrolled in income-driven repayment plans. IDR plans lead to loan forgiveness after a certain period, typically 20 or 25 years.
However, consumer advocates and borrowers had long complained that loan servicers were not properly keeping track of borrowers’ timeline to that relief. The Biden administration worked to fix this.
Borrowers should now be able to see an accurate payment count by logging into their accounts on Studentaid.gov, the Education Department said. More

If you’ve been affected by the California wildfires, you may qualify for immediate federal help.
“People impacted by these fires are going to receive a one-time payment of $770,” President Joe Biden said at a White House briefing this week.
Here’s what to know about accessing those payments or other federal aid.

Burned cars and homes destroyed by the Eaton Fire are pictured in Altadena, California, on Jan. 9, 2025.
Zoe Meyers | AFP | Getty Images

How to know if you qualify

To qualify for serious needs assistance, you need to complete a FEMA application, either by visiting DisasterAssistance.gov or calling 1-800-621-3362.
Other criteria include:

FEMA must also be able to confirm your identity.
You, or someone in your home, must be a U.S. citizen, non-citizen national or a qualified non-citizen.
You must live most of the year in the area affected by wildfires.
FEMA must confirm you have suffered disaster damage either through a home inspection or documentation.
Your application must indicate you have been displaced, need shelter or have other emergency costs.
You must apply while serious needs assistance is available.

To be sure, everyone who applies does not necessarily receive the same size payment.
 “Your unique situation determines the amount of assistance you may receive,” FEMA states on its website.

Other federal aid available

Victims of the wildfires may also qualify for other federal aid.
Another FEMA program, displacement assistance, may help cover costs for up to two weeks of housing needs if your home is uninhabitable following a disaster. That money may be used to cover costs to stay in a hotel, with friends and family or elsewhere.

Additionally, federal disaster assistance may also help cover temporary housing, grants for home repairs and essential household items, unemployment payments, low-interest loans for residential losses not covered by insurance and crisis counseling.
Disaster victims should be wary of potential scams promoting access to cash payments from FEMA, the agency warns. More

The Tax Cuts and Jobs Act of 2017, or TCJA, temporarily increased the maximum child tax credit to $2,000 from $1,000.
Without action from Congress, the higher benefit could expire after 2025.
There’s bipartisan support for the tax break, but it’s difficult to predict future legislation amid trillions in competing priorities.

Rep. Jason Smith, R-Mo., speaks during a House Oversight and Accountability Committee impeachment inquiry hearing into U.S. President Joe Biden on Sept. 28, 2023.
Jonathan Ernst | Reuters

As Congress wrestles over President-elect Donald Trump’s agenda, several key tax provisions are in limbo, including the child tax credit claimed by millions of families.  
Enacted by Trump, the Tax Cuts and Jobs Act of 2017, or TCJA, temporarily increased the maximum child tax credit to $2,000 from $1,000 per child under 17 and widened eligibility with higher-income phaseouts. But the higher benefit will revert after 2025 without action from Congress, which could impact returns filed in 2027.

“The last thing families need is to see Washington slashing their child tax credit in half,” House Ways and Means Committee Chairman Jason Smith, R-Mo., said Tuesday during a committee hearing, which repeatedly addressed the expiring tax break.
More from Personal Finance:Here’s the inflation breakdown for December 2024 — in one chart30 million people could qualify to use IRS free Direct File programHealth care jobs are in demand in 2025 — one of the top roles can pay $385,000
In addition to a higher maximum benefit, TCJA capped the refundable portion of the child tax credit, which reduces the benefit for lower-income families without taxes due. 
“The child tax credit is upside down because it gives more benefits to higher-income people than lower-income people,” Chuck Marr, vice president for federal tax policy at the Center on Budget and Policy Priorities, previously told CNBC.
An estimated 17 million children under the age of 17 with lower-income parents won’t receive the full value of the child tax credit in 2025, according to a Tax Policy Center analysis released in December. 

Despite concerns over the federal budget deficit, there’s been recent support from Democrats and Republicans to extend the expiring child tax credit.
House lawmakers in January 2024 passed a bipartisan tax package, including a child tax credit expansion. The change aimed to increase access and retroactively boost the refundable portion for 2023 and could have triggered refund checks.
While Senate Republicans in August blocked legislation due to concerns about the policy, they expressed interest in future negotiations.  
But with trillions in competing priorities and a growing budget deficit, it’s unclear if lawmakers will extend the boosted child tax credit and whether the future design could change. 
The three-month fiscal year 2025 deficit ballooned to $710.9 billion in December, nearly 40% above than the same period the previous year, the U.S. Department of the Treasury reported on Tuesday.

Don’t miss these insights from CNBC PRO More

Select retail investors will be able to earn royalties as users of trading platform Dub duplicate their portfolios.
It’s part of a new creator program launched by the investing app.

Manusapon Kasosod | Moment | Getty Images

Dub, a platform that allows retail traders to mimic the investments of notable people in business and government, debuted a service Thursday that pays select everyday investors to share their portfolios.
Retail traders accepted into Dub’s so-called top creator program will be paid royalties for users to access their model portfolio. The creator program marks the latest push from Dub to sway mom-and-pop investors to its platform, which encourages users to forgo traditional stock picking and instead duplicate other traders’ portfolios.

“Fundamentally, we are rethinking the distribution of how capital flows to investing talent,” said Steven Wang, Dub’s founder and chief executive. “We are really at the very early innings of another retail investing revolution.”
Since its launch nearly a year ago, Dub has offered users the opportunity to track and copy the investment portfolios of people ranging from Federal Reserve Chair Jerome Powell and Rep. Nancy Pelosi, D-Calif., to billionaire hedge fund manager Bill Ackman. Users, who pay $9.99 a month or $89.99 a year, can essentially make replicas of these portfolios using their own money held in Dub’s broker dealer.
These portfolios are tracked for changes over time, with any trades automatically mirrored to others who copied them. In other words, Wang said traders can go on “auto pilot” once holding a copy of someone’s portfolio and eliminate the human error of missing any trades.
Previously, users could opt to make their portfolios available for copy by others if they met a personal investment minimum of $1,000. Now, the creator program adds a financial incentive for accepted users.
The program’s name can draw comparisons to influencer payment structures from social media platforms such as TikTok. Accepted traders get paid a scaling fee that takes into consideration several social metrics. The rate isn’t based entirely on the number of portfolio copies per creator, but that figure may be a factor.

The amount of royalties received is determined individually between Dub and each creator in the program, Wang said.
Multiple traders were already signed onto the program at the time of launch, according to Dub. Their roster includes Andrew Ver Planck, an alumnus of MacKay Shields and Putnam Investments, and Lawrence Fuller, a SeekingAlpha analyst.
Dub has a $100 minimum deposit, though some portfolios require larger investments to make a copy. The company’s broker dealer is registered with the Securities and Exchange Commission.

The ‘next generation’ of investing influencers

Dub’s program comes amid a booming period for both retail trading and the influencer economy.
Data shows that net inflows from average Joe traders to popular stocks and funds remain elevated compared with pre-pandemic levels. That’s despite the boom-and-bust cycle of day trading and meme stocks that captured America’s interest during the Covid pandemic.
At the same time, the pandemic lockdowns catalyzed a surge of interest around people with large followings on online platforms. That’s bolstered the sub-economy tied to digital creators, which Goldman Sachs estimated can swell to a $480 billion revenue opportunity by 2027. Goldman reported in 2023 that around 50 million people work as content creators around the globe.
Dub’s app has been downloaded more than 700,000 times, according to Wang. The company expects to reach 1 million before the end of the first quarter.
Looking ahead, Wang said he hopes to see the best individual traders gain followings and fortunes through the creator program and Dub’s platform. One of the benefits of Dub, he said, is the ability to see verified returns of each portfolio that can be copied before a user chooses to throw their own money behind it.
“I want the next five Warren Buffetts to be surfaced and famous on Dub,” he said. “If we’re really successful with the top creator program, the next generation of the best fund managers, the best traders in the world that people follow will rise from Dub.” More

The IRS plans to send automatic payments of up to $1,400 to 1 million taxpayers this month.
Here’s how to tell if you’re eligible and answers to other top questions.

sturti | E+ | Getty Images

As tax filing season starts, 1 million taxpayers are already set to receive automatic payments from the IRS.
That has many people asking, “Will I receive an IRS stimulus check in 2025?” “IRS automatic stimulus payments” is a breakout search, with rising queries related to eligibility, Google Trends data from Wednesday shows.

Those sums are not this year’s tax refund. Instead, the payments of up to $1,400 per individual represent Recovery Rebate Credits that were not claimed by eligible people on their 2021 tax returns.
“Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” IRS Commissioner Danny Werfel said in a December statement when the automatic payments were announced.
“To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it,” Werfel said.

Who is now eligible for a $1,400 payment?

The IRS plans to issue about $2.4 billion in automatic payments to eligible individuals who did not claim the Recovery Rebate Credit on their 2021 tax returns.
The maximum payment is $1,400 per individual, or $2,800 per married couple.

A family of four — including a married couple and two qualifying dependents claimed on their tax returns — may receive up to $5,600.
However, the payment amounts may vary, according to the IRS.
The full credit amount is available to individual taxpayers with up to $75,000 in adjusted gross income and to married couples who file jointly with up to $150,000 for 2021. The credit begins to phase out for income above those thresholds and is reduced to zero for individuals with $80,000 or more in adjusted gross income and married couples with $160,000 or more.

What do I need to do to receive an automatic payment?

If you’re eligible to receive a payment, you do not need to do anything, according to the IRS.
The payments should arrive by late January and will be direct deposited to the bank account listed on your 2023 tax return or sent by paper check to the address the IRS has on record.
Eligible taxpayers will also receive a separate letter notifying them the payment has been made.

How can I claim the money if I don’t receive a check?

Did the stimulus checks cause inflation?

Millions of Americans looked forward to the stimulus checks in the wake of the sudden Covid-19 shutdown that may have cut off their usual sources of income.
Yet following those 2020 and 2021 payments — as well as enhanced unemployment and direct child tax credit checks — inflation spiked to levels not seen in decades.
That has led some to wonder whether those stimulus efforts contributed to the inflation spike.
In a recent CNBC interview, Treasury Secretary Janet Yellen said the “spending was necessary” to help avoid the suffering of people losing their livelihoods and businesses.
“It may have contributed a little bit to the inflation,” Yellen said. “But by and large, the inflation was a supply-side phenomenon.”

The goods people wanted from China and other parts of the world faced huge supply chain problems, which pushed up prices, she said.
On Wednesday, new government inflation data showed core inflation — excluding food and energy prices — slowed in December, which helped prompt a stock market rally. Even with that progress, the Federal Reserve still has work to do to reach its 2% inflation target. More

The average end-of-year bonus rose about 2% in 2024, according to an exclusive look at data from human resource provider Gusto.
In a tight labor market, employers often use bonuses as a tool to keep their top performers engaged.
But workers increasingly value other perks as well, separate studies show, particularly when it comes to flexible hours and work-life balance.

After a prolonged period of job gains and wage increases, employers capped off the year by giving their employees bigger year-end bonuses, a new report found.
The average bonus awarded in December was $2,503, on average, up from $2,447 in 2023 — an increase of just over 2%, according to an exclusive look at data from human resource provider Gusto, based on more than 400,000 small- to medium-sized businesses nationwide.

“The average represents about one paycheck. That turns into a pretty significant amount of money especially at the end of the year,” said Gusto’s senior economist, Nich Tremper.
More from Personal Finance:Here’s the inflation breakdown for December Health-care jobs are in demand in 2025How much — if any — bitcoin should you own?
“This is an economy that ended 2024 much better than expected and small businesses are taking advantage of that — that includes wages and compensation for the current employees,” Tremper said.

Sectors that saw bigger, or smaller, bonuses

But bonuses also varied by industry, Gusto found: The average end-of-year bonus increased significantly among several white-collar industries, including communications, technology and professional services.  
Adam Beasley, owner of Adam Up Accounting firm in Payson, Utah, said he determines bonuses for his staff based on the prior year’s profitability. “We were up another 8% in 2024, so the bonus was bigger.”

Beasley, who does accounting work for other small business owners, said he feels even more optimistic about 2025. “I take care of a lot of blue-collar companies — plumbers, electricians, guys putting in infrastructure — and a lot of them are doing well because there’s still a lot of work to get done.”
Meanwhile, many service industry workers saw smaller end-of-year bonuses in 2024 compared with the end of 2023, Gusto found. Sectors such as transportation and warehousing faced reduced demand, leading to significant declines in year-end bonuses for workers in these trades, according to Tremper.

Overall, the jobs market remained remarkably strong throughout 2024, other reports show. Employment grew each month and, as of the latest reading, the unemployment rate edged down to 4.1% in December. Average hourly earnings also increased 0.3% last month.
In a tight labor market, some employers use bonuses as a tool to keep their top performers engaged, with fewer companies paying out bonuses to the entire staff, Tremper said. The share of workers receiving a bonus declined in 2024 by almost 2% compared with 2023.

Money is key, but so is work-life balance

“The key thing is that companies need to remain competitive,” said Michelle Reisdorf, district president at Robert Half, a recruitment and staffing firm. “Bonuses are that extra perk that employees look for when deciding whether to stay in a job or look for a new job.”
According to Robert Half’s survey of more than 1,600 hiring managers in November, 62% of managers said bonuses were higher in 2024 compared with the year before and 28% offered bonuses in line with 2023. Only about 5% of managers said bonuses were smaller than they were previously.
For workers, “money always ranks near the top in perks,” Reisdorf said. However, priorities have also shifted, largely since the pandemic. These days, employees are more likely to consider work-life balance, flexible hours and mental health support as equally important.
To that end, workers increasingly value flexible or hybrid work schedules, extra paid days off, additional options for health insurance or more robust retirement saving plans, Reisdorf said: “The key one is flexibility.”
Subscribe to CNBC on YouTube. More

The Federal Reserve is expected to hold rates steady at its Jan. 28-29 meeting with a few more rate cuts over the course of the year.
As a result, most types of consumer loans will be moderately cheaper by the end of 2025, Bankrate chief financial analyst Greg McBride said.
From mortgage rates and credit cards to auto loans and savings accounts, here are his predictions for where rates are headed.

Interest rates moved lower near the end of 2024 as the Federal Reserve cut rates three times, shaving a full percentage point off the federal funds rate since September. In 2025, that trend is likely to continue.
But with inflation still above the Fed’s 2% target, a strong labor market and a new administration, the central bank already indicated that it would move more slowly on rate cuts in the year ahead.

Federal Reserve officials reduced their outlook for expected cuts in 2025 to two from four, assuming quarter-point increments, according to minutes from their December meeting.
“Robust U.S. economic data heightened concerns that the Federal Reserve may see little scope for cutting rates in 2025,” Solita Marcelli, chief investment officer Americas for UBS Global Wealth Management, wrote in a research note.
More from Personal Finance:30 million people may qualify for IRS free Direct File programBiden forgives student loans for 150,000 more borrowersHow much you can save by not drinking during ‘dry January’
Experts anticipate the Fed will hold steady on interest rates at its Jan. 28-29 meeting, and follow with only a few rate cuts through the year. Given that, most Americans can expect to see their financing expenses ease, but not by much, said Greg McBride, chief financial analyst at Bankrate.
“Rates were abnormally low for the better part of 15 years, and they’ve been abnormally high for the last two,” he said. “They’re coming down, but where they’ll settle out is going to be a level that’s higher than what we had seen before 2022.”

Although Fed officials indicated two cuts, McBride expects as many as three coming over the course of the year, bringing the key benchmark rate to 3.5%-3.75%. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates consumers see every day.
From mortgage rates and credit cards to auto loans and savings accounts, here are his predictions for where rates are headed in the year ahead:
Prediction: Credit card rates fall to 19.8%

A customer moves through the check out lane with his groceries at a Costco Wholesale store on April 3, 2024 in Colchester, Vermont.
Robert Nickelsberg | Getty Images

Since the central bank started cutting interest rates, the average credit card interest rate has only edged off extremely high levels. 
Going forward, annual percentage rates aren’t likely to improve much more. McBride predicts that the average APR on a credit card will fall to 19.8% by the end of 2025, down about half a percentage point from where it stands now. 
Cardholders usually see the impact within a billing cycle or two. But for those carrying a balance from month to month, “borrowers need to press on with debt-repayment efforts,” McBride said. Rates “won’t be coming down quickly enough to provide meaningful relief.”
Prediction: Mortgage rates to hit 6.5%
“Mortgage rates have gone up — not down — since the Fed began cutting interest rates in September,” McBride said.
McBride now expects mortgage rates to “spend most of the year in the 6% range,” he said, “with a short-lived spike above 7%.”
The 30-year fixed-rate mortgage could end the year at 6.5%, he projected. But since most people have fixed-rate mortgages, their rate won’t change unless they refinance or sell their current home and buy another property. 

Prediction: Auto loan rates edge down to 7%
When it comes to their cars, consumers have been facing bigger monthly payments, thanks to higher vehicle prices and elevated interest rates on new loans.
While anyone planning to finance a new car could benefit from lower rates to come, affordability concerns won’t change significantly.
Five-year new car loan rates are expected to fall to 7% from 7.53%, while four-year used car financing costs could drop to 7.75% from 8.21% by the end of the year, according to McBride.
Prediction: High-yield savings rates dip below 4%
In recent years, top-yielding online savings accounts have offered the best returns in over a decade and still pay nearly 5%, according to McBride.
Even though those rates are falling, “they’re coming down slowly, and they’re still well above inflation,” McBride said.
McBride predicts that top-yielding savings accounts and money market accounts could hit 3.8% by the end of 2025, while the top-yielding one-year and five-year CDs will fall to 3.7% and 3.95%, respectively.
“That adds up to a pretty attractive environment for savers,” McBride said.
Subscribe to CNBC on YouTube. More

The Biden administration announced that it would forgive $4.5 billion in student debt for 261,000 borrowers who attended the now-defunct Ashford University.
Borrowers who qualify for the relief are those who studied at the for-profit, largely online institution between March 1, 2009, and April 30, 2020.
The California Department of Education successfully sued the institution, which it accused of deceiving students by making false promises and providing false information, including about costs and career outcomes, to get them to enroll.

Headquarters of Ashford University in San Diego, a for-profit university belonging to Bridgepoint Education.
Frank Duenzl | Picture-Alliance | DPA | AP

The Biden administration announced Wednesday that it would forgive $4.5 billion in student debt for 261,000 borrowers who attended the now-defunct Ashford University.
Borrowers who qualify for the relief are those who studied at the for-profit, largely online institution between March 1, 2009, and April 30, 2020.

The California Department of Justice requested the loan cancellation for federal student loan borrowers based on evidence it gathered during its successful lawsuit against Ashford University and its parent company, Zovio, Inc., the Education Department said.
California accused the university of deceiving students by making false promises and providing false information, including about costs and career outcomes, to get them to enroll.
The California Department of Justice secured a more than $20 million penalty against Zovio and Ashford in 2022, the Education Department said.
The recruiters at Ashford University misled students, telling them they would be able to work as teachers, social workers, nurses, or drug and alcohol counselors, the Education Department said. In reality, the university didn’t have the necessary state approval or accreditation for students to enter these professions, “meaning students wasted years of their lives and incurred tens of thousands of dollars of debt for degrees they could not use,” the department wrote in its press release.
Students were also lied to by Ashford staff about the cost of attendance, how much debt they’d accumulate and how long it would take to complete certain degrees, the agency added.

More from Personal Finance:30 million people could qualify to use IRS free Direct File programBiden forgives student loans for another 150,000 borrowersHow much you can save by not drinking during ‘dry January’
“Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University,” said U.S. Under Secretary of Education James Kvaal in a statement.
“In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes,” he wrote.
The University of Arizona acquired Ashford University in 2020. Zovio approved a plan to go out of business in late 2022, according to HigherEd Dive.
“The department notes that this decision was based on evidence presented in a lawsuit brought by the California Department of Justice against Ashford and its parent company, Zovio Inc.,” University of Arizona spokesman Mieczyslaw J. “Mitch” Zak said. “UAGC was not a party to, and did not participate in, the California lawsuit, and it had no relationship with Ashford or Zovio during this time period.”
Since Biden took office, he has forgiven debt for more than 5 million federal student loan borrowers, totaling $183.6 billion in relief. More