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The Biden administration’s new affordable repayment plan for student loan borrowers, as well its debt cancellation package, are at risk from legal attacks.
Amid the anxiety-provoking news for borrowers, here’s what relief they can still count on.

Alexandra Pavlova | Getty Images

The Biden administration’s efforts on student loan forgiveness have repeatedly been met with legal challenges. The Supreme Court struck down President Joe Biden’s first attempt at wide-scale forgiveness last summer.
Now, its new income-driven repayment plan (the Saving on a Valuable Education plan known as SAVE) is partially suspended after Republican-led states, including Arkansas, Florida and Missouri, filed lawsuits against it earlier this year. And experts say Biden’s do-over effort at delivering sweeping debt forgiveness is almost certain to face similar opposition.

Amid all the anxiety-provoking news, here’s what relief student loan borrowers can still count on — at least for now.

Most of SAVE plan is still in effect

The Biden administration rolled out the SAVE plan in the summer of 2023, describing it as “the most affordable student loan plan ever.” Indeed, the terms of the new income-driven repayment plan are the most generous to date, making it controversial among critics of debt forgiveness. So far, around 8 million borrowers have signed up for SAVE, according to the White House.
Specifically, SAVE comes with lower monthly payments than any other IDR plan, and leads to quicker debt erasure for those with small balances. Some people can get their debt cleared after just 10 years, whereas the other IDR plans typically only lead to that relief in 20 years or 25 years.
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In late June, two federal judges in Kansas and Missouri temporarily halted significant parts of SAVE, after a number of red states argued that the Education Department overstepped its authority and essentially was trying to find a roundabout way to forgive student debt after the Supreme Court blocked its sweeping plan in June 2023.

Since then, the Biden administration successfully appealed one of the injunctions against SAVE. As a result, most of the program remains in effect for the time being.
Many borrowers enrolled in SAVE should benefit from the reduction of monthly bills to 5% of their discretionary income, compared with the 10% or more requirement under other IDR plans. The government also covers any unpaid interest each month for SAVE enrollees.
“Borrowers enrolled in the SAVE plan can still access its considerable benefits, including undergraduate loan payments cut in half, as well as protection against interest accruing if borrowers are making their monthly payments,” U.S. Department of Education Secretary Miguel Cardona said in a statement.

Because the injunction against SAVE regarding expedited loan forgiveness is still active, borrowers aren’t able to get their loans excused under the plan’s expedited timeline.
The legal whiplash over the SAVE plan has been a major headache for student loan borrowers, and made it hard for them to budget, said Aissa Canchola-Bañez, policy director at the Student Borrower Protection Center.
“Borrowers shouldn’t be expected to live court judgment by court judgement,” Canchola-Bañez said. “[They] deserve relief and this is why it’s critical for the administration to finalize its debt relief rules and enact debt relief for as many borrowers as possible.”

Sweeping loan forgiveness will face lawsuits, too

The Biden administration is working as quickly as it can to finalize its so-called Plan B for loan forgiveness, which is a more targeted aid package than its first attempt, but one that could still reach tens of millions of Americans.
The U.S. Department of Education recently disclosed that it will publish its final rule on its plan sometime in October. It’s possible the department will try to start forgiving people’s debts that month.
Those who stand to benefit from the relief include borrowers who have seen their balances grow beyond what they originally borrowed and those who have already been in repayment for decades.

Yet it’s unclear how far the Education Department will get. Lawsuits are expected to follow swiftly, said higher education expert Mark Kantrowitz.
A recent Supreme Court ruling could also make it harder for Biden’s revised plan to survive those legal attacks, Kantrowitz said.
The high court in late June overruled the so-called Chevron doctrine, a 40-year-old precedent that required judges to defer to a federal agency’s interpretation of laws in question. The 6-3 ruling, which split the conservative-majority court along ideological lines, is expected to undermine the federal government’s regulatory power.
But there is some good news for borrowers, Kantrowitz said.
“The SAVE repayment plan, on the other hand, is not at risk,” he said, adding that Congress gave the U.S. Department of Education explicit authority to amend the terms of loan repayment plans for students.
In the meantime, the Education Department’s other income-driven repayment plans and the Public Service Loan Forgiveness program remain unscathed by legal drama. Consumer advocates encourage all borrowers to research what, if any, relief they may be eligible to receive. More

About 57% of polled Gen Zers are willing to buy a fixer-upper home, according to a new report by Clever Real Estate.
The median sale price of a fixer-upper house is about $283,000, according to StorageCafe, which analyzed data partner division Point2, a real estate site. That’s roughly 29% cheaper than a move-in ready home.

About 1 in 5 Gen Zers, or 22%, say a lack of affordable starter homes poses as a barrier towards homeownership, according to a new report. Some believe fixer-upper homes might be the answer to the issue.
A fixer-upper is an existing house that needs varying degrees of maintenance work and is typically offered at a low purchase price, by Redfin’s definition.

More than half, 57%, of Gen Zers polled said they are willing to put an offer in on a fixer-upper, according to a new report by Clever Real Estate. The site surveyed 1,000 Generation Z adults 18 and older; 126 of the total were homeowners.
However, some of those who went that route are already rethinking their decisions. To that point, of the 40% of Gen Z homeowners who did buy a fixer-upper, about 27% regret it, the report found. 
Given the survey’s small base of homeowners, it’s hard to say how fixer-upper regrets might play out on a larger scale. But experts say it’s not unusual for buyers of such properties to feel overwhelmed.
“A lot of them are first-time buyers; they don’t really know the true costs of homeownership and how these renovations and repairs can really be a lot,” said Jaime Dunaway-Seale, a data writer at Clever Real Estate.
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Buying a fixer-upper home can mean savings in the short term, but would-be buyers need to keep renovation costs in mind, as well as the home’s current functionality, said Marine Sargsyan, staff economist at Houzz, a home renovation and design site. For example, if your new home doesn’t have a usable bathroom that might delay your ability to move in.
“Functionality above everything. Anything you have in your house has to function,” she said. “If it doesn’t, then see how much it’s going to cost for you to replace [it].” 

‘Young buyers are having to make trade-offs’

As homeownership affordability is out of reach for many Americans, a fixer-upper home could mean short-term savings.
The median cost of a fixer-upper house is about $283,000, according to a May report from StorageCafe, which analyzed data from its sister division, Point2. That is about 29% lower than a move-in ready home, saving buyers roughly $117, 000, StorageCafe found.
“Young buyers are having to make trade-offs because housing prices are so expensive,” said Susan Wachter, professor of real estate and professor of finance at The Wharton School of the University of Pennsylvania.
Some Gen Z buyers are even willing to buy fixer-uppers with significant disrepairs or outdated features that pose great risks. Over half, 56%, of Gen Zers in the Clever Real Estate survey said they would buy a home with asbestos, a mineral fiber that can increase the risk of developing lung diseases if exposed to it.

When shopping around for fixer-upper homes, make sure the house is safe and livable enough not to cause any health and safety issues, Sargsyan explained.
“Make sure that there is no toxin in the house,” she said.
It doesn’t take extreme deterioration for a fixer-upper to generate significant repair costs. Many of the existing homes in the U.S. were built decades ago, according to the 2022 American Community Survey by the U.S. Census Bureau. The survey found that the median age of owner-occupied homes in the U.S. is about 40 years.
“Homebuyers have to make a compromise along the way, and often it’s the age or the condition of the home,” Jessica Lautz, deputy chief economist at the National Association of Realtors, recently told CNBC.

Functionality above everything. Anything you have in your house has to function.

Marine Sargsyan
staff economist at Houzz, a home renovation and design site

About 51% of surveyed homeowners spent $25,000 or more on home renovation projects in 2023, up from 44% in 2021, according to the 2024 U.S. Houzz & Home Study. Houzz surveyed 33,830 homeowners of ages 18 and older from Jan. 19 to Feb. 27.
While cash from savings continues to be the most common way homeowners fund renovation projects, or 83%, credit card use has increased, Houzz found. About 37% of homeowners paid for their repair projects with credit cards, up from 28% who did so in 2022.

Five things to watch for in a fixer-upper house

If you’re considering a fixer-upper, ask thorough questions to the home seller or real estate agent about the property, such as when the house was built, experts say. If you get as far as the home-inspection process, line up a home inspector who can help you compile the issues with the house.
Here are five key things to pay attention to if you’re considering buying a fixer-upper house:

Roof: If it’s a leaky roof, you have to figure out how much it’s going to cost to fix, said Sargsyan. Roof repairs can be significant, and you also have to consider the damage that leaks might have caused inside the home. The median cost of roofing upgrades hovers around $12,000, according to Houzz.

Plumbing: Find out the condition of the home’s pipes and plumbing, such as where they are, where do they go, and when was the last time they were upgraded, Sargsyan said. Older pipes are more likely to break or crack if they were installed before 1980, when cast iron or clay were typical materials, according to Short Elliott Hendrickson, Inc., a building company based in St. Paul, Minnesota.

Electricity: Find out if the home’s wiring is in good condition, and when it was last updated. Older homes often do not have safety devices like ground fault circuit interrupters. Taking a look at the electric panel can also give you clues about the home’s wiring system, according to Lippolis Electric Inc., an electrical contractor company in Pawling, New York. The median spend on electrical system upgrades rose to $2,000 in 2023 from $1,800 in 2020, Houzz found. “It’s important to understand the overall capacity of your electrical because you don’t want to plug in too many things and then cause an outage for yourself,” Sargsyan said. “That’s also a big consideration.”

Walls and stairs: Make sure the walls are safe, Sargsyan said. If there are cracks in the walls and ceilings, uneven floors, and difficulty opening and closing doors could indicate underlying problems, according to Perma Pier, a foundation repair company in Texas. And if there are stairs in the house, make sure they are safe to walk on, Sargsyan said.

Overall land: Understand the overall land the house was built on, she said. Look for evidence that problems with the home stem from the surrounding land, like indications the basement has flooded or cracks. “Is there going to be some sort of surprise if it rains too much, especially with the weather changes in recent years?” she said. More

The consumer price index rose 3% in June 2024 from a year earlier, a decline from 3.3% in May, according to the U.S. Bureau of Labor Statistics.
The inflation rate has declined significantly from a 9.1% pandemic-era peak in 2022.
Households have seen relief for staples such as groceries and gasoline.

David Paul Morris/Bloomberg via Getty Images

Inflation fell further in June as lower gasoline prices combined with other easing price pressures to bring relief for consumers’ wallets.
The consumer price index, a key inflation gauge, rose 3% in June from a year ago, down from 3.3% in May, the U.S. Department of Labor reported Thursday.

The CPI gauges how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.

Perhaps the “most encouraging” news for consumers is that inflation for household necessities has cooled dramatically, said Mark Zandi, chief economist at Moody’s Analytics.
“The prices for staples — food at home, gasoline, new-lease rents — they haven’t changed in about a year,” Zandi said. “So people are paying the same for those staples today that they were a year ago.”
The April inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981.

However, it remains above policymakers’ long-term target, around 2%.

“We continue to expect inflation to grind lower in the months ahead as input cost pressures ease and more tepid consumer demand makes it harder [for businesses] to raise prices,” Sarah House and Aubrey George, economists at Wells Fargo Economics, wrote in a note this week.
However, additional improvements are likely to be “slow-going,” they wrote.

Good sign for Fed interest rate cut in September

The U.S. Federal Reserve uses inflation data to help guide its interest rate policy. It raised interest rates to their highest level in 23 years during the Covid-19 pandemic era, pushing up borrowing costs for consumers and businesses in a bid to tame inflation.
Last month, Fed officials forecast they would start cutting rates by the end of 2024.
“All indications are inflation has moderated, is back close to the Fed’s target and consistent with a rate cut in September,” Zandi said.

Gasoline prices weigh on inflation

There has also been a broad pullback in prices at the grocery store.
“Food at home” prices have risen just 1.1% since June 2023, according to CPI data.
Consumers have more “breathing room” at the store amid “growing promotional activity” among retailers, while a few “major” companies recently announced price cuts “that are likely to pressure competitors’ pricing,” wrote economists House and George.

‘Core’ CPI at lowest level in three years

While annual data on inflation trends is helpful, economists generally recommend looking at monthly numbers as a better guide of short-term movements and prevailing trends.
They also generally like to examine “core” inflation readings. They strip out food and energy prices, which can be volatile from month to month.
The monthly core CPI reading was 0.1% in June, the smallest increase in about three years, since August 2021. It has declined for three consecutive months, from 0.4% in March. To get back to target, economists say the monthly reading should consistently be in the range of about 0.2%.
“Core” CPI has risen 3.3% since June 2023, the smallest 12-month gain since April 2021.

Housing is the largest component of core CPI and therefore has an outsized effect on inflation readings. It has accounted for nearly 70% of the total 12-month increase in core CPI.
Shelter inflation has moderated much slower than expected, one of the big reasons inflation has not yet fallen back to target, economists said.
The shelter index lags broader trends in the rental market due to how the government constructs it.
However, economists expect shelter to throttle back further since inflation for market rents has plummeted. For example, the annual inflation rate for new rental contracts sunk to 0.4% in the first quarter of 2024 — lower than its pre-pandemic baseline — from record highs of around 12% just two years earlier, according to Bureau of Labor Statistics data.

There were encouraging signals in the latest CPI report. Monthly shelter inflation dropped to 0.2% after being stuck at 0.4% for four consecutive months. It was the smallest monthly gain since August 2021.
“It should continue to cool off,” said Joe Seydl, senior markets economist at J.P. Morgan Private Bank.
“It just takes time,” he added.

Services inflation is the trouble spot

Inflation for physical goods spiked as the U.S. economy reopened in 2021. The Covid-19 pandemic disrupted supply chains, while Americans spent more on their homes and less on services such as dining out and entertainment.
It is a different story now. Goods inflation has largely normalized, while services is a fly in the ointment.
“The goods side looks very benign at the moment,” said Olivia Cross, a North America economist at Capital Economics. “Where there’s work to be done is in some areas of core services and in shelter.”
For example, prices for services such as motor vehicle insurance and medical care jumped a “notable” 19.5% and 3.3% since June 2023, respectively, the BLS said.

The prices for staples — food at home, gasoline, new-lease rents — they haven’t changed in about a year.

Mark Zandi
chief economist at Moody’s Analytics

A surge in new and used car prices a few years ago is likely now fueling high inflation for car insurance and repair, since it generally costs more to insure and repair pricier cars, economists said.
It also takes a long time — a year, two or even three — for higher labor costs in health care to translate to CPI readings due to a long contracting process, Zandi said. Higher pandemic-era wages in health care are now nudging up medical care CPI and will likely do so over the coming year, he said.

The services sector is generally more sensitive to inflationary pressures in the labor market such as strong wage growth.
Record-high demand for workers as the pandemic-era economy reopened pushed wage growth to its highest level in decades. The labor market has since cooled and wage growth has declined, though it remains above its pre-pandemic level.
“Inflationary pressure from the labor market has dissipated quite strongly,” Cross said.

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The Social Security cost-of-living adjustment could be 2.7% next year, according to a new estimate based on government inflation data released on Thursday.
While the pace of inflation continues to subside, retirees and other Social Security beneficiaries continue to contend with higher costs.
The Social Security COLA estimate for 2025 is not official and is subject to change.

A shopper scans coupons in a grocery store in Washington, D.C., on May 23, 2024. 
Tom Williams | Cq-roll Call, Inc. | Getty Images

The pace of inflation is coming down, which continues to point to a lower Social Security cost-of-living adjustment for retirees and other beneficiaries in 2025.
The Social Security cost-of-living adjustment, or COLA, may be 2.7% next year, according to an estimate from Mary Johnson, an independent Social Security and Medicare policy analyst, based on new government data released Thursday.

That inflation measure, the consumer price index — which tracks the average change in prices paid by consumers on a basket of goods and services — reached about its lowest 12-month rate in more than three years, based on June data.
Social Security adjusts benefits each year based on a subset of the CPI — the Consumer Price Index for Urban Wage Earners and Clerical Workers. The CPI-W in June was up 2.9% over the past 12 months, according to the Bureau of Labor Statistics.

The new 2.7% COLA estimate is down from Johnson’s previous prediction of a 3% benefit boost based on May CPI data. In 2024, Social Security beneficiaries received a 3.2% cost-of-living adjustment.
The Senior Citizens League, a nonpartisan senior group, estimates the COLA could be 2.63% in 2025.
Yet while the rate of price growth has come down, retirees, disabled individuals and others who rely on Social Security benefits for income are still contending with higher costs, Johnson explained.

For example, beneficiaries typically spend about half their budgets on shelter costs, a category that has stayed higher even as the rate of broader inflation has come down.
Other categories that continue to outpace the overall rate of inflation include food, electricity, and hospital and outpatient medical services, according to Johnson.
The average grocery item with prices tracked by the CPI jumped by 24% from 2020 to 2023, according to The Senior Citizens League.
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To be sure, the estimate for the Social Security cost-of-living adjustment for 2025 is subject to change. It may go up or down a bit from the current estimate, Johnson predicts.
The Social Security Administration officially determines the cost-of-living adjustment by comparing the third-quarter CPI-W data for that year to the third quarter of the previous year. If there is a percentage increase from one year to the next, that determines the COLA. However, if there is no increase, there is no COLA.
“I don’t think we’re going to erase any COLA this year,” Johnson said. “I think your danger for that is going to be next year, especially if there’s some recessionary trends going on.”
The agency typically announces the cost-of-living adjustment for the following year in October. More

The Treasury Department and the IRS announced the collection of more than $1 billion in tax debt from high-income individuals over the past year.
In September, the IRS announced plans to expand its scrutiny of those making more than $1 million annually with more than $250,000 in recognized tax debt.
However, the funding enacted in 2022 that is allowing the IRS to pursue its plans still has its critics, particularly among congressional Republicans.

Internal Revenue Service Commissioner Danny Werfel testifies before the House Appropriations Committee on Capitol Hill in Washington, May 7, 2024.
Kevin Dietsch | Getty Images News | Getty Images

The U.S. Department of the Treasury and the IRS on Thursday announced what they called a “major milestone” of collecting more than $1 billion in tax debt from high-income individuals over the past year.
With tens of billions in new funding, the IRS announced plans in September to expand its scrutiny of those making above $1 million annually with more than $250,000 in recognized tax debt.  

“The IRS has collected $1 billion from millionaires and shown that it can successfully launch strategic new initiatives and achieve the greatest return on investment,” Treasury Secretary Janet Yellen told reporters during a press call.
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If funding is sustained, IRS investments in enforcement, technology and data could generate up to $851 billion through 2034, the agencies estimated in February.
The infusion of IRS funding, enacted via the Inflation Reduction Act in 2022, still has its critics, however, particularly among congressional Republicans.
“During the past decade, the IRS didn’t have the resources or staffing to pursue high-income earners who our compliance team knew owed taxes,” IRS Commissioner Danny Werfel said during the press call.

Werfel said unpaid taxes collected from similar earners were negligible before Inflation Reduction Act funding due to budget constraints. “The difference is really like night and day,” he said. 
The audit rate for taxpayers earning $1 million or more was 0.7% in 2019, the most recent data available, compared with 7.2% in 2011, according to the IRS.
Both the U.S. Government Accountability Office and the U.S. Treasury Inspector General for Tax Administration have recently scrutinized the IRS’ high-income audit process. While both agencies’ reports addressed its audit selection process, the Treasury report specifically called out a higher rate of IRS audits of certain high-earning filers without changes for the taxpayer.
“Our goal is always to eliminate the risk of a zero-balance-due audit,” Werfel said on the press call about the agencies’ reports.

The latest announcement comes less than one month after the IRS and Treasury unveiled plans to close what they called a “major tax loophole” used by large, complex partnerships. The crackdown could raise $50 billion in tax revenue over the next 10 years, according to the agencies. More

The shelter inflation index is the main impediment to the consumer price index falling back to the Federal Reserve’s target.
The CPI shelter index has remained elevated even as inflation for market rents has plummeted.
That’s due to how the Bureau of Labor Statistics constructs its housing inflation index.

Housing inflation has remained stubbornly high even as inflation in the broad U.S. economy has cooled significantly from peak levels during the pandemic era.
Its painfully slow decline is the main impediment keeping the consumer price index from falling back to policymakers’ target, economists said.

“We see it as the last remaining leg” before CPI normalizes, explained Joe Seydl, senior markets economist at J.P. Morgan Private Bank.
Housing accounts for 36% of the CPI index — by far the largest share relative to other categories like food and energy — since it’s the biggest expense for the average household. Movements in shelter prices therefore have an outsized influence on inflation readings.
At a high level, “shelter” inflation is a measure of U.S. rental prices, said Jessica Lautz, deputy chief economist at the National Association of Realtors.
But the way Bureau of Labor Statistics calculates those prices means the shelter inflation index lags trends in the real-time rental market (as explained in more detail below).

Why CPI shelter inflation has fallen slowly

The pullback in shelter inflation has been slower than expected, economists said.

It fell to a 5.2% annual rate in June 2024 from a peak around 8% in early 2023, according to CPI data. Its current level is about 2 percentage points above its pre-pandemic baseline.
“[Shelter] has moved in the right direction,” said Olivia Cross, a North America economist at Capital Economics. “It’s just moving much, much slower than anyone really expected.”

This dynamic may seem at odds with the current state of the rental market.
The annual inflation rate for new rental contracts has plummeted to 0.4% in the first quarter of the year — lower than its pre-pandemic baseline — from record highs of around 12% just two years earlier, according to BLS data.
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The reason for shelter’s glacial pace in CPI data is largely a function of how the federal government constructs its housing inflation index, economists said.
The government’s methodology means changes in shelter CPI readings are delayed relative to those in the current rental market.
“We’ve found now that there are big lags,” Federal Reserve Chair Jerome Powell said in June. It may take “several years” for the shelter CPI readings to reflect recent dynamics in the rental market, he added.
“When the Federal Reserve is looking [at] what’s happening with inflation, they are very well aware of this concern of this shelter delay and take that into consideration when they’re making decisions about what to do regarding inflation,” said Selma Hepp, chief economist at CoreLogic.

How the CPI reflects homeownership

The shelter inflation index is meant to measure the average cost of housing in the U.S. economy, J.P. Morgan’s Seydl said. Its two main components are rent and “owners’ equivalent rent of residences.”
Assessing changes in spending for renters, who pay a monthly rent to their landlords, is straightforward.
But most Americans are homeowners. For them, the calculus is more challenging: The BLS considers owned housing units as investments, not goods that are consumed.

[Shelter] has moved in the right direction. It’s just moving much, much slower than anyone really expected.

Olivia Cross
North America economist at Capital Econoics

Regular costs incurred by homeowners — like a mortgage, property taxes, real estate fees, most maintenance and all improvement costs — are treated as “capital” costs rather than consumption. They don’t fit neatly into the CPI basket, which measures changes in the prices of goods and services that Americans consume.
“When it comes to the CPI, [shelter] does not mean the cost for homes for purchase,” said the NAR’s Lautz.
The BLS uses the “owners’ equivalent rent” (OER) category to put homeowners on a level playing field with renters. It measures the “value a homeowner could have received by renting out the good (i.e., the home) rather than using it themselves,” according to the BLS.
The BLS has used this framework since 1987, the agency said.
Imputing a rental value to owned homes is something “many countries around the world do” when gauging inflation, Powell said in June.

How the BLS constructs the shelter index

Because rents generally don’t change from month to month, the government constructs its CPI shelter index by sampling a “staggered panel” of renters and homeowners, Seydl said.
It splits the sample into six groups, and surveys each on a staggered basis every six months. For example, House A is polled in January and July, House B in February and August, and so on. It aggregates price changes into its overall shelter index.

The index moves slowly and with a lag due to the staggered nature of the data, economists said.
“What we’re seeing in the CPI data has already happened in the nine to 12 months prior,” said CoreLogic’s Hepp.
Shelter inflation should continue to moderate as it catches up to the trend in new rental contracts and, broadly, as more rental units become available, experts say.
“We’ll continue to see slowing or deceleration in the rent component,” Hepp said.
Rental prices increased during the pandemic because demand outpaced supply, which caused rental prices to surge, she said.
“One of the reasons rent growth has slowed is because there is more building of multifamily units,” Lautz said. “It’s meeting more of the demand that was really tight.”

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The land below many U.S. cities is sinking, including New Orleans, New York City, Miami and south San Francisco.
This phenomenon, known as land subsidence, can severely affect the integrity of buildings and infrastructure. When coupled with a sea-level rise, it can greatly increase the incidence of flooding.

Problems associated with land subsidence can cost U.S. homeowners 6% of their home value. In areas with high subsidence, that number can jump to 8.1%, according to forthcoming research done by assistant professor of public policy Mehdi Nemati at the University of California, Riverside, and his colleagues. Their research focused on the Central Valley of California, but Nemati said the findings could be extrapolated nationwide.
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Standard homeowners insurance usually does not cover land subsidence issues, according to Policygenius, although in some areas, you may be able to purchase specific coverage for subsidence caused by nearby mines or mining activity.
Consumers are likely to see the effect of land subsidence directly, in the form of problems with their home, and indirectly, in the form of issues for their local economy.

What causes land subsidence

Both natural and man-made processes cause land subsidence.

As glaciers are receding from the land in the U.S. and Canada, the process creates a “see-saw” effect where the land in the U.S. falls but rises in Canada, researchers say.
Manoochehr Shirzaei, a professor of geophysics and remote sensing at Virginia Tech, also attributed some land subsidence to tectonic processes.
“For example, earthquakes can make the land rise, but also in some places [make it] fall. So these two are considered to be natural processes,” he said.
Human-induced land subsidence relates to how we have developed our cities, namely groundwater extraction and building practices.
“We use groundwater to drink and for other purposes. And as we take water out from the land, the space beneath it becomes compact because we’ve built on top of it,” said Rob Freudenberg, vice president of energy and environment at the Regional Plan Association. Heavy building materials also compact the land, putting infrastructure at risk.

When designed, most infrastructure does not account for shifting land. This can be dangerous, experts say.
“If you think of something like a rail line and the rail lines running across ground that’s sinking, some of that will sink, some of it will not,” Freudenberg said. “So now you might have kind of erosion beneath the track where you didn’t have it before. You might have to realign the tracks.”
Watch the video above to learn more about how land subsidence is putting U.S. infrastructure in a precarious situation and how much it could cost to fix it. More

The share of people with medical debt in collections that shows up in their credit reports has fallen in the past decade, according to the Urban Institute.
Yet the median medical debt in collections increased in that time.
New efforts, including medical debt forgiveness, may help reduce the burden of high health-care costs.

Getty Images

The share of people with medical debt in collections that shows up in their credit reports has fallen in the past decade.
Yet unpaid balances due to health-care costs continue to burden individuals and families.

In 2013, 19.5% of Americans had medical debt in collections, while 10 years later, in 2023, that share fell to 5%, according to new research by the Urban Institute. The change is largely due to efforts by the major credit bureaus in 2022 and 2023 that removed paid medical debts from credit reports and delayed reporting of unpaid debts.
Yet the median medical debt in collections increased in that time, to $1,493 in 2023 from $842 in 2013, the Washington, D.C.-based think tank found.
“Consumers had previously had medical debt in collections on their files; since then, their credit scores have increased significantly,” said Breno Braga, principal research associate at the Urban Institute.
That can make it easier for debtors to access other types of credit, apply for jobs or rent housing, he said.

The states where consumers saw the biggest reductions in medical debt in collections from 2021 to 2023 were concentrated in the South, according to the Urban Institute. West Virginia saw its share of residents with medical debt in collections go from 25.8% to 6.7%; South Carolina went from 24.4% to 9.1%; Oklahoma went from 23.7% to 10.1%; Louisiana dropped from 21.3% to 8.1%; and Mississippi dropped from 18.5% to 6.1%.

Colorado had no medical debt in collections in 2023 after it banned credit bureaus from including medical debt on credit reports. Other states with the lowest levels of medical debt in collections in 2023 included Minnesota, with 0.7%; Hawaii, 1.2%; Vermont, 1.2%; and Washington, 1.4%, according to the Urban Institute.

‘Lots of people can’t afford health care’

The Consumer Financial Protection Bureau in June proposed banning medical bills from credit reports. The independent government agency estimates the rule would remove up to $49 billion in medical debts from credit reports.
“There’s an increasing recognition that most people have health insurance, but lots of people can’t afford health care,” said Matthew Rae, associate director of the Health Care Marketplace Program at KFF, a nonprofit organization that provides health policy research. “We’ve got to think about affordability differently.”
While efforts to erase medical debts from credit reports will help debtors, it isn’t the heart of the issue, according to Rae.
Recent KFF research found people who carry medical debt are more likely to be financially vulnerable in other ways compared with adults who do not carry those unpaid balances.
Of adults with medical debt, 72% reported carrying a credit card balance, 68% had no rainy-day fund, and 58% said they were just getting by financially, according to KFF’s analysis of 2021 data.
In comparison, just 37% of adults with no medical debt said they carry a credit card balance, while 37% had no rainy-day fund, and 28% said they were just getting by.

A protestor at the 2022 March for Medicare for All in Washington, D.C.
Probal Rashid | Lightrocket | Getty Images

Adults with medical debt were also more likely to overdraw their checking accounts, to have been contacted by a debt collection agency, to use a pawn shop or to use a short-term payday loan one or more times, KFF’s research found.
“We find that people who have medical debt end up fighting all sorts of other debt,” Rae said.
However, it’s unclear where the problem starts — if people with, say, credit card debt are more likely to go into medical debt or vice versa, he said.
Medical debt is “absolutely” a cause of bankruptcy, Rae said, especially when the high debts are combined with an inability to work.

About $7 billion in medical debt to be canceled

Certain states, cities and counties are canceling about $7 billion in medical debt through the American Rescue Plan Act, federal legislation that was enacted in 2021.
The move will cancel medical debt for up to 3 million Americans, the White House estimated in June.
“Today, I am issuing a call to states, cities, hospitals across our nation to join us in forgiving medical debt,” Vice President Kamala Harris said during a June press call.

Vice President Kamala Harris delivers remarks on medical debt relief at an event at the Eisenhower Executive Office Building, in Washington, D.C., April 11, 2022.
Stefani Reynolds | AFP | Getty Images

The move is politically popular, according to a recent study from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research.
More than half of adults — 51% — said it is extremely or very important for medical debt to be forgiven, versus just 39% who said the same for student loan debt, the groups’ May poll found.
For debtors who are currently struggling with balances, there are some steps they may take to try to get financial relief, according to Rae.
With network providers, you “absolutely should” try to negotiate and don’t take the first number, Rae said. There may be less room to reduce a bill if you’re on a high-deductible plan or have a high co-pay.
Prescriptions are also an area where patients tend to face burdensome costs, Rae said. It’s wise to shop around to find the best price a pharmacy or mail order plan can provide, he said. More