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A year-end push to get legislation through during the lame duck session of Congress has omitted some key proposals that would help provide for Americans’ everyday needs.
Here’s what didn’t make the cut and how lawmakers could address that “unfinished business” in 2023.

Parents and children participate in a demonstration organized by the ParentsTogether Foundation in support of the child tax credit portion of the Build Back Better bill outside of the U.S. Capitol on Dec. 13, 2021.
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Washington lawmakers are rushing to get as much done as possible before the calendar year and the lame-duck session of Congress runs out.
Some changes poised to go through could have a big impact on Americans’ finances, namely some big retirement savings updates poised to get included in a year-end spending bill.

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But some other proposed initiatives have not made the cut, and that may also have a big impact on individuals’ and families’ finances until Congress has the chance to revisit them again.
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“Policy advances that would address the everyday needs of low-income people and families were largely left out, despite efforts by many policymakers,” Sharon Parrott, president of the Center on Budget and Policy Priorities, recently wrote of the year-end omnibus package that would keep the government funded through much of 2023.
The “unfinished business” leaves a to-do list for lawmakers on both sides of the aisle next year, she said.
Here’s how the issues that missed the cut this year may crop up again in 2023.

Child tax credit enhancement

A year ago last December, millions of families received their last monthly child tax credit checks.
Legislation to help parents cope with the effects of the Covid-19 pandemic made the child tax credit more generous for the 2021 calendar year. For the first time, that also included advance monthly payments.
The maximum child tax credit sums went up from $2,000 per child to $3,600 per child under age 6 and $3,000 per child ages 6 through 17. Up to half of the more generous sums was sent out in monthly payments to families — $300 per child under 6 and $250 per child ages 6 through 17.
Importantly, it also made the credit fully available to families with little to no income, which helped reduce child poverty.
Now, a big push to renew more generous terms for that tax credit have fallen flat in year-end negotiations.
A key reason why is lawmakers had hoped to attach the effort to corporate tax breaks, which did not end up being considered.
“That’s definitely the biggest, most unfortunate exclusion for the year, no question about it,” Chuck Marr, vice president of federal tax policy at the Center on Budget and Policy Priorities, said of the child tax credit.

The 2021 child tax credit expansion was very successful in driving down child poverty to a record low and helping families meet record costs, Marr noted.
“I think there was a compromise there to be had, and it didn’t happen,” Marr said.
On the bright side, the same compromise to re-up the child tax credit alongside corporate tax breaks may come up again in 2023, he said.
Some lawmakers have insisted the child tax credit gets included in any new tax legislation. “It’s pretty simple — no corporate tax cuts without tax cuts for working families,” Sen. Sherrod Brown, D-Ohio, recently said.
Yet other leaders want to see more rules attached to the child tax credit, such as work requirements, which will likely require compromise, and could mean any new policy may be less generous than the 2021 expansion.
“I think those conversations are going to be starting early next year and continuing throughout the year,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Supplemental Security Income updates

Supplemental Security Income, a federal program that provides benefits to the elderly, blind and disabled, turned 50 this year.
Yet many of the program’s rules have not been updated for decades.
A bipartisan bill from two senators from Ohio — Brown and Republican Rob Portman — would raise the asset limits for beneficiaries to $10,000 for individuals and $20,000 for couples, while also indexing them for inflation.
That proposal did not make the cut in year-end legislation despite high hopes from advocates.

We continue to see a lack of sufficient political will to allow people with disabilities to save.

Rebecca Vallas
senior fellow at The Century Foundation

Today, the program’s asset limits are $3,000 per couple and $2,000 for individuals. That not only limits the amount of savings beneficiaries may have, but it also imposes a marriage penalty on beneficiaries.
“SSI’s punitive and archaic asset limit is the most egregious anti-savings measure in federal law today,” said Rebecca Vallas, senior fellow at The Century Foundation and co-director of the think tank’s Disability Economic Justice Collaborative.
“Yet we continue to see a lack of sufficient political will to allow people with disabilities to save,” Vallas said.
The fate of the proposal is unclear since Portman is retiring this year and it remains to be seen whether another Republican leader will step up to support it, Akabas said.
“It’s going to probably be some time before that gets another opportunity,” Akabas said.

Social Security program funding

The year-end budget deal provides additional funding for the Social Security Administration, but “barely enough to tread water,” Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, recently wrote.
The deal includes a 6% increase, or $785 million, over the agency’s 2022 funding level, Romig said. President Joe Biden had requested an 11% increase, or $1.4 billion more, she noted. House and Senate committees had also backed more funding for the agency.

The additional funding could have helped the Social Security Administration reduce its backlog and long waits for service by updating its technology systems and hire new staff, Romig noted.
“Instead, applicants and beneficiaries face another year of unacceptable waits for the Social Security and other benefits they’ve earned,” Romig wrote.
Congress likely will not revisit funding for the Social Security Administration until next fall, according to Akabas.

More expansions for emergency savings

New retirement proposals poised to move now include a boost for emergency savings. Plan providers will be able to automatically enroll employees in separate accounts where they can set aside up to $2,500 for near-term needs alongside their retirement funds. Another provision would lets plan participants withdraw $1,000 per year for emergencies without penalty, though some restrictions would apply.
But a proposal that would take that further and allow for separate standalone emergency funds outside of retirement accounts did not make it into the legislation.
That would help nearly 50 million workers who do not have workplace retirement plans to set aside emergency funds, according to Akabas.
The proposal likely did not make it into the year-end legislation likely because it is still being crafted, he said.
“I am cautiously optimistic that in the next year or two that that could pass on some other legislation,” Akabas said.

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A provision in pending congressional legislation would replace an existing nonrefundable tax credit for lower-income retirement savers with a limited matching contribution to their qualifying account.
If Secure 2.0 passes as part of an omnibus appropriations bill being voted on this week, the change would take effect in 2027.
The current tax credit is still available, although fewer than half of workers are aware of it, according to research.

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A new incentive for low- and moderate-income individuals to save for their post-working years could be on its way.
Under a provision included in a legislative proposal known as “Secure 2.0” — which is included in an omnibus appropriations bill that cleared the Senate on Thursday and awaited a House vote — a retirement “saver’s match” would be implemented, essentially changing how an existing tax credit works.

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Should the bill pass, people with income under set limits who contribute to a qualified retirement account — i.e., a 401(k) plan — would receive a limited federal “matching” contribution to their nest egg starting in 2027. That amount would be a maximum 50% of up to $2,000 in contributions to a qualifying account (so a maximum $1,000 match per individual).

The match would be phased out (reduced) at income of $41,000 to $71,000 for married couples filing a joint tax return. For single taxpayers, the phase-out range would be $20,500 to $35,500, and for heads of household filers, $30,750 to $53,250.

The current credit isn’t always useful for taxpayers

The move to allow a federal matching contribution is being sought because the current tax credit is nonrefundable, meaning that if you owe no federal income tax, you don’t get the credit.
“The major drawback with the version in law today is that it’s not refundable,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.
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“So individuals who have no federal income tax liability, which is most low- and moderate-income earners, get no benefit from that credit,” Akabas said. “This reform is an attempt to make sure those people receive an incentive and a benefit for putting away money for their future.”
The new saver’s match also would be available to some workers who aren’t permitted to use the current tax credit, such as some government employees (i.e., school teachers) and gig workers, said Kristen Carlisle, general manager of Betterment at Work.
The match would be “a direct, substantial way to increase the retirement savings of lower and middle-income workers, and incentivize good retirement planning habits,” Carlisle said.

More than 108 million people would be eligible for the saver’s match, according to the American Retirement Association.

The existing tax break is still available

In the meantime, the existing tax credit remains available and would would stay intact through 2026 if the provision in Secure 2.0 becomes law. However, only 48% of workers are aware of it, according to a 2021 report from the Transamerica Center for Retirement Studies.
The current tax credit can be a maximum of $1,000 (50% of $2,000 in contributions) for single tax filers with up to $20,500 of income in 2022 and heads of households with up to $30,750 in income. For joint filers, the maximum credit is $2,000 (50% of $,4000 in contributions) for those with up to $41,000 of income.
Above those income limits, the credit phases out — is reduced to either 20% or 10% from 50% — up to income of $34,000 (singles), $68,000 (joint filers) and $51,000 (heads of household).

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Retirement savers generally can’t touch their individual retirement account or 401(k) funds before age 59½ without penalty, generally a 10% levy on early withdrawals.
IRA owners can access their money without penalty in some cases.
Congress may soon add a few more exceptions as part of Secure 2.0 legislation attached to a must-pass omnibus federal spending bill.

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Retirement accounts are meant to fund your lifestyle in later years — and raiding them early generally comes with a stiff financial penalty.
But there are some situations in which account owners — both those with savings in individual retirement accounts and workplace plans like a 401(k) — can access that money early without penalty.

Not that they should necessarily do so.
“The worst thing you can do is take from your retirement account before its intended purpose, because then what will be for your retirement?” said Ed Slott, a certified public accountant and IRA expert based in Rockville Centre, New York. “I would only do this if it was the last resort and this was the only money you had.”
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Savers generally incur a 10% tax penalty if they withdraw money from a retirement account before age 59½. This is on top of any income taxes resulting from the withdrawal.
The list below outlines situations in which IRA owners wouldn’t owe the 10% early withdrawal penalty.

Congress may soon add more. A $1.7 trillion legislative package to fund the federal government for the 2023 fiscal year contains a slew of retirement provisions, collectively named “Secure 2.0.” The measure, expected to pass within days, would add exceptions to the early-withdrawal penalty for IRA owners in cases of domestic abuse and terminal illness, for example.

Here are the current exceptions for those under 59½.
(Note: The first three apply only to IRAs. The others may apply to both IRAs and workplace retirement plans.)

1. Higher education expenses

You may be exempt from the penalty if IRA funds are used to pay qualifying higher-education costs for you, your spouse, or children or grandchildren of you or your spouse.
Eligible costs include tuition, fees, books, supplies, equipment required for a student’s enrollment or attendance and expenses for certain special-needs services. Room and board also qualify for students who attend school at least half-time.
Students must attend a college, university, vocational school or other institution that can participate in U.S. Department of Education student aid programs. (They include “virtually all” accredited, public, nonprofit, and privately owned for-profit institutions, according to the IRS.)

2. ‘First time’ home buyer

Contrary to what the IRS title might suggest, IRA owners don’t necessarily have to be first-time home buyers to avail themselves of this exception. The IRS generally defines a first-time buyer as someone who hasn’t owned a home in the last two years.
Such IRA owners can withdraw up to $10,000 penalty-free. This dollar threshold is a lifetime maximum.
The funds must be used for “qualified acquisition costs.” These are: the costs of buying, building or rebuilding a home, and “any usual or reasonable settlement, financing, or other closing costs,” according to the IRS. The money must be used within 120 days of receipt.

The IRA withdrawal can be used for you, a spouse or your child, among other qualifying family members. If both you and your spouse are first-time homebuyers, each can take distributions up to $10,000 without penalty.
The two-year-limitation period starts on the “date of acquisition”: the day on which you enter into a binding contract to buy, or on which the building or rebuilding begins.

3. Health insurance if unemployed

Distributions to cover health insurance premiums for you, a spouse and dependents may not be subject to a penalty if you lost your job.
To qualify, you must have received unemployment compensation (via a federal or state program) for 12 consecutive weeks. The IRA withdrawal must also occur the year you received unemployment, or in the following year. Further, you must take the withdrawal within 60 days of being reemployed.

4. Death

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Beneficiaries who inherit an IRA upon the owner’s death generally aren’t subject to a penalty if they pull money from the inherited account before age 59½.

5. Unreimbursed medical expenses

A distribution to cover medical costs may not be subject to penalty.
The exception applies to unreimbursed medical expenses that exceed 7.5% of your annual adjusted gross income. The applicable income is that during the year of withdrawal.
For example, if your AGI is $100,000 in 2022, you can use a withdrawal this year to cover unreimbursed medical expenses over $7,500.
You don’t need to itemize tax deductions to get this benefit. (In other words, you can still get it if you take the standard deduction.)
Slott cautioned against one end-of-year snag. If you put a medical bill on your credit card this week or next, that medical expense would count for the 2022 tax year — even if the credit-card bill itself isn’t paid until 2023.
That means an IRA withdrawal linked to that medical expense would have to occur in 2022, not 2023, to get the tax benefit.

6. Birth or adoption

Each parent can use up to $5,000 per birth or adoption from their respective retirement accounts. The funds would cover associated expenses.
The account withdrawal must be made within the year after your child was born or the date on which the legal adoption of your child was finalized.

7. Disability

Certain disabled retirement savers under age 59½ aren’t beholden to the tax penalty.
To qualify, they must be “totally and permanently disabled.” The IRS defines this as being unable to do “any substantial gainful activity” because of physical or mental condition. A physician must certify the condition “can be expected to result in death or to be of long, continued, and indefinite duration.”
In all, it’s a rigid definition that’s hard to meet, Slott said. In practice, someone must generally be near death or bedridden and unable to work, he said.

8. IRS levy

You won’t incur a penalty if the distribution results from an IRS tax levy (i.e., if the IRS takes your retirement funds to satisfy a tax debt).

9. Active reservists

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Reservists in the Army, Navy, Marine Corps, Air Force, Coast Guard or Public Health Service may be exempt from penalty.
They must have been ordered or called to active duty after Sept. 11, 2001, and in duty for 180 or more days or for an indefinite period.
Their account distribution can’t be made earlier than the date of the call to active duty and no later than the close of the active-duty period.

10. Substantially equal periodic payments

This exemption for IRA owners is “very complicated” and likely requires the help of an accountant or advisor, Slott said.
In basic terms, a taxpayer can avoid a penalty by sticking to a formula that outlines an amount of periodic account distributions (at least one per year). These “substantially equal periodic payments” are like an annuity, and are also known as 72(t) payments.
Not only must the saver determine the right amount to withdraw, but they must also stick to the schedule until age 59½ — leaving ample room for error, depending on the time scale, Slott said.
Getting it wrong can be costly. Taking the wrong amount one year, for example, would void the exception, and the taxpayer would owe the 10% penalty for each year of withdrawals that already occurred.
“It’s a very harsh penalty,” Slott said.

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New retirement legislation will make it easier to set aside money for unexpected emergency expenses.
Experts say the results may not only help people avoid a short-term money shortfall but also keep them on track for long-term goals such as retirement.

Coming up with the cash to cover an unexpected emergency expense can be a challenge for many individuals and families.
Studies show an unexpected expense of even $400 may prompt people to borrow to cover the cost. When faced with such bills, workers may be tempted to tap their retirement savings accounts.

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Now, new provisions in retirement legislation called Secure 2.0 moving forward on Capitol Hill would make it easier for workers to set aside emergency funds.
The first change would make it so retirement plan sponsors could automatically enroll employees to set aside up to $2,500 of post-tax money in a separate emergency savings alongside their retirement accounts. Workers could defer money to the emergency savings accounts automatically through their payroll deduction.
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The second change would allow retirement plan participants to withdraw up to $1,000 from their retirement savings per calendar year to cover emergency expenses without incurring a penalty. However, the borrower would have to replace those funds within the following three years before making another similar withdrawal.
Notably, a plan for separate standalone emergency savings accounts outside of retirement plans did not make it into the legislation. That could have helped the nearly 50 million workers who do not have access to retirement plans through their employer, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

“I am cautiously optimistic that in the next year or two that that could pass on some other legislation that would allow for employers to set this up separate and apart from the retirement plan as well,” he said.

Progress after six years of bipartisan efforts

Still, the emergency savings changes, particularly the $2,500 sidecar accounts, could make a big difference, Akabas said, following efforts that began in 2016 with a Bipartisan Policy Center retirement commission and a subsequent proposal from Sens. Cory Booker, D-N.J., and Todd Young, R-Ind.
“There needs to be more attention paid to the emergency savings challenges in this country and more tools given to rank-and-file Americans,” Young said on a recent Bipartisan Policy Center panel.
While some companies have already begun to test out emergency savings plans for employees, a key difference is this legislation will give them the ability to automatically enroll participants, Akabas noted.
Without dedicated emergency funds, individuals often turn to their retirement accounts when they face a cash shortfall, which can lead to the unraveling of their financial security.

In the aftermath of the Covid-19 pandemic, Congress made those retirement assets more accessible, which was a wake-up call as to how much people tend to lean on their retirement plans when they are financially pinched, according to Jeff Cimini, head of retirement product at Voya Financial.
“They just took a lot more than we ever expected,” Cimini said.
As high inflation has raised the cost of living, retirement savers are still turning to their retirement accounts to help cover cash shortfalls. Recent data from Vanguard Group showed the share of retirement savers who withdrew from their 401(k)s to cover financial hardships hit a record high in October.
Without solving the short-term savings shortfall, it will be impossible to resolve long-term retirement savings needs, Cimini said.
“Voya is hugely supportive of the establishment of an emergency savings option within the context of a retirement plan,” he said.

Larger employers likely to lead the way on adoption

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The combination of a retirement account with an emergency fund can help communicate to employees that they need to set aside funds for both their short- and long-term needs. Once they do, their retirement funds will not be the first place they withdraw from.
“We’re very optimistic that this will really have a big impact on long-term retirement security for the U.S. labor force,” Cimini said.
Larger plan sponsors will probably lead the way with adoption of these provisions, Cimini predicted.
Companies have already begun experimenting with emergency savings benefits. Investment firm BlackRock has created a philanthropic Emergency Savings Initiative that has tested offerings with companies such as payroll services company ADP and consumer electronics retailer Best Buy.

Most people won’t save money unless their employer somehow does it for them through a payroll deduction.

Suze Orman
personal finance expert

Personal finance expert Suze Orman has co-founded fintech company SecureSave, which enables employers to set up emergency funds for employees that include automatic contributions and matches.
“Employers need to get involved in this, because most people won’t save money unless their employer somehow does it for them through a payroll deduction,” Orman said at a recent Bipartisan Policy Center panel.
The proposed Secure 2.0 changes are a big acknowledgement from Congress that change is needed, said Timothy Flacke, co-founder and executive director of Commonwealth, a nonprofit focused on building financial security for vulnerable populations that is working with BlackRock’s initiative.
“Congress has essentially said that short-term financial security matters,” Flacke said. “And that in and of itself is a really big deal.”

The changes may not mean everyone will suddenly have ample emergency savings, he said. But they will make having money set aside much more possible for people, which is a great start.
“There are real people out there who will confront very real, very high-cost, very painful financial emergencies who are much more likely now to have a few hundred bucks of their own money that they can draw,” Flacke said.

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New retirement legislation poised for consideration on Capitol Hill may help make it easier to automatically enroll workers in retirement plans, among other changes.
But to keep retirees out of poverty, more fixes are necessary, according to new research.
These retirement changes should be on policymakers’ agendas in the next Congress, one expert said.

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Participation in workplace retirement plans may soon be expanded, thanks to new efforts from lawmakers on Capitol Hill.
A group of retirement provisions, dubbed “Secure 2.0,” have been included in the government spending bill for the 2023 fiscal year.

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But as Congress rushes to push the changes through before the end of the year, the legislation still falls short of addressing the crux of the retirement savings gap in the United States — the lack of access to retirement savings plans, according to researchers at the Schwartz Center for Economic Policy Analysis at The New School.
Secure 2.0 would require certain employers with retirement plans to automatically enroll eligible workers in those plans. That proposal would apply to new 401(k) and 403(b) plans starting in 2025. Certain businesses — those with 10 or fewer employees, those that have been open for less than three years, and church and government plans — would be exempt.
Yet the proposal still leaves a “huge problem untouched,” since employers can still decide whether to offer a retirement plan, said Teresa Ghilarducci, a labor economist and professor of economics and policy analysis at The New School. When they do provide plans, their designs are subject to little regulation, she said.

The proposed automatic enrollment expansions may have very little effect, according to Ghilarducci, because they do not include mandates for employer contributions or for employers to provide plans.
“The big part of the problem is that low-income people need help contributing and half of the people don’t have an employer that has a plan,” Ghilarducci said.

“And Secure 2.0 doesn’t do anything about those two major problems,” she said.

Low-income workers lack access to retirement plans

The statistics around retirement preparedness are grim for certain populations.
In a speech in Washington, D.C., earlier this month U.S. Secretary of Labor Marty Walsh noted just 36% of Black households ages 55 to 64 have any retirement savings. That number goes down to 30% for Hispanic households. Those who do have savings often have very little set aside, he said.
“This is a crisis that we have to address in the United States of America,” Walsh said.
A Bipartisan Policy Center-Morning Consult poll from earlier this year found just 52% of individuals with $50,000 or less in household income have access to an employer-sponsored retirement plan compared with 79% of people with higher household incomes.
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The “flawed system” has led the typical older worker earning less than $40,000 a year to have nothing saved for retirement, according to The New School’s research.
Older workers earning between $40,000 and $115,000 per year have a median $60,000 in savings. Meanwhile, workers earning over $115,000 have median savings of $200,000.
Up to 40% of middle-income workers are at risk of moving into poverty or near poverty in retirement, according to The New School’s research.
Between 2019 and 2045, the number of people over 62 who are in or near poverty will increase 22.3%, the report projects, from 18 million to 21.3 million.
Four key policy changes could prevent that, according to Ghilarducci.
The proposals are inspired by the recent introduction of the Retirement Savings for Americans Act. The bill was proposed in early December by Sens. John Hickenlooper, D-Colo., and Thom Tillis, R-N.C., and Reps. Terri Sewell, D-Ala., and Lloyd Smucker, R-Penn.

1. Create a universal retirement plan

For starters, we should abandon the hope that employers will cover everyone with retirement plans, according to Ghilarducci. Instead, creating a universal retirement plan may better accomplish that goal.
“A universal access plan is one in which everyone, regardless of what their employer does, is in a retirement plan,” Ghilarducci said.
The idea is included in the Retirement Savings for Americans Act, which would establish portable tax-advantaged retirement savings accounts for workers. Full- and part-time workers who do not already have access to retirement plans would be automatically enrolled in the program.
Importantly, the universal retirement plan would take out the voluntary component, Ghilarducci said. Contributions would happen with every paycheck. Moreover, just like you cannot borrow against your Social Security benefits, you mostly would not be able to access these funds until retirement.
For low-income workers who earn less than the median income, the government would also contribute to their retirement plans alongside the workers.
The retirement accounts would include a menu of low-fee investments that savers could choose from.

2. Make tax expenditures more equitable

A refundable federal tax credit could be made available to eligible low- to moderate-income individuals. This would be available even to people who do not have a substantial amount of money or do not file a federal tax return, Ghilarducci said.
The Retirement Savings for Americans Act calls for a refundable tax credit with up to 4% in matching contributions for low- to moderate-income workers. The credit would begin to phase out at median income.
This change would make the retirement system more equitable by ensuring the $250 billion already spent to help people save would include the bottom half of the income distribution. Currently, 70% goes to the top 20%, while less than 5% goes to the bottom half, Ghilarducci said.
The Secure 2.0 proposal would make this worse by loosening restrictions on people who own substantial individual retirement accounts, she said. The bill would raise the age when retirees must take required minimum distributions from 72 to 75, a change that would be phased in over 10 years.

3. Protect retirement savings

Early withdrawals from retirement accounts can undermine retirement security, particularly for low-income workers. Creating safeguards to prevent those distributions can help ensure the money is still there when an individual reaches retirement, according to The New School research.
Retirement assets should also not be counted when determining an individual’s eligibility for public assistance benefits, the research said.
Notably, the Retirement Savings for Americans Act aims to make it easier for workers to keep the retirement accounts set up through the new program by making it so they can keep them throughout their lives and stop and start their contributions at any time. It would also be possible to pass the money in the accounts down to future generations.

4. Strengthen and expand Social Security

Social Security helps guarantee people will not fall into poverty, no matter what happens to them.
As enhancements including universal retirement plans and private savings are put into effect, Social Security should also be strengthened and expanded, Ghilarducci said.
Benefits are a major source of income for the bottom half of the income distribution, and that money brings those beneficiaries up more than those in higher income tiers.
“It brings us actually a little closer together; it creates a community,” Ghilarducci said.
The Retirement Savings for Americans Act does not include Social Security reform. However, other legislative proposals have called for expanding the program.

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As part of its massive $1.7 trillion spending package for 2023, Congress is planning to up the maximum annual Pell Grant award to $7,395 — a $500 increase.
That’s the largest jump in a decade.

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As part of its massive $1.7 trillion spending package for 2023, Congress is planning to up the maximum annual Pell Grant award to $7,395 — a $500 increase from this school year.
If it passes, that would be the largest jump for the grant in more than a decade.

President Joe Biden had previously called to raise the Pell Grant by even more, to a maximum allotment of $8,670 in 2023, and has said he wants to see the payments double by 2029.

Pell Grants are one of the biggest sources of financial aid available to college students, and more than 6 million students received them in 2020.
Each year, Congress decides how much to allocate to the maximum Pell Grant, and in some years it has reduced the payment.
Here’s what to know about the assistance.

Pell Grants could be worth up to $7,395

In the 2023-2024 academic year, Pell Grants could range from a minimum of about $740 to a maximum of $7,395, depending on how much a college calculates that a student’s family will be able to contribute to their college costs, said higher education expert Mark Kantrowitz.

Currently, the most a student can get a year under the program is $6,895.
In some cases, a student can receive more than the maximum aid for a single year if they’re in an accelerated degree program, Kantrowitz added.

Funds help undergrads from ‘low-income families’

You must submit a FAFSA to qualify

There’s a limit to how many Pell Grants you can get

College students typically can receive the grant for up to six years. That’s important to know, considering more than half of undergraduates take more than four years to graduate.

How aid is paid depends on your college

At most colleges, the grant is given out in two disbursements, at the start of each term, Kantrowitz said.
“However, many colleges prefer to make monthly or biweekly disbursements,” he added. “This is often called ‘Pell as a paycheck.'”  

Funds typically cover tuition, but other expenses qualify

Pell Grant funds are applied first to tuition and fees, Kantrowitz said. Any college-owned or -operated housing could also be covered by the aid.
If there’s still money left over after those costs are covered, it’s usually disbursed to the student within 14 days, Kantrowitz said.
“The student can then use the money to pay for other college costs, such as textbooks,” he said.

You usually don’t have to pay the money back

A federal Pell Grant, unlike a student loan, typically doesn’t have to be repaid.
The exceptions are rare, and include cases in which your enrollment status changed from full time to part time or if you left a program early.

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Bob Pisani’s book “Shut Up & Keep Talking”

(Below is an excerpt from Bob Pisani’s new book “Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange.”)
Most people like to think that they’re rational. But — at least when it comes to investing — that’s not always the case.

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5 hours ago

Way back in 1979, Daniel Kahneman and Amos Tversky noted that human beings did not act the way classical economics said they would act.
They were not necessarily rational actors. They did not buy low and sell high, for example. They often did the opposite.
Why? Kahneman and Tversky proposed a theory, which they called prospect theory. Their key insight was that individuals don’t experience gains and losses in the same way. Under classical theories, if someone gained $1,000, the pleasure they feel should be equal to the pain they would feel if they lost $1,000.
That’s not what Kahneman and Tversky found. They found that the pain of a loss is greater than the pleasure from a gain. This effect, which came to be known as loss aversion, became one of the cornerstones of behavioral economics.
In later years, Kahneman and Tversky even attempted to quantify how much stronger the loss was. They found that the fear of an emotional loss was more than twice as powerful as an emotional gain.

That went a long way toward explaining why so many people hold on to losing positions for so long. The opposite is also true: people will tend to sell their winners to lock in gains.

You have more biases than you think

Over the years, Kahneman and many others went on to describe numerous biases and mental shortcuts (heuristics) that humans have developed for making decisions.
Many of those biases are now a common part of our understanding of how humans interact with the stock market.
These biases can be broken down into two groups: cognitive errors due to faulty reasoning, and emotional biases that come from feelings. Loss aversion is an example of an emotional bias.
They can be very tough to overcome because they are based on feelings that are deeply ingrained in the brain. See if you recognize yourself in any of these emotional biases.
Investors will:
Come to believe they are infallible when they hit a winning streak (overconfidence).
Blindly follow what others are doing (herd behavior).
Value something they already own above its true market value (endowment effect).
Fail to plan for long-term goals, like retirement, because it’s easier to plan for short-term goals, like taking a vacation (self-control bias).
Avoid making decisions out of fear the decision will be wrong (regret aversion bias).

There’s also cognitive errors

Cognitive errors are different. They don’t come from emotional reactions, but from faulty reasoning. They happen because most people have a poor understanding of probabilities and how to put a numerical value on those probabilities.
People will:
Jump to conclusions. Daniel Kahneman, in his seminal 2011 book “Thinking, Fast and Slow,” said that: “Jumping to conclusions on the basis of limited evidence is so important to an understanding of intuitive thinking, and comes up so often in this book, that I will use a cumbersome abbreviation for it: WYSIATI, which stands for what you see is all there is.”
Select information that supports their own point of view, while ignoring information that contradicts it (confirmation bias).
Give more weight to recent information than older information (recency bias).
Convince themselves that they understood or predicted an event after it happened, which leads to overconfidence in the ability to predict future events (hindsight bias).
React to financial news differently, depending on how it is presented. They may react to the same investment opportunities in different ways or react to a financial headline differently depending on whether it is perceived to be positive or negative (framing bias).
Believe that because a stock has done well in the past it will continue to do well in the future (the gambler’s fallacy).
Overreact to certain pieces of news and fail to place the information in a proper context, making that piece of news seem more valid or important than it really is (availability bias).
Rely too much on a single (often the first) piece of information as a basis for an investment (such as a stock price), which becomes the reference point for future decisions without considering other pieces of information (anchoring bias).

What’s the takeaway?

People have so many biases that it’s tough to make rational decisions.
Here’s a few key takeaways:
It’s possible to train people to think more rationally about investing, but don’t expect too much. With all this brilliant insight into how people really think (or don’t), you’d think that as investors we wouldn’t be repeating the same dumb mistakes we have been making for thousands of years.
Alas, investing wisdom and insight remains in short supply because 1) financial illiteracy is widespread. Most people (and sadly most investors) have no idea who Daniel Kahneman is, and 2) even people who know better continue to make dumb mistakes because overriding the brain’s ‘react first, think later’ system that Daniel Kahneman chronicled in “Thinking, Fast and Slow” is really, really hard.
The indexing crowd got a boost from behavioral economics. Billions of dollars have flowed into passive (index-based) investing strategies in the past 20 years (and particularly since the Great Financial Crisis), and with good reason: unless you want to endlessly analyze yourself and everyone around you, passive investing made sense because it reduced or eliminated many of those biases described above. Some of these passive investments can have their own biases, of course.
Stocks can be mispriced. Psychology plays a large part in setting at least short-term stock prices. It is now a given that markets may not be perfectly efficient and that irrational decisions made by investors can have at least a short-term impact on stock prices. Stock market bubbles and panics, in particular, are now largely viewed through the lens of behavioral finance.

Behavioral economics wins the Nobel Prize

At least the world at large is recognizing the contributions the behavioral economists have made.
Daniel Kahneman won the Nobel Memorial Prize for Economic Sciences in 2002 for his work on prospect theory, specifically for “having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.”
Other Nobel awards for work in behavioral economics soon followed. Richard Thaler, who teaches at the University of Chicago Booth School of Business, won the Nobel Memorial Prize in Economic Sciences in 2017. Thaler, too, had demonstrated that humans acted irrationally, but they did so in predictable ways, giving hope that some form of model could still be developed to understand human behavior.
Yale Professor Robert Shiller won the 2013 Nobel Memorial Prize in Economic Sciences (with Eugene Fama and Lars Peter Hansen) for his contribution to our understanding of how human behavior influences stock prices.
Bob Pisani is senior markets correspondent for CNBC. He has spent nearly three decades reporting from the floor of the New York Stock Exchange. “In Shut Up and Keep Talking,” Pisani shares stories about what he has learned about life and investing.

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Wells Fargo also agreed to pay a $1.7 billion civil penalty, which marks the largest fine ever doled out by the Consumer Financial Protection Bureau.
$1.3 billion of the $2 billion in consumer redress already has reached 11 million accounts, according to the CFPB.
If you are among the customers affected, the bank will contact you.

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People owed a piece of the $2 billion that Wells Fargo has agreed to pay to customers affected by some of its banking practices could soon receive those funds.
The nation’s fourth-largest bank reached a settlement with the Consumer Financial Protection Bureau, announced Tuesday, to resolve customer abuses related to auto lending, deposit accounts and mortgage lending, affecting about 16 million accounts.

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Wells Fargo also agreed to pay a $1.7 billion civil penalty — the largest ever doled out by the CFPB.
“We have already communicated with many of the customers who may have been impacted by the matters covered in the settlement, and those efforts are ongoing,” a Wells Fargo spokesperson told CNBC.

In other words, if you are among the affected customers, you may already have received your share of the $2 billion, or you will automatically hear from Wells Fargo. You do not need to take any action, the bank said.
The CFPB said that customers of the bank were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed and had payments to auto and mortgage loans misapplied. Additionally, Wells Fargo charged consumers unlawful surprise overdraft fees and applied other incorrect charges to checking and savings accounts, and improperly froze some accounts, the CFPB said.

$1.3 billion has already reached 11 million accounts

More than 11 million customer accounts already have received more than $1.3 billion related to auto loan issues. Another 5 million customers with deposit accounts are receiving $500 million in remediation, including $205 million related to surprise overdraft fees, and thousands of customers with mortgages will receive a piece of at least $195 million, a CFPB spokesperson said.

The amount that each harmed consumer will get (or already got) depends on the specifics. For customers whose vehicles were wrongly repossessed, the remediation includes $4,000, but could be higher. For deposit accounts that were wrongly frozen, the settlement calls for $150 for each affected customer.
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“As we have said before, we and our regulators have identified a series of unacceptable practices that we have been working systematically to change and provide customer remediation where warranted,” said Charlie Scharf, Wells Fargo CEO, in the company’s press release about the settlement.
“This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us,” Scharf said.

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