Investing

The Greencore logo is seen on the outside of its factory building in Bristol, England.
Matt Cardy | Getty Images

Company: Greencore Group (GNC-GB)

Business: Greencore Group is an Ireland-based manufacturer of convenience foods. Its segments include Convenience Foods UK and Ireland. Greencore supplies a range of chilled, frozen and ambient foods to retail and food service customers in the United Kingdom. The company supplies all of the supermarkets in the United Kingdom. It also supplies convenience and travel retail outlets, discounters, coffee shops, foodservice and other retailers. It has over 16 manufacturing and 18 distribution centers in the United Kingdom.
Stock Market Value: 531.2 million pounds (about 1.14 pounds per share)

Activist: Oasis Management

Percentage Ownership:  n/a
Average Cost: n/a
Activist Commentary: Oasis Management is a global hedge fund management firm headquartered in Hong Kong with additional offices in Tokyo, Austin and the Cayman Islands. Oasis was founded in 2002 by Seth Fischer, who leads the firm as its chief investment officer. Oasis is an authentic international activist investor, doing activism primarily in Asia (and occasionally Europe). The firm has an impressive track record of prolific and successful international activism. Oasis has as many arrows in its quiver as any activist and has been successful in getting seats on boards, opposing strategic transactions, advocating for strategic actions, improving corporate governance, and holding management accountable.

What’s happening

On March 15, the Financial Times reported that Oasis Management has been building a stake in Greencore, approaching the UK’s 5% threshold, and that managing director Daniel Wosner has met with the board and management several times.

Behind the scenes

Greencore Group is a leading supplier of prepackaged and convenience foods in the UK and Ireland, serving customers including supermarkets, convenience stores, retail outlets, coffee shops and other retailers. The company reports segmental information in two categories: “food to go” and “other convenience.” In 2023, “food to go” accounted for 65% of the group’s revenue and “other convenience” generated the remaining 35%. A key inflection point in recent history for Greencore was the Covid-19 pandemic. Since then, the company has struggled to regain its footing and recover both its stock price and operating performance. The stock has fallen sharply since its pre-pandemic peak. In addition, the company’s adjusted operating profit of 76.3 million pounds and adjusted earnings before interest, taxes, depreciation and amortization of 132.8 million pounds have not caught up to its pre-pandemic levels of 105 million pounds and 142 million pounds, respectively. In addition, operating margins fell to 2% in 2020 and 2021, down from 6% to 7% in the years leading up to the pandemic. They have failed to recover completely, resting at 4% in 2023.

Compared to its peers, many of whom were similarly set back by the forces of the pandemic, inflation and a recessionary macro environment in the UK and Ireland, Greencore has particularly struggled to return to its former performance. First, Greencore has not reinstated its dividend since suspending it in 2020. Greencore’s peers currently offer dividend yields between 1% and 7%, averaging approximately a 3.5% yield. Some of them had also suspended payments following the outbreak of Covid-19, but resumed them shortly thereafter. In addition, Greencore’s operating and EBITDA margins are lower than those of its peers Premier Foods and Bakkavor, but it had better margins in both categories in 2019.
Oasis is known as an Asian activist, which is true – 90% of its activist campaigns have been in Asia. But the firm has selectively pursued activism in Europe two other times prior to this. Both times its returns have been incredible – averaging 108.75% versus 5.29% for the MSCI EAFE Index. Moreover, both of those investments were in similar businesses to Greencore: One was a direct peer, Premier Foods, and the other was The Restaurant Group. At The Restaurant Group, Oasis successfully agitated for the removal of the company’s chairman, as well as asset sales to accelerate medium-term strategic plans to increase adjusted EBITDA, and the company was eventually taken private by Apollo. The Premier Foods campaign was a three-act play. In 2017, after the firm accumulated an 8.3% stake, Premier invited Daniel Wosner, managing director of Oasis, to join the board of directors, but he submitted his resignation after just one year. In its second act, Oasis immediately began agitating for change, urging shareholders to vote against the re-election of then-CEO Gavin Darby, citing shareholder value destruction, poor financial performance, consistent missed targets, a lack of strategy and weak corporate governance. While Darby was re-elected in 2018, shortly thereafter he announced his resignation. In the firm’s third act, Wosner was invited back to join the board in February 2019, and the company announced that it would launch a strategic review.
Since Wosner’s reappointment, Premier and Greencore appear as a rising star and a falling comet, respectively. Premier Foods has generated a total return of nearly 300%, while Greencore is down 41.5% in that time. Premier has resumed its dividend, while Greencore has suspended it. Premier has EBITDA margins of approximately 20% versus mid- to high-single digits for Greencore.
It is hard to believe there is another investor more qualified to create shareholder value at Greencore than Oasis. The situation at Greencore appears amicable, and the company would probably be served well to offer Wosner an opportunity to join the board. Oasis could help put the company in a financial position where it can resume dividend payments or accelerate buybacks. In addition, at The Restaurant Group and Premier, Oasis pushed for the sale of non-core assets, which is consistent with streamlining operations and creating shareholder value. It’s not necessarily Oasis’ plan to push for the ouster of executives here, especially since Greencore’s CEO Dalton Philips was recently appointed in 2022 and CFO Catherine Gubbins was appointed to her role in 2023. But certainly, there need to be changes, and this should put management on notice. One Greencore director who Oasis knows well is Alastair Murray, the former CFO and once-interim CEO of Premier Foods. Indeed, Oasis had played a part in elevating Murray to replace former Premier CEO Gavin Darby in 2019.
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

The Biden administration has cleared the student loans of nearly 4 million people, totaling $143.6 billion in aid.
How to know if you qualify for relief, too.

Female firefighter putting on her protective equipment inside the fire station in response to an emergency
Trevor Williams | Digitalvision | Getty Images

The Biden administration’s latest student loan forgiveness announcement contained good news for more people than the 77,700 borrowers eligible for this round of aid.
Starting next week, the administration said, President Joe Biden will send an email to nearly 380,000 additional borrowers confirming that they are “on track” for loan cancellation within two years as long as they continue to meet the requirements of the Public Service Loan Forgiveness program.

“I’ve heard from countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold,” Biden’s email says, in a draft reviewed by CNBC.
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The Supreme Court last June struck down the president’s plan to deliver student loan forgiveness to as many as 40 million Americans. Since then, his administration has tried to cancel the debt in various other ways, using its existing authority. It has mainly done so by overhauling existing loan relief programs that historically were hard to access.
As a result, since Biden was elected, his administration has so far cleared the education debts of nearly 4 million people, totaling $143.6 billion in relief.
Those who haven’t qualified for that aid are likely wondering, “When will my turn come?”

While Biden’s emails may answer that question for some, here are other ways borrowers can figure out if, and when, they may be eligible for debt cancellation.
“These forgiveness opportunities are fantastic, but they are complicated,” said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing.

‘Over 100′ student loan forgiveness programs

If you’re not enrolled in a program that leads to student loan forgiveness, you can find “great information” on the U.S. Department of Education’s website, Studentaid.gov, about the different opportunities, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
Mayotte said students should “read all the things. They can also contact their loan servicer to talk about their potential eligibility and steps they may have to take to qualify.”
Two of the most popular debt cancellation avenues are the Public Service Loan Forgiveness program, which leads to a debt jubilee after a decade of payments for qualifying workers, and the income-driven repayment plans. Those plans, which cap a borrowers’ monthly bill at a share of their discretionary income, lead to debt erasure after 10 to 25 years of payments. There are currently four different plans, each with different rules.
Much of the relief the Biden administration has delivered so far has been through fixes to these two programs.

But there are also “over 100 other forgiveness programs out there to explore,” Mayotte said.
“Many are offered by states looking to encourage certain types of employment, such as health care and public defenders,” she said.
Mayotte’s website, FreeStudentLoanAdvice.org, has a database of these programs, she said.
Meanwhile, after the Supreme Court blocked Biden’s sweeping student loan forgiveness plan, his administration began working on a revised relief plan. The administration could roll out that “Plan B” program before November, and as many as 10 million people could benefit, according to one estimate.

Track qualifying payments, required steps

The loan forgiveness programs can be confusing and many borrowers have run into walls trying to access the relief to which they’re entitled. Given those difficulties, once you know the student loan forgiveness plan you’re pursuing, experts recommend keeping a record of the requirements you’ve met along the way.
For example, borrowers in the Public Service Loan Forgiveness program are required to make 120 qualifying payments. They should be able to get a history of their payments at StudentAid.gov by looking into their loan details, Mayotte said. They can also ask their servicer for a complete history.

There have also been many policy updates of late for borrowers, almost all of which are positive.
“The changes implemented under the Biden administration will get borrowers closer to forgiveness,” Rubin said. “Especially borrowers who have been in repayment for some time.”
The Education Department has been reviewing the accounts of borrowers in income-driven repayment plans, and in some cases giving people credit on their forgiveness timeline for periods that didn’t qualify previously. For example, some past deferments or forbearances may now count.
If a borrower has multiple loans, meanwhile, they can apply for consolidation — which combines federal student loans into one new loan — and get credit going back as far as their first loan payment on the oldest of their original loans in that bundle. The deadline for consolidating and getting credit under the income-driven repayment plan recount is April 30.
If a borrower believes there is an issue with their payment count, they can talk to their loan servicer or submit a complaint with the Department of Education’s Federal Student Aid unit, Rubin said.

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House Republicans have released a new proposal to raise the Social Security retirement age.
Democrats have called for requiring the wealthy to pay more taxes so benefits can be enhanced.
Here’s what current and future beneficiaries need to know about those proposals.

South_agency | E+ | Getty Images

House Republicans unveiled a plan this week that calls for raising the Social Security retirement age. Meanwhile, Democrats and advocates for the program are ramping up their calls to tax the rich to enhance benefits.
“On the right, there is a line in the sand against tax increases,” said Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center.

“And on the left, there’s this idea that we’re going to address this problem and not touch benefits,” he said.
Both Social Security and Medicare face looming insolvency dates, while the number of seniors who rely on those programs is projected to grow.
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The trust funds that Social Security relies on to pay benefits may run out in the next decade. For retirees, that may amount to a 23% benefit cut. For the average dual-income couple, that would result in a $17,400 benefit cut, the Committee for a Responsible Federal Budget has estimated.
Medicare’s hospital insurance trust fund, which covers Medicare Part A, may face insolvency in 2031.

Meanwhile, the Congressional Budget Office is now projecting public debt will grow to 166% of gross domestic product by 2054, up from about 97% as of fiscal year 2023.

This week, the Republican Study Committee, a large group of conservative House Republicans, released a 2025 budget proposal including significant reforms for Social Security and Medicare.
President Joe Biden, in his own recent budget proposal, also outlined broad changes he hopes can be made to those programs.
Changes that are enacted to Social Security and Medicare will have to be bipartisan.
“Any kind of durable policy with a realistic chance of getting through Congress is going to have to include aspects from both of these budgets,” Sprick said.

Republican budget calls for raising retirement age

The Republican Study Committee budget calls for “Making Social Security Solvent Again.”
The reforms would be gradually phased in and “affect no senior in or near retirement,” according to the plan. Ultimately, the goal for the changes is to make Social Security’s retirement trust fund “sustainably solvent.”
Republicans’ budget proposal calls for “modest adjustments” to the retirement age to reflect longer life expectancies, though it did not specify how high the age could go up. Social Security’s full retirement age — when beneficiaries may receive 100% of the benefits they’ve earned — is currently 67 for people born in 1960 or later.
The plan also calls for reducing full retirement age benefits for high-income earners, while also limiting and phasing out “auxiliary benefits” for those beneficiaries’ spouses and dependents. The budget did not specify the income thresholds to which those changes would apply.
“There is a lot of willingness and openness on the Republican side of the aisle to reduce Social Security benefits for high earners,” Sprick said.
The Republican budget proposal would restructure Medicare so beneficiaries receive premium support subsidies, which they may use to pay for either through federal traditional Medicare or private Medicare Advantage plans. The amount of the subsidies would be based on a benchmark that would be chosen after testing several options, according to the plan.

Biden’s proposal opposes benefit cuts

Biden’s budget outlines the ways in which the president wants to address the looming funding shortages both Social Security and Medicare currently face.
“No benefit cuts,” the budget states regarding Social Security. Efforts to privatize the program are also off the table.
To help shore up Social Security’s shortfall, Biden’s budget calls for the “highest-income Americans to pay their fair share.”
“Under my plan nobody earning less than $400,000 will pay an additional penny in federal taxes,” Biden said during his State of the Union address earlier this month.

The president’s budget proposal also calls for improving Social Security and Supplemental Security Income benefits for retirees and individuals with disabilities who “face the greatest challenges making ends meet.”
Biden’s budget also aims to shore up Medicare in keeping with changes he has previously proposed. That includes raising the Medicare tax rate on both earned and unearned income from 3.8% to 5% for those earning more than $400,000.

Parties trade jabs on proposals

Biden’s plan stops short of specifying how he would restore Social Security’s solvency with the proposed combination of tax increases and benefit enhancements. That has prompted House Republicans in their budget proposal to state, “President Biden’s plan would cut benefits by 23% in 2033” in reference to the program’s current projected depletion date.
“We could extend the life of Medicare’s Trust Fund permanently — without cutting benefits — if Congressional Republicans would get on board with the President’s historic budget proposal to raise taxes on the wealthy,” White House spokesperson Robyn Patterson said in a statement. “The President’s Budget also clearly states his principles for strengthening Social Security.”
Democrats, on the other hand, have complained the Republican budget proposal would result in $1.5 trillion in benefit cuts, including raising the retirement age.
“Because they know these cuts are unpopular with the American people, the [Republican Study Committee] does not reveal how many years they would raise the age nor how they would ‘phase out’ other benefits,” Rep. John Larson, D-Conn., ranking member of the House Ways and Means Social Security Subcommittee, said in a statement. More

Women and Wealth Events
Your Money

Establishing a routine is necessary for successful investing and building wealth.
When I think about my clients who have managed to reach financial independence, I’d say they have very defined patterns that help them save and track their finances.
Here’s how to develop habits that will help you achieve financial success.

Fatcamera | E+ | Getty Images

We’ve all been told that following a routine is important in many aspects of life — for physical fitness, good eating habits, solid work patterns and so on. But many experts are telling us that establishing a routine is also necessary for successful investing and building wealth.
At an early age, my mom drilled into me that it wasn’t how much I earned, but how much I saved. I’ll add that it’s not just how much we save, but how and when we save — ideally, without overthinking it.

When I think about my clients who have managed to reach financial independence, I’d say they also have very defined patterns that help them save and track their finances. 

More from CNBC’s Advisor Council

Let’s take a look at what some prominent people have said on the subject and then I’ll share my tips on how you can apply their observations to upping your own personal finance game.

To change a habit, ‘understand its structure’

The advice: In his best-selling book, “The Power of Habit,” Charles Duhigg found people who stick to a daily routine are more likely to make smarter financial decisions.
“Habits are at first cobwebs, then cables,” Duhigg wrote, referring to his observation that building wealth through investing takes time and consistency to develop good habits and see results. 
Another quote, “The key to changing a habit is to understand its structure — to identify the cue, the routine, and the reward — and then alter them,” is Duhigg’s way of noting that it’s important to understand your own spending and saving habits. That helps you identify what triggers you to spend money, establish a routine for saving a certain amount of money from each paycheck and reward yourself for achieving your savings goals. 

“The brain can be reprogrammed. You just have to be deliberate about it,” Duhigg wrote. This can be applied to investing by recognizing that you can change your financial habits and mindset with deliberate effort. By educating yourself about investing, setting specific goals and staying disciplined, you can reprogram your brain to prioritize saving and investing for your future.
My take: Data from Pew Research supports this. Pew found that individuals who establish consistent saving routines are more likely to build wealth over time than those who don’t. The report says that “households benefit from automatic mechanisms to generate savings. Such programs have shown promise for other types of savings and could, with appropriate alteration, offer a valuable platform for building and rebuilding emergency savings.”
Putting your savings and investing on automatic is a small change that may significantly affect your net worth over the long term. Instead of waiting to save, set up automatic savings to your important “goal” accounts. Have money transferred regularly to your emergency fund, your retirement savings, kids’ college savings, paying off credit cards and even for your next dream vacation. 

‘Automatic’ behaviors carry us along

The advice: Wendy Wood, a professor of psychology and business at the University of Southern California, is the author of “Good Habits, Bad Habits: The Science of Making Positive Changes That Stick.” Wood says that habits give us the freedom to focus on other things while our “automatic” behaviors carry us along. 
By establishing routines that support our financial goals, we can free up mental energy to focus on other aspects of our lives. This can be especially important when it comes to investing, which can be complex and stressful. “Small changes to the environment can lead to big changes in behavior,” Wood wrote. Wood also said that “the more we repeat a behavior, the less effort it takes to do it.” The more you invest, the easier it becomes. 

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

My take: If you typically invest in individual stocks, consider diversifying your portfolio by also adding mutual funds or exchange-traded funds that track a broad market index. By making this a regular habit, you’ll also become more comfortable with the movement of the stock market, diversifying your portfolio and the process of investing and rebalancing. This, in turn, will require less effort over time and reduce investing fears.

Daily actions outweigh ‘once in a while’ moves

The advice: In podcaster Gretchen Rubin’s best-selling book, “Better than Before: What I Learned About Making and Breaking Habits,” she explores the science of habit formation and gives advice for making positive changes. 
“What you do every day matters more than what you do once in a while,” she wrote. That can be applied to investing by consistently contributing to your investment accounts, even if it’s just a small amount each month. 
Another Rubin quote, “Happiness is not a destination, it’s a way of life,” can be applied to investing by recognizing that building wealth is not just about achieving a certain financial goal, but about creating a more secure financial future for yourself and your loved ones.
My take: Establish routines that support financial goals. Make a choice that you’re going to get serious about saving by committing to establishing good habits — including forming and following a budget, making saving from each paycheck a priority, adding to your investments regularly and paying off credit card debt. 
Set specific financial goals and stick to them and automate as many things as you can, including savings and recurring bills such as insurance and mortgage payments. Meet at least once a year with your financial advisor so you can be sure to stay on track.

5 ways to build habits that improve your finances
You can develop the habits that will help you achieve financial success by consistently following these steps:

Identify the cues, routines, and rewards that drive your financial behavior.
Make small adjustments to your investment strategy.
Set specific goals.
Contribute regularly to your accounts.
Recognize that wealth-building is a long-term process.

— By Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is a member of the CNBC Financial Advisor Council. More

Prices are beginning to come down from peak highs for both new and used cars, but we might never go back to pre-pandemic norms, experts say.
“The bad news is we’re never going back to the old normal. The good news is within new normal range we have been coming off of peaks,” said Pat Ryan, the founder and chief executive officer of CoPilot, a car-shopping app.

Maskot | Maskot | Getty Images

After a year of supply shortages and climbing borrowing costs, 2024 is shaping up to be a better time to buy a car.
The average transaction price for a new car in the U.S. in February was $47,244, down 2.2% from February 2023. That’s also down 5.4% from the market peak in December 2022, according to Kelley Blue Book.

But new cars are still generally expensive; prices are nearly 14% higher than in February 2021.
Incentives such as rebates and discounts are slowly making a comeback as inventory grows for most automakers, but prices might never go back to pre-pandemic levels, experts predict.
“The bad news is we’re never going back to the old normal. The good news is within new normal range we have been coming off of peaks,” said Pat Ryan, the founder and chief executive officer of CoPilot, a car-shopping app.
“We have this structural move now in both new and used car prices that are making consumers’ eyes pop out,” he said.

Why new cars have gotten pricier

The underlying components built into new cars, such as technology, as well as high labor costs, are keeping prices high, Ryan said.

“A fender bender is no longer a small thing,” he said. “If you hit somebody with your fender in your new car today, instead of being $300 with plastic that you have to replace, it might be $2,000 or $3,000 because you have … all these anti-collision and electronics.”
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That’s why it’s hard to come by a new model below $20,000 in the auto market. It’s also a response to consumers preferring cars with features such as automatic climate control, a touch screen and parking sensors, Joseph Yoon, a consumer insights analyst at car website Edmunds, previously told CNBC.
Because of these advances, Ryan said, new car prices are “never going to go back down to where they were.”

Used car shortage ‘puts a floor’ on depreciation

The average transaction price for used cars in the fourth quarter of 2023 dipped to $28,371, a 4.4% decline from $29,690 a year prior, according to Edmunds data.
“Depreciation didn’t exist” in the last few years for used cars due to high demand, Yoon explained.
Used car prices are likely to stay “structurally higher” because fewer new cars were produced during the pandemic due to shutdowns and chip shortages. That means more drivers held on to their previous cars, making fewer used cars available on the market, Ryan said.
“That shortage of used cars puts a floor on how much the used cars can depreciate because … there’s no used car factory, you can’t build more used cars,” he said.

However, newer used cars, or those up to three years old, are depreciating, because they are directly correlated with the recovered inventory of the new car market, Yoon said.
“A three-year-old car is marginally similar to newer cars,” he said.
Cars between five and seven years old are still holding onto pandemic-era values because of low supply, he said. As there are fewer older cars available, the high demand keeps prices elevated.
While prices remain generally high, drivers who need to switch up their wheels may have a better chance this year, experts say.

When to buy a car in 2024

Incentives between April and July are forecast to be the most attractive in the new car market, Ryan said.
Car shopping often takes place in the spring and summer.
“To go on a test drive, you’re going to be outdoors to look at a car … it’s kind of an outdoorsy activity,” said Brian Moody, executive editor for Kelley Blue Book.
While interest rates are still high, the Federal Reserve is expected to cut rates this year, which may “give people a little more breathing room,” Ivan Drury, Edmunds’ director of insights, previously told CNBC.
“Last year was ugly all around. At least there’s an upside this year,” he said.
Manufacturers are also ramping up incentives on some new cars. Since deals are not a “blanket across all brands or even all cars within one brand,” shoppers will have to hunt for those offers, Moody said.
Drivers can get deals on used cars under three years old, Yoon said, and car dealers are more likely “to be a bit generous during holidays.”
“In general, whether new or used, dealers often offer incentives over big holidays like Presidents [Day] weekend,” he said.
The average transaction price for a one-year-old car dropped to $38,720, a $6,763 decline from its peak of $45,483 in the third quarter of 2022, which is a “meaningful shift,” he said.

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The IRS issued more than 43 million refunds, worth about $135.3 billion, as of March 8.
The average refund was $3,145, up from $2,972 during the same week last year.
You can check the status of your refund via the “Where’s My Refund?” online tool.

Urbazon | E+ | Getty Images

Why many taxpayers wait to file

Typically, taxpayers file sooner when they’re expecting a refund, said Mark Baran, managing director at financial firm CBIZ Marks Paneth.

Indeed, knowing “they won’t get a refund” is one of the top five reasons Americans procrastinate on taxes, according to a January survey from IPX1031, an investment property exchange service.
Plus, many taxpayers file for an extension, which bumps the federal filing deadline by six months, to Oct. 15 this year. This provides more time to file, but federal taxes owed are typically still due on April 15. Some taxpayers have an automatic federal extension due to natural disasters.

“A lot of high-net-worth clients will file extensions” because they’re still waiting for tax forms such as Schedule K-1 for so-called pass-through business income, Baran said.
“The [latest IRS] data doesn’t reflect the returns that are ultimately filed by October,” he added.
As of Dec. 23, the average refund for 2023 was $3,167, which was slightly lower than the $3,252 average in 2022, the IRS reported.

Why more taxpayers are relying on a refund

Some 40% of taxpayers are relying on a refund this season, up from 36% last year, according to a LendingTree survey published in March.
“The most simple explanation is inflation,” said Jacob Channel, LendingTree’s senior economist.
While inflation is down significantly from its 9.1% peak in 2022, it remains above the Federal Reserve’s 2% target, he said.
The consumer price index, which tracks the cost of consumer goods and services over time, rose 3.2% in February compared with one year ago, the Bureau of Labor Statistics reported in March.

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Amid ongoing FAFSA issues, criticism of the U.S. Department of Education has reached a fever pitch.
Former top student loan official Wayne Johnson accused the Education Department of “malicious negligence” in a letter written to U.S. Secretary of Education Miguel Cardona and other senior officials and shared with CNBC.

As problems with the new Free Application for Federal Student Aid persist into the spring, harsh words are being directed at the U.S. Department of Education.
Former top student loan official Wayne Johnson accused the Education Department of “malicious negligence” in a recent letter written to U.S. Secretary of Education Miguel Cardona and other senior officials and shared with CNBC.

“Continuing to whitewash this evolving calamity with ‘corporate style crises management PR’ is extraordinarily irresponsible,” wrote Johnson, who served as the chief operating officer of the Office of Federal Student Aid from 2017 until 2019 and is now running for Congress.
“Each of you is personally and collectively responsible for what is manifesting to be a level of incredible harm inflicted upon students and schools,” Johnson wrote.
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Johnson had a “brief” tenure as COO of FSA, a department spokesperson told CNBC of his correspondence, “during which time none of the changes he now talks about were successfully implemented.”
“We will also note that the FAFSA Simplification Act requires not just a new form but a complete overhaul of the formula and process for delivering financial aid to students,” the department spokesman added.

A separate group of Republican lawmakers also has requested a federal inquiry into the rollout and whether students were given sufficient information on the new process.
To be sure, the overhaul was a “major” undertaking imposed by Congress without additional funding or resources, a senior Education Department official said on a January press call. “Our ‘North Star’ here is trying to make sure that students get the help they need for college.”

‘Any further delays would be disastrous’

The FAFSA serves as the gateway to all federal aid money, including loans, work study and grants, the latter of which are the most desirable kinds of assistance because they typically do not need to be repaid.
However, this year, fewer students are applying for financial aid, data shows, as the U.S. Department of Education works to resolve ongoing technical issues with the new form, including preventing contributors without a Social Security number from starting or accessing the application.
“This adds to the growing list of can’t-miss priorities that the Department must deliver in the month of March, a timeline students and institutions desperately need the Department to meet,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “Any further delays would be disastrous for both students and schools.”

They’ve been accepted into schools and they don’t know if they can afford it — that’s a problem.

Lydia McNeiley
college and career coordinator in Hammond, Indiana

Award letters are typically sent around the same time as admission letters so students have several weeks to compare offers ahead of National College Decision Day on May 1, which is the deadline many schools set for admitted students to decide on a college.

Especially ‘scary’ for those depending on aid

For most students and their families, which college they will choose hinges on the amount of financial aid offered and the breakdown between grants, scholarships, work-study opportunities and student loans.
“They’ve been accepted into schools and they don’t know if they can afford it — that’s a problem,” said Lydia McNeiley, a college and career coordinator for the public school district in Hammond, Indiana. “It’s not fair across the board, but for those that are depending on that financial aid letter, this is scary.”
In Hammond, most high school seniors are first-generation college applicants who would qualify for aid but have hit obstacles with the 2024–25 form, McNeiley said.
“The message that they are getting is that they have to prove that they deserve to be on those campuses,” she said. “It’s really a slap in the face.”

Because of the extensive delays, many colleges are now relying on their own calculations to determine student aid packages, which could open the door to issuing financial aid award offers that schools may not be able to honor or “cause tens of billions of dollars in improper payments,” Johnson wrote.
“Moreover, it is highly probable that FAFSA related systems failures will continue to further disenfranchise large populations of students into 2025-2026,” Johnson added in his letter, underscoring how important the awarding of federal student financial aid is to driving college enrollment.
Johnson equated the potential impending enrollment decline to the one experienced at the height of the Covid-19 pandemic, when college attendance notched the largest two-year drop in 50 years.

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The Biden administration announced it would forgive $5.8 billion in student debt for 77,700 borrowers through the Public Service Loan Forgiveness program.
It also said President Joe Biden would email another 380,000 public service workers, notifying them that they’re on track to have their debt canceled within two years.

U.S. President Joe Biden announces a preliminary agreement with Intel for a major CHIPS and Science Act award, during a visit to the Intel Ocotillo Campus, in Chandler, Arizona, U.S., March 20, 2024. 
Kevin Lamarque | Reuters

The Biden administration announced Thursday it would forgive $5.8 billion in student debt for 77,700 borrowers through the Public Service Loan Forgiveness program.
It also said President Joe Biden would email another 380,000 public service workers starting next week, notifying them that they’re on track to have their debt canceled within two years.

The U.S. Department of Education has routinely announced waves of loan forgiveness, as the Biden administration seeks to use its existing authority to leave people with less debt after the Supreme Court struck down its sweeping $400 billion loan forgiveness plan last June. The Biden administration has so far cleared the education debts of nearly 4 million people, totaling $143.6 billion in relief.
“For too long, our nation’s teachers, nurses, social workers, firefighters, and other public servants faced logistical troubles and trap doors when they tried to access the debt relief they were entitled to under the law,” U.S. Secretary of Education Miguel Cardona said in a statement about the latest round of forgiveness.
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The PSLF program, signed into law by President George W. Bush in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. In 2013, the Consumer Financial Protection Bureau estimated that one-quarter of American workers may be eligible.
However, the program had long been plagued by problems, making people who actually received the relief a rarity. Borrowers complained about confusing rules and misinformation from their servicers.

The Biden administration has worked to fix those issues.
Before Biden’s fixes to PSLF, just around 7,000 borrowers had received debt relief through the over 15-year-old program, according to the administration. Since 2021, it said, 871,000 borrowers have now had their debt canceled under the program.

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