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The Biden administration is moving to create a new way for borrowers to repay their federal student loans.
Some bills could be cut in half under the program.

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What is the new plan called?

The new option would change one of the four current income-driven repayment plans that limit borrowers’ bills at a share of their discretionary income.
Instead of paying 10% of their discretionary income a month on the Revised Pay As You Earn Repayment, or REPAYE, Plan, borrowers would be required to pay just 5% toward their undergraduate student loans.

Currently, after 20 years of payments on undergraduate student loans, any leftover debt is forgiven on the existing REPAYE Plan. The revised option preserves that timeline.
However, under the Biden administration’s proposal, those with original student loan balances of $12,000 or less may get their loans forgiven after just 10 years.

How would payments change?

Under the current REPAYE Plan, discretionary income is calculated as money earned over 150% of the federal poverty guideline. As a result, single borrowers begin to make payments based on income over roughly $21,900, based on 2023 guidelines, said higher education expert Mark Kantrowitz.
Under the new plan, borrowers wouldn’t need to make payments based on income earned until it hit 225% of the federal poverty guideline, or about $32,800, Kantrowitz said.
He provided an example of how monthly bills could change with the overhauled option.

Previously, a borrower who made $40,000 a year would have a monthly student loan payment of around $151. Under the revised plan, their payment would drop to $30.
Someone who earned $90,000 a year, meanwhile, could see their monthly payments shrink to $238 from $568, Kantrowitz calculated.
And those who earn under around $32,800 will have $0 monthly payments.

Who qualifies?

The new option should be available to borrowers with undergraduate and graduate student loans, although undergraduate borrowers will have lower payments. Those with Parent Plus loans won’t be eligible to enroll in the overhauled plan.
Defaulted loans are typically ineligible for income-driven repayment plans. Yet under the new proposal, those who have fallen behind may be able to sign up for the Income-Based Repayment, or IBR, Plan, another one of the income-driven repayment plan options.

When could the plan be available?

The new REPAYE Plan could officially be available July 1, 2024, according to Kantrowitz. But some parts of the plan could be implemented sooner, he said.

How can I sign up?

Once the new REPAYE Plan is available, borrowers can call their student loan servicer to enroll in the option, or apply at StudentAid.gov.
“Any new plan will likely take quite some time to implement, so borrowers will have plenty of time to learn about how it might work,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.

Is the forgiven debt taxable?

It’s unclear whether debt forgiven at the end of the repayment timelines will be taxable at the federal level.
Debt forgiveness used to trigger a tax bill under income-driven repayment plans. But a recent law ended that policy until at least 2025, and experts believe it could become permanent.
It’s also possible that some states will consider the forgiven debt taxable.

What’s going on with the payment plan pause?

The Covid pandemic-era relief policy suspending federal student loan bills and the accrual of interest has been in effect since March 2020. 
For now, the Education Department is leaving things a little open-ended when it comes to the timing of payments resuming.
It has said the bills will be due again only 60 days after the litigation over its student loan forgiveness plan resolves and it’s able to start wiping out the debt.
If the Biden administration is still defending its policy in the courts by the end of June, or if it’s unable to move forward with forgiving student debt by then, the payments will pick up at the end of August, it has said.
The Supreme Court will start hearing arguments on legal challenges to the plan Feb. 28.

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Charlie Munger, a shareholder and board member for The Daily Journal, is set to speak at the newspaper’s virtual annual meeting Wednesday.
Munger stepped down from his chairman title at the Los Angeles-based Daily Journal last year. The 99-year-old investor also donated $1 million of stock to create an equity-incentive plan at the company at the time.

Daily Journal’s annual meetings typically feature hours of Q&A with Munger, drawing attention from investors and admirers around the globe. The famed investor could touch on a wide range of topics, from market volatility, the Federal Reserve’s rate hikes, to cryptocurrencies and investing in China.
Munger is also the vice chairman of Berkshire Hathaway and a longtime business partner of Warren Buffett. He recently penned an op-ed in the Wall Street Journal, urging the U.S. to follow in China’s footsteps and ban cryptocurrencies.
The event, moderated by CNBC’s Becky Quick, is slated to begin streaming exclusively on CNBC at 1 p.m. ET.

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Daniel Swan started as an apprentice and now works full time as an HVAC technician in California.
Apprenticeship programs are becoming more popular as an alternative to college.
Over a decade, the number of registered apprentices rose 64%, according to the latest data from the U.S. Department of Labor. 

Daniel Swan, 26, started as an apprentice and now works full time as an HVAC technician in California.
Courtesy: Lee’s Air

For Daniel Swan, a 26-year-old father of two, it was simply a means to a well-paying job during an uncertain time.
Armed with a technical degree, Swan joined an apprenticeship program with Lee’s Air in Fresno, California, in 2019. His family fully supported the decision to forgo college. “It was more ‘be successful at whatever you do,’” Swan said of his parents’ attitude at the time.

Now, he works as a skilled technician in heating, ventilation and air conditioning, or HVAC. Although Swan still hopes to get a degree in architecture one day, “I’m in a good place,” he said.
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Increasingly, young adults are rethinking the value of college.  
Amid the heightened demand for workers, rising cost of tuition and growing student loan burden, more would-be students are choosing career-connected pathways over four-year colleges, according to recent reports.
As enrollment falls, alternatives such as apprenticeship programs are quietly gaining steam, particularly for families anticipating the sticker shock of a college education, which currently averages around $53,430, including tuition, fees and room and board, at private colleges and $40,550 at public colleges for the 2022-23 school year, according to the College Board.

‘We are a societal turning point’

“We are a societal turning point,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. “People at the margin are saying ‘I don’t know if I can wait four years to make a living.’”
Some experts say the value of a bachelor’s degree is fading and more emphasis should be directed toward career training. A growing number of companies, including many in tech, are also dropping degree requirements for many middle-skill and even higher-skill roles.
However, earning a degree is almost always worthwhile, according to “The College Payoff,” a report from the Georgetown University Center on Education and the Workforce.

Companies that have these programs have a huge advantage because we can create the labor.

Tom Howard
owner of Lee’s Air

Bachelor’s degree holders generally earn 84% more than those with just a high school diploma, the report said — and the higher the level of educational attainment, the larger the payoff.

Apprenticeships are on the rise

In an apprenticeship program, a company generally trains a student in one skill for a specific field. That often leads to a job, sidestepping the traditional college path — and costs.
Over a decade, the number of registered apprentices rose 64%, according to the latest data from the U.S. Department of Labor. 
For Tom Howard, the owner of Lee’s Air, the program was meant to address a growing labor shortage. “The reality is, as air conditioning and plumbing companies, we are desperate for labor,” Howard said. “It’s a massive problem.”

Lee’s Air covers the cost of training and supplies and matches apprentices with full-time jobs at the company. Once workers complete the program, “we have a pretty high retention rate,” he said.
Now apprenticeships are becoming more mainstream across the industry, Howard added. “Companies that have these programs have a huge advantage because we can create the labor.”
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Indian markets have been volatile as the Adani crisis continues to dominate headlines, but analysts say this could be a buying opportunity.
Investors looking to buy into India’s real estate can consider playing the country’s infrastructure sector through domestic cement names, Garre said. 
However, Praveen Jagwani of UTI International Singapore said investors should choose cement names carefully, and recommends pharmaceutical stocks to watch as well.

The Indian government announced during the annual budget on Feb. 1 that the country will increase infrastructure spending by 33% to 10 trillion rupees ($122.29 billion) in the next fiscal year.
Bloomberg | Bloomberg | Getty Images

Indian markets have been volatile as the Adani crisis continues to dominate headlines, but analysts say this could be a buying opportunity.
In particular, some are bullish about the construction sector and say an infrastructure push could benefit cement stocks.

In a January note, Bernstein analysts led by Venugopal Garre, said they were “generally optimistic about the real estate cycle and the potential for a better rural environment.”
Investors can consider playing the country’s infrastructure sector through domestic cement names, Garre said. 

Cement: UltraTech, Ambuja

Bernstein likes UltraTech Cement — a company Garre said has the capacity to keep up with the growing number of real estate projects coming up in India. 
He said “70% of cement demand comes from real estate, and 30% comes from infrastructure,” and added that when a new property is built, cement is needed from the first day the project cycle commences. 
This is unlike electric equipment or circuitry that is only needed in the third or fourth year of the construction project, he explained. 

Sanjiv Bhasin, director at IIFL Securities, also said UltraTech Cement is one of the firm’s “top picks,” along with Ambuja Cements.
Shares of UltraTech Cement was trading at about 7,123.05 on Wednesday, lower by 0.21%. The stock is close to its 52-week intraday high, according to FactSet.
The government’s spending on infrastructure is increasing and “we think cement prices are headed higher because we [are going] into a season where construction activity may be at the highest,” Bhasin said. 
FactSet data showed shares of Ambuja Cements have fallen 34% year-to-date. Bhasin has said the stock is a buy and that it’s a “brilliant opportunity” despite the current market volatility.
The Adani Group owns a 63.15% stake in Ambuja Cements, Refinitiv showed.
The price for Ambuja Cements is falling “because it exists within the Adani umbrella,” said Praveen Jagwani, chief executive officer at UTI International Singapore.
“This temporary fiasco is only a buying opportunity … We still think that UltraTech and Ambuja are very, very good plays on the cement side,” Bhasin said, adding than an impetus on infrastructure spending will cause these names to outperform in the next quarter.

India’s infrastructure push

Morgan Stanley is bullish on India’s industrials sector, its analysts said in a note on Feb. 1 after the budget announcement.”As the Budget supports capex and employment creation, we remain constructive on the domestic demand strength,” the financial services firm said.
Finance Minister Nirmala Sitharaman announced during the annual budget last week that the country will increase infrastructure spending by 33% to 10 trillion rupees ($122.29 billion) in the next fiscal year. India’s fiscal year starts in April and ends in March the next year.
India’s construction materials industry should see some upside from the rise in capital expenditure, but investors have to be “very careful” when picking cement stocks, Jagwani told CNBC.
India needs more high quality commercial buildings, roads and airports, but the country’s infrastructure sector is also “super unpredictable and risky,” Jagwani warned.
Return on investment would fall each year as infrastructure projects get delayed, Jagwani pointed out, claiming that it happens frequently in India. 

Engineering: ABB India, Siemens India and more

Engineering companies that focus on infrastructure and construction are also good buys, IIFL Securities said.
They include ABB India, Siemens India, and Larsen & Turbo.
Larsen & Turbo will be coming out with “higher double digit margins, and their order flows are the strongest,” Bhasin said. 

UTI International also likes Berger Paints, which Jagwani said has the “ingredients” to see a continuous growth in sales and will benefit not just from new buildings being built, but older ones that need maintenance. 
“Paint is in the replacement market. People need to get their houses and apartments painted every few years because of rain and excessive heat,” he said. 
The shares, however, are down 4.5% year-to-date and close to their 52-week intraday low of 527.6 rupees. Berger Paints was trading at about 555.45 rupees on Wednesday. 
— CNBC’s Michael Bloom contributed to this report. 

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GOP lawmakers filed briefs at the Supreme Court, asking the justices to block Biden’s historic student loan forgiveness plan.
More than half of House Republicans, or 128 legislators, and 40 GOP senators, among them Minority Leader Mitch McConnell, oppose the debt relief policy.
The Biden administration insists that it’s acting within the law.

U.S. Senate Minority Leader Mitch McConnell of Kentucky at the U.S. Capitol Building on Feb. 13, 2023.
Anna Moneymaker | Getty Images News | Getty Images

Dozens of Republican members of Congress have filed briefs with the U.S. Supreme Court, arguing that the Biden administration’s student loan forgiveness plan should be ruled unlawful.
“Congress authorized the forgiveness of federal student loan debt only in specific, narrow circumstances,” argued the brief filed by more than 40 GOP senators, among them Minority Leader Mitch McConnell. “This is not one of them.”

The Republican senators wrote that the plan threatens “to deprive the Nation of nearly half a trillion dollars, and offend the separation of powers enshrined in the Constitution.”
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More than half of House Republicans, or 128 legislators, also filed a brief with the country’s highest court, making a similar argument. They say that “petitioners’ assertion of power to forgive everyfederal student loan in the country, potentially even a decade after the Covid-19 pandemic ends, raises significant separation of powers concerns.”
The briefs were filed this month as the high court prepares to hear oral arguments, scheduled for Feb. 28, on the student loan forgiveness plan.
In response to a request for comment, a Biden administration official said that “the only thing notable about this brief is that, if these Republican lawmakers get their way, millions of their own constituents will be denied debt relief.”

Opposition to relief is ‘almost entirely Republican’

Looking at the briefs filed with the Supreme Court so far over President Joe Biden’s plan to cancel up to $20,000 in student debt for tens of millions of Americans, it’s clear that this is a highly partisan issue, said higher education expert Mark Kantrowitz.
“The opposition to the president’s plan is almost entirely Republican,” Kantrowitz said.
GOP-led states and conservative groups have brought at least six lawsuits against the sweeping policy, and the court has agreed to hear two of them. For now, the legal troubles have stopped the Biden administration from starting to cancel any student debt, though it had planned to start doing so within months of its August announcement.

The White House has insisted that it’s acting within the law, pointing out that the Heroes Act of 2003 grants the U.S. education secretary the authority to make changes to the federal student loan system during national emergencies. The nation has been operating under an emergency declaration since March 2020 because of the Covid pandemic.
The law is a product of the 9/11 terrorist attacks more than two decades ago, and an earlier version of it had provided relief to federal student loan borrowers who’d been affected by those events.
The Republican senators, in their brief, counter that that law “permits only modest measures to prevent certain individuals from losing ground on their loans due to hardships induced by a war or national emergency.”

However, the Biden administration argues the pandemic financially set back federal student loan borrowers, many of whom were struggling even before the public health crisis began.
Only about half of borrowers were in repayment in 2019, according to an estimate by Kantrowitz. A quarter — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief measures, such as deferments or forbearances, for struggling borrowers.
These grim figures led to comparisons to the 2008 mortgage crisis. 

U.S. Department of Education Undersecretary James Kvaal said in a recent court filing that if the government isn’t allowed to provide debt relief for federal student loan borrowers, there could be a “historically large increase in the amount of federal student loan delinquency and defaults as a result of the Covid-19 pandemic.”

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High inflation persisted in January, with the consumer price index rising 6.4% from a year ago.
Here’s which prices have notably jumped year over year, based on government data released Tuesday.

A man walks past a grocery store on February 01, 2023 in New York City. Wages for workers in most major U.S. cities grew at a slower pace in the final three months of 2022, with inflation still outstripping pay for many workers.
Leonardo Munoz | Corbis News | Getty Images

High inflation has followed the U.S. economy into 2023, as consumers continued to see high prices in January.
Inflation rose 0.5% for the month and 6.4% over the past 12 months, according to consumer price index data released by the U.S. Bureau of Labor Statistics on Tuesday. Both results were higher than some economists’ expectations, which had predicted 0.4% for the month and 6.2% year over year.

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“It’s clear that the Federal Reserve has more to do in order to continue to slow down inflation,” said Eugenio Aleman, chief economist at Raymond James.
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The CPI measures the average change in consumer prices based on a broad basket of goods and services.
Notable increases included shelter, food, gasoline and natural gas, according to the BLS.
Categories that increased in January include motor vehicle insurance, recreation, apparel, and household furnishings and operations. Other areas that saw a monthly decline in prices include used cars and trucks, medical care, and airline fares.

Inflation recovery ‘will not be a straight line’

After two years of inflation, the process of getting those high prices under control will continue this year, though it will take time, according to Aleman.
The annual inflation rate should subside by midyear, Aleman predicts. But there then could be upward momentum followed by downward momentum, he said.
“It will not be a straight line during the rest of the year,” Aleman said.
Consumers will be poised to benefit going forward as inflation comes down, he said.

“It is true that inflation is not going to be back to pre-pandemic levels, but it is going to be much better than what it has been over the last three years,” Aleman said.
Sticky prices that stay high are to be expected, according to Peter C. Earle, an economist at the American Institute for Economic Research.
“In the same way that prices don’t rise at the same rate, they don’t fall at the same rate,” Earle said.
The CPI data released on Tuesday shows that so-called disinflation, where the pace of inflation temporarily cools, has happened more slowly, Earle said. In some cases, it has stopped and reversed for retail consumers and households, he said.

Consumers still struggle with budget pressures

For many households trying to stretch paychecks from one payday to the next, there has not been much relief to date, noted Greg McBride, chief financial analyst at Bankrate.com.
“The troubling thing about the pervasiveness of inflation is the fact that it’s hitting hardest in categories that are necessities,” McBride said.
Household budget staples continue to be leading contributors to inflation, according to McBride. That includes food, shelter, electricity, natural gas, apparel, vehicle insurance, and household furnishings and operations.

That last category includes paper products, an example of items all households buy, McBride said.
While other areas like used car prices have come down, that does not help unless you are in the market for such a vehicle, he noted.
That leaves many individuals and families still struggling under budget pressures.
“There’s not a whole lot of places to hide from it,” McBride said.

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A layoff can be one of the most disruptive events in a person’s life, setting off a host of financial and existential questions.
Fortunately, the unemployment insurance program, established in 1935, helps many workers who’ve lost their job at least replace a share of their former paychecks in relatively short order.

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The start of 2023 has seen a number of large companies announce deep cuts to their head counts, including Amazon, Dell, Google, Microsoft, PayPal and Zoom.
Being laid off can be one of the most disruptive events in a person’s life, setting off a host of financial and existential questions.

Fortunately, the unemployment insurance program, established in 1935, helps many workers who’ve lost their jobs at least replace a share of their former paychecks in relatively short order.
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“Individuals who rely on wages for income should apply soon after becoming unemployed,” said Doug Holmes, an unemployment insurance expert.
Here’s what newly unemployed workers need to know about the benefits.

Am I eligible?

Generally, to qualify for unemployment benefits, you have to have been laid off through no fault of your own, said Michele Evermore, a senior fellow at The Century Foundation. Maybe your company was downsizing, for example.

But it doesn’t hurt to apply even if you’re unsure if you qualify, Evermore said. Many people prematurely exclude themselves from the program.
“There’s a lot of mythology around who qualifies,” she said.

People may be surprised to learn, for example, that in some cases they can qualify for unemployment benefits even if they quit, Evermore said.
For instance, in some states you’re eligible for the benefit if you made the choice to leave your job after your employer asked you to transfer to a location where your commute would be too long, or if you had to leave your job because your partner’s employment was relocated.

When can I apply?

In some states, it can take weeks for your claim to be approved, so the sooner you file the better, Evermore said.
While most states have a one-week waiting period before they can start paying you benefits, you don’t have to wait to request the relief, she said.

Where do I apply?

What are the requirements of the program?

To receive and keep receiving unemployment benefits, you have to be able to work and actively be seeking new employment, Evermore said.
States have different ways of making sure you’re looking for work, she added. In some cases, you’ll be responsible for keeping a log of work search efforts on your own, and in other states, you’ll have to call in to the state unemployment office and share what jobs you’ve applied to on a regular basis.
“In some states you may also report work search online,” Evermore added.
When you apply for benefits, make sure you learn about how to fulfil any requirements in your state.

Are unemployment benefits taxable?

Prapass Pulsub | Moment | Getty Images

Yes, Evermore said. The benefits are subject to federal taxes and most states tax them, too.
When you start to get unemployment payments, your state will typically give you the option to have taxes withheld.
“I’d always take that option,” Evermore said. “You could be in for a long spell of unemployment and then get hit with a big tax bill.”

What is the typical weekly benefit?

In the third quarter of 2022, the average weekly unemployment benefit was around $385. But there’s a large range in the payments by state. For example, in Washington state, the benefit was nearly $600 during that period. In West Virginia, it was about $305.
There are other resources, too, for people struggling financially due to job loss, Evermore said.
“Unemployment insurance isn’t the only program in the world,” said Evermore, adding those who are out of work can also try applying for food stamps and other government assistance.

How long can I get the benefit?

Yellow Dog Productions | The Image Bank | Getty Images

The standard duration for unemployment benefits is 26 weeks but that timeline varies by state.
For example, Missouri recently slashed its benefit duration, and some workers may only receive payments for eight weeks there.

I got benefits in the pandemic. Can I qualify again?

It’s possible, Evermore said.
Workers are typically eligible for unemployment benefits for a certain amount of weeks per benefit year. Depending on how long has passed since your last period of joblessness, and how many weeks you previously received the benefits, it’s possible you could qualify again after a follow-up job loss for at least some more weeks and possibly another full duration.

I received severance. Will that affect unemployment?

In most states, if your layoff included severance pay, your unemployment benefits will likely be reduced for the period in which you’re still receiving payments from your former employer.
But, again, that depends on your state. In some cases, your severance package will have no impact on your unemployment benefits, Evermore said.

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As prices rise, Americans are racking up more and more credit card debt.
Experts often recommend moving your balance from a high-rate credit card to one with a no-interest offer to reduce the amount you’re paying.
And yet, 37% of those with credit card debt don’t know these balance transfer offers exist, according to a recent report.

Collectively, Americans owe more on credit cards than ever before.
Thankfully, 0% balance transfer credit card offers — which are “one of the best weapons Americans have in the battle against credit card debt” — are even more plentiful than they were a year ago, said Matt Schulz, chief credit analyst at LendingTree.

Yet 37% of those with credit card debt don’t know that balance transfer offers exist, according to a recent Bankrate report.
Here’s how they work, and how to use them to your advantage.

Credit cards are one of the priciest ways to borrow

At the end of 2022, total credit card debt hit a record $930.6 billion, a 18.5% spike from a year earlier, according to the latest report by TransUnion.
The average balance rose to $5,805 over that same period, TransUnion found.

From month to month, credit cards are one of the most expensive ways to borrow money. Card credit card annual percentage rates now stand near near 20%, on average, also an all-time high.

At nearly 20%, if you made minimum payments toward this average credit card balance, it would take you more than 17 years to pay off the debt and cost you more than $8,213 in interest, Bankrate calculated.
Still, many Americans continue to take on ever-increasing amounts of borrowing. And as credit card balances creep higher, Americans’ confidence in their ability to pay their bills declines.

No- or low-interest balance transfers can help

Dan Brownsword | Image Source | Getty Images

How to make the most of a balance transfer offer

There could be a catch: Nearly half of consumers who take advantage of a balance transfer offer don’t pay off the balance during the introductory period that comes with low or no interest, some studies show.
“These cards can be a really good tool, but people need to understand how to use them the best way,” Schulz said.

If you don’t pay the balance off during the initial period, the remaining balance will have a new annual percentage rate applied to it, which is generally about 23%, on average, in line with the rates for new credit.
Further, there can be limits on how much you can transfer and fees attached. Most cards have a one-time balance transfer fee, which is usually around 3% of the tab, but there can be an annual fee, as well.
One late payment can also negate your no-interest offer.

Making the best use of a balance transfer boils down to making those payments on time and aggressively paying down the balance during the introductory period.
Alternatively, Schulz advises cardholders burdened with high-interest debt to reach out to their issuer directly to request a break on interest rates.
Otherwise, borrowers may also be able to refinance into a lower-interest personal loan. Those rates have climbed recently, as well, but at 10%, on average, are still well below what you currently have on your credit card, according to Schulz.
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