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The Biden administration is still taking steps to deliver sweeping student loan forgiveness to millions of Americans.
The final rule for the so-called “Plan B” for student loan cancellation has been submitted to the Office of Management and Budget for review.
“OMB review is the last step,” said higher education expert Mark Kantrowitz, before the policy is published in the Federal Register.

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

With weeks to go before President-elect Donald Trump takes office, the Biden administration is still taking steps to deliver sweeping student loan forgiveness to millions of Americans.
The U.S. Department of Education has submitted its so-called “Plan B” for student loan cancellation to the Office of Management and Budget for review.

“OMB review is the last step” before the policy is published in the Federal Register, said higher education expert Mark Kantrowitz.
Once the rule is published, the Education Department could begin reducing or eliminating people’s loans, Kantrowitz said.
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President Joe Biden began working on his revised student loan relief plan after the Supreme Court blocked its first program in June 2023. The updated policy targets several groups of borrowers for relief, including those who have been in repayment for decades or attended schools that defrauded them.
“The Biden administration continues to seek student debt relief even in the waning days of his tenure as president,” Kantrowitz said.

The Education Department may also try, in the last month under Biden, to clear the loans of those experiencing financial hardship through a second rule also under OMB review, experts say.
That loan cancellation could reach borrowers “with persistent financial burdens that prevent them from repaying their student loans” and for whom the department’s existing aid options don’t fully help, an Education Department spokesperson said earlier this year.
Biden has already forgiven more student debt than any other president, affecting nearly 5 million people. But Republican-led legal challenges have stymied all of Biden’s attempts at delivering wide-scale relief.
His last efforts could face the same fate. Consumer advocates expect new lawsuits to seek an immediate injunction against Biden’s latest forgiveness plans as soon as they are published in the Federal Register.
A spokesperson for the U.S. Department of Education declined to comment.

Even so, consumer advocates and lawmakers are urging Biden to do everything he can to deliver relief to student loan borrowers before the Trump administration takes over.
Trump and Vice President-elect JD Vance are vocal critics of student loan forgiveness.
Meanwhile, just 15% of Republicans find student loan forgiveness important, compared with 58% of Democrats, according to a national poll from mid-May by the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research.
“Time is running out, and what Biden doesn’t do in the next four weeks will mean tens of millions of working people suffer for four years,” said Braxton Brewington, spokesperson for the Debt Collective, a union of debtors.
On Dec. 4, dozens of lawmakers, including Sen. Bernie Sanders, I-Vt., and Ed Markey, D-Mass., wrote a letter to Education Secretary Miguel Cardona, urging the Department of Education to forgive the debt of borrowers who have applied for relief after being defrauded by their colleges.
Among their requests, the lawmakers asked the Education Department to process the pending borrower defense applications of an estimated 400,000 borrowers. Borrowers can be eligible for that discharge if their schools suddenly closed or they were cheated by their colleges.
“Under the previous Trump Administration, borrowers’ applications were allowed to languish for years,” the lawmakers detailed in their letter. “If their application was reviewed, borrowers often were denied and granted no relief.” More

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Nvidia shares slumped on Monday, putting the AI chip darling officially in correction territory even as the rest of the Nasdaq Composite rose to a record.
The chipmaker and de facto artificial intelligence trade has rallied 166% this year amid ongoing excitement for the buzzy technology trend. However, shares have faced a sluggish stretch as of late.

The stock is down 4.5% in December and officially in correction territory, sitting about 11% off its closing high of $148.88 reached last month. The definition of what comprises a market correction can vary. Many generally regard it as a drop of 10% or more from an all-time high close.
The stock closed down 1.7%.
“You need Nvidia, and you need their chips for infrastructure,” said Keith Lerner, co-chief investment officer at Truist. “But I think what the market’s also saying is that there are other beneficiaries beyond that. There’s a rotation within the Magnificent Seven, which we’ve seen a couple times this year already.”

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Nvidia shares on Monday

The recent underperformance in Nvidia could signal some profit-taking on Wall Street after another marquee year. The maker of graphics processing units underpinning large language models has benefited, as data center demand has swollen since ChatGPT’s late-2022 launch.
But there are some reasons for concern for the market leader and fundamental player among the three major averages. The market has continued powering to new highs as Nvidia underperforms. That could be a warning signal if the pattern continues, with Roth MKM noting that the $125 to $130 level marks a key test for the stock and the overall market.

As Nvidia struggles, other chipmaking stocks have fared well, with Broadcom powering to new highs Monday. The stock surged around 11% during Monday’s session, building on a 24% rally from Friday that pushed the stock above a $1 trillion market capitalization following a strong earnings report.
The Nasdaq Composite hit a record in trading Monday without Nvidia’s help.
“Broadcom’s comments last week probably drove momentum investors to start looking there for even faster growth,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. “Momentum has been driving this stock. I don’t think momentum is going to kill it quite yet, but momentum does what momentum does, which is it seeks the higher flyer.”
Other semiconductor stocks also rallied Monday, with Micron Technology jumping about 6% ahead of its quarterly results this week. Marvell Technology and Lam Research gained 3% and 2%, respectively, while On Semiconductor and Taiwan Semiconductor added around 1% each. More

There is still time to slash your tax bill or boost your refund for 2024, according to financial advisors.
It may be difficult to find assets for tax-loss harvesting or to boost pretax 401(k) employee deferrals.
But you can contribute to your health savings account, make pretax individual retirement account contributions or donate profitable assets to charity.

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As year-end approaches, there’s still time to slash your 2024 tax bill or boost your refund, financial advisors say.  
Typically, you can expect a tax refund when you overpay taxes throughout the year. Alternatively, you get a tax bill when you haven’t paid enough.

Most 2024 tax strategies must be completed by Dec. 31, so there’s limited time to make last-minute moves. 
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After a strong year for the stock market, many investors won’t have tax-loss harvesting opportunities, which can turn portfolio losses into tax breaks.
It could also be too late to boost pretax 401(k) employee deferrals for 2024, which reduces your adjusted gross income.
But there are some key strategies still available, according to financial advisors.

Leverage tax-free ‘compound interest’

If you have a high-deductible health plan, you can funnel money into a health savings account, or HSA, which offers an upfront tax deduction, among other benefits, experts say. 
For 2024, the HSA contribution limit is $4,150 for self-only coverage or $8,300 for family plans. The invested balance grows free of federal taxes and you can withdraw the money tax-free for qualified medical expenses.

You have until the tax deadline to make 2024 HSA deposits, but if you’re investing the balance, starting sooner gives you more time in the market. “You don’t have to wait,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.     
“Get it invested and let the compound interest work for you,” he said.
You also have until the tax deadline for 2024 pretax individual retirement account contributions. But the deduction depends on your filing status, income and workplace retirement plan, so it’s better to wait until you’ve run tax projections for 2024, Lucas said.

Donate profitable assets for a ‘double tax advantage’

When filing your taxes, you take the standard deduction or total itemized deductions, whichever is larger. If you expect to itemize for 2024, you can score a tax break for donations to charity.
Gifting profitable assets offers a “double tax advantage,” because you get a tax break and bypass capital gains taxes, said certified financial planner Rick Nott, managing director at Angeles Wealth Management in Santa Monica, California.
There’s growing interest in the strategy among cryptocurrency investors, with record gains for digital assets such as bitcoin over the past year.
Typically, you can deduct the market value of the investment, as long as you’ve owned it for more than one year. You can claim a deduction capped at 30% of adjusted gross income for public charities. More

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Drone stocks rallied Monday as retail interest ramped up in the sector following a Palantir partnership with Red Cat Holdings and amid a flurry of mysterious sightings in New Jersey and other Northeast states that Wall Street believes could boost funding for the industry.
Red Cat shares rallied 27% on news that it’s working with Palantir to integrate visual navigation software into its drones. The ticker RCAT has been the sixth-most-popular mention on Reddit’s famed WallStreetBets page over the last 24 hours, behind only crypto play MicroStrategy, Nvidia, Tesla, Palantir and SPY (SPDR S&P 500 ETF Trust), according to data tracking firm Quiver Quantitative. RCAT’s popularity on WSB has surged more than 1,625% in the past 24 hours, the firm said.

Donald Trump Jr.-affiliated Unusual Machines was another big winner Monday, surging about 16%. Kratos Defense and Security Solutions added about 5%. Aerovironment gained 8%.
The partnership news comes as recent sightings across the Northeast have reignited interest in the sector, while also fueling national security concerns. FBI officials on Thursday said there was “no evidence” that the drones jeopardize “national security and public safety.” Officials also said Saturday that many of the sightings are “manned aircraft being misidentified as drones.”
Many on Wall Street view the incoming White House administration as a potential boon that could boost funding for the sector and U.S.-made drones. Tesla CEO Elon Musk has spoken favorably of drone technology and is poised to play an influential role in President-elect Donald Trump’s White House.
“On the drone protection side, federal government counter-drone technologies are increasingly being used by local and state law enforcement to protect stadiums, airports, prisons, and other public settings,” said William Blair analyst Louie DiPalma in a note to clients. “This will likely result in a surge in counter-drone investments by local and state government agencies over the next decade.”
Investors have also come to view ties to the sector through Trump Jr.’s connection to Unusual Machines as another potential tailwind for the industry. The eldest son of the president-elect joined the advisory board of the company in November.

Congress has also taken interest in the sector. The National Defense Bill, recently passed in the House, is also drawing interest. If the bill is passed by the Senate and signed into law, China-based DJI would be barred from selling new drones to the U.S.
— CNBC’s Yun Li contributed reporting. More

Overall, households are feeling more optimistic about their financial future.
Some are already making strides to better their standing: 47% have paid off their debts, 39% established an emergency fund and 32% started saving for retirement, a recent report found.

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As the Federal Reserve prepares to lower interest rates once again at the end of its two-day meeting this week, Americans’ assessments of the future are improving.
Although a prolonged period of high inflation took a toll on household budgets, consumers are feeling increasingly optimistic about their financial situation, according to a new report by the New York Federal Reserve.

The share of households expecting their financial situation to be better a year from now jumped to 37.6% in November, the highest since February 2020, just before the Covid-19 pandemic’s effects hit. 
The Conference Board’s consumer confidence index also rose in November, to the highest level since July 2023.
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In recent months, other studies show Americans have been making progress toward key financial goals, from building up savings to paying down debt.
Nearly half of Americans, or 47%, have paid off debt, while 39% established an emergency fund and 32% have saved for retirement, according to a separate survey by Empower, which polled more than 1,000 adults in September.

Roughly 60% of Americans feel confident about reaching their financial goals, Empower also found.

Optimism is high

“Optimism has certainly increased in recent weeks,” said Greg McBride, chief financial analyst at Bankrate.com.
Nearly half, or 44%, of Americans believe their personal financial situation will get better in 2025, including 14% who said it will get significantly better, according to another Bankrate poll of nearly 2,500 adults in November.
Overall, most people have jobs and are taking home more pay. Average hourly earnings are up 1.3% from a year ago, according to the Bureau of Labor Statistics, and the unemployment rate remains low at 4.2%.  
“That’s where the ability to pay down debt comes from,” McBride said.

The ‘vibecession’ is over

“The economy as a whole has fared far better in 2024 than the consensus expected, and we have seen inflation come down and consumer spending remain strong — not withstanding a bit of a ‘vibecession’ in the beginning of the year,” said Brett House, economics professor at Columbia Business School.
The so-called vibecession was often used to describe a disconnect between how well the economy was doing and how badly people felt about their financial standing. That appears no longer the case, according to House.
Despite earlier expectations of a recession, the U.S. has dodged a downturn, House said.
Meanwhile, “the stock market has charged ahead, people are feeling positive wealth effects and interest rates are coming down,” he said.

Perhaps most importantly, inflation has cooled considerably since hitting a 40-year high in mid-2022. 
“People look most closely at the one economic data point they see every day and that is prices at the grocery store,” House said.
Food costs still rose 0.4% in November and 2.4% year over year, but within that group, cereals and bakery products fell 1.1% in November, the single-biggest monthly decline in the consumer price index’s history going back to 1989, according to the BLS.
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If you have a flexible spending account, you may be subject to a Dec. 31 deadline to use those funds.
Here’s what to know about using your 2024 balance and how to get an earlier start in 2025.

Tom Werner | Digitalvision | Getty Images

If you have a flexible spending account, you could be facing a use-it-or-lose-it deadline to spend down those funds before the end of the year.
Flexible spending accounts, or FSAs, allow workers to set aside pre-tax money to pay for qualified medical or dependent care expenses.

They are not to be confused with health savings accounts, or HSAs, which are paired with high-deductible health plans and don’t come with spending reimbursement deadlines.
About 70% of FSA account holders have a Dec. 31 deadline to spend their funds, according to FSA Store, an online retailer for FSA-eligible products.
For FSA balance holders who still haven’t fully used their funds for 2024, it’s a great time to check with your plan or human resources department to see whether the Dec. 31 deadline applies to you, said Rachel Rouleau, chief compliance officer at FSA Store.
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For some FSAs, a grace period may provide up to two and a half months after the end of the plan year — or until March 15, 2025 — to spend down the funds, Rouleau said. Other plans may instead allow for a carryover of up to $640 from their FSA balance from this year into 2025.

However, it’s important to note that for many other FSA account holders, neither of those options apply, Rouleau said.
If that’s the case, “you really want to make sure you’re tracking to Dec. 31 and spending down your funds appropriately before that date,” Rouleau said.
In 2024, participating employees could put up to $3,200 in a health care FSA account.
Households with FSAs put an average of $2,250 into their accounts annually, according to Numerator, a provider of market research data. That includes $1,820 from personal contributions and $430 from employers.

How to make the most of your FSA funds

Most FSA holders use their accounts for dental and vision care, with 67%; as well as prescription medications, 65%; and medical services and procedures, 64%; according to Numerator.
Many plans offer run-out periods, where FSA account holders can submit for reimbursement up to three months after the end of the plan year, according to Rouleau. In that case, whether you submit for reimbursement now or later, the funds still must be spent by Dec. 31.
Many over-the-counter items, such as acne treatments, pain relievers like Tylenol or allergy medicines like Claritin are FSA eligible, Rouleau said.

However, not all health care items or services are necessarily eligible for FSA reimbursement.
Nicole DeRosa, a certified public accountant and director of tax at SKC & Co. CPAs in Boonton Township, New Jersey, said she refers her clients to IRS Publication 502 to check to see whether certain expenses qualify.
Medical expenses that qualify for FSA reimbursement generally also qualify for the medical and dental expenses deduction, according to the IRS.
“There’s a lot of expenses that people might not think are eligible that are eligible,” DeRosa said.
For example, for service dogs, their veterinary, food and grooming expenses are covered, she said. Notably, the same does not apply for emotional support animals.
Generally, weight loss programs and cosmetic procedures are not eligible expenses, unless a doctor prescribes them to help treat a medical condition, DeRosa said.

Don’t wait to spend 2025 FSA funds

As the calendar turns to the new year, you don’t have to wait to spend your new FSA balance for 2025.
“You don’t have to wait for each paycheck or to accrue a balance,” DeRosa said. “You can be proactive, and you can start spending it all right away.” More

The billionaire investor and founder of the Japanese tech-investing firm will also promise in the joint announcement with Trump to create 100,000 jobs focused on artificial intelligence and related infrastructure, the sources said.
The funding could come from various sources controlled by Softbank, including the Vision Fund, capital projects or chipmaker Arm Holdings, where the firm is majority owner.

President-elect Donald Trump and SoftBank Group Corp. founder and Chief Executive Officer Masayoshi Son speak to the media in the lobby of Trump Tower on December 6, 2016 in New York.
Eduardo Munoz Alvarez | AFP | Getty Images

Softbank CEO Masayoshi Son will announce a $100 billion investment in the U.S. over the next four years during a Monday visit to President-elect Donald Trump’s residence Mar-a-Lago in Palm Beach, Florida, sources familiar with the matter told CNBC’s Sara Eisen.
The billionaire investor and founder of the Japanese tech-investing firm will also promise in the joint announcement with Trump to create 100,000 jobs focused on artificial intelligence and related infrastructure, the sources said. The money will be deployed before the end of Trump’s term.

The funding could come from various sources controlled by Softbank, including the Vision Fund, capital projects or chipmaker Arm Holdings, where the firm is majority owner. Some of the money will not necessarily be newly raised, but could include some funding already announced such as Softbank’s recent $1.5 billion investment in OpenAI, the tech firm behind chatbot ChatGPT.
Softbank’s Son and Trump made a similar announcement in 2016 after Trump was elected president for the first time, with the Japanese firm agreeing to invest $50 billion in the U.S. with the aim to create 50,000 jobs. More

Retirees who receive income from public pensions may have their Social Security benefits reduced.
In November, the House of Representatives passed a bill by an overwhelming majority to nix those rules.
Now, the Senate has just days left in this session of Congress to vote on the proposal.

Cavan Images | Cavan | Getty Images

Last month, Congress moved to take rare bipartisan action to change certain Social Security rules.
The House of Representatives on Nov. 12 passed the Social Security Fairness Act by an overwhelming 327 to 75 majority.

The proposal would eliminate rules that reduce Social Security benefits for those who also receive income from public pensions, roughly around 2.8 million people.
For supporters of the bill, that legislative victory has been followed by a suspenseful wait. The Senate must also pass the proposal for it to become law. And the number of legislative days left in this session of Congress are quickly running out.
At a Wednesday rally on Capitol Hill, Senate Majority Leader Chuck Schumer, D-New York, promised to put the bill up for a vote.
“I am here to tell you the Senate is going to take action,” Schumer said, prompting cheers from the crowd including fire fighters, police, postal workers, teachers and other government employees, who stood outside the Capitol building in the rain.
“I got all my Democrats lined up to support it,” said Schumer, adding they need 15 Republicans.

“What’s happening to you is unfair, un-American,” Schumer said. “I will fight it all the way.”
Bette Marafino, an 86-year-old retired teacher and a member of a national grassroots task force that has pushed to have the rules eliminated, was at the Capitol when the House voted in November.
The vote prompted cheers that turned into tears of joy from the small group of advocates who witnessed it. “We were so happy,” Marafino said.
Now, she is worried what may happen if the Senate does not pass the bill by Dec. 20.
“It’s going to be start all over again, and we’ll need to have some champions,” Marafino said, now that Reps. Garret Graves, R-La., and Abigail Spanberger, D-Va., who co-led the bill, are leaving Congress.
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Prospect of nixing rules prompts fierce debate

Despite the enthusiasm from advocates behind the bill, many experts on both the left and right have said the Social Security Fairness Act is not the best policy.
The rules the bill would eliminate — the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO — were designed to make it so all Social Security beneficiaries received a comparable reimbursement for their contributions to the program.
Social Security is progressive, which means workers with lower lifetime earnings receive higher income replacement rates.
Without the rules, workers who are eligible for Social Security retirement benefits — and who also have income from pensions where they didn’t pay taxes into the program — may receive a higher income replacement than some workers who contributed to the program for their entire careers, experts argue.  
The bill also does not include a way to offset the cost of the benefit increases it includes.
Over 10 years, it would cost around $196 billion, according to the Congressional Budget Office. That’s as the program currently has just nine years before the trust fund it relies on to help pay retirement benefits may be depleted.
“As far as I know, there are no policy experts who support repealing the Windfall Elimination Provision and Government Pension Offset,” said Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center.

The WEP affects about 2.1 million Social Security beneficiaries — or about 3% of all Social Security beneficiaries — who see their retirement or disability benefit checks reduced because they also receive pension benefits from jobs not covered by Social Security.
The GPO affects almost 746,000 individuals — about 1% of all Social Security beneficiaries — by reducing spousal or widow(er) benefits because of pensions from non-covered government employment.
Rather than eliminate the rules altogether, some experts have suggested it would make more sense to replace them with more precise formulas for adjusting benefits.
Yet groups like the International Association of Fire Fighters maintain eliminating the rules altogether is the best policy.
The starting salary for a firefighter in Louisiana is around $40,000, said Edward Kelly, general president of IAFF. To make ends meet, those professionals often take on second or third jobs, where they do pay Social Security payroll taxes. Yet once they become eligible for the program’s benefits, they have that income reduced.
Generally, workers who pay in the same amount as non-public employees can see their monthly benefits reduced by $500 or $600, Kelly said.
“That’s devastating and it’s patently unfair,” Kelly said. “You’re basically being discriminated against for your public service.”

Public workers say Social Security cuts hurt

For many public workers, the reduction of their Social Security benefits comes as a surprise.
Roger Boudreau, a 75-year-old former teacher who is on the executive board of the Alliance for Retired Americans, regularly received Social Security’s annual benefit statements with estimates of how much monthly income he may expect.
However, those disclosures did not include any information on the WEP or GPO penalties, he said.
Boudreau didn’t realize how much his monthly checks would be reduced until he went to sign up for his Social Security benefits 10 years ago.
It was a shock to find out his Social Security benefits would be cut by 40%, Boudreau said. He estimates has resulted in a loss of about $5,000 per year over the past decade.
Other public workers are forced to delay their retirements because of the way the rules affect them, according to Lois Carson, 64, president of the Ohio Association of Public School Employees, an affiliate of the American Federation of State, County & Municipal Employees.

Carson, who has been a Columbus City School employee for about 37 years, has delayed her own retirement since the rules limit the Social Security survivor benefits she would receive while collecting a pension.
“Most women work longer, because they can draw their husband’s Social Security while they’re working,” Carson said. “But once they retire, it drops down to a third.”
If the bill is not passed, most of the 30,000 members she represents will go way beyond their 30 years of employment, she said.
Advocacy groups have been working tirelessly to get lawmakers to move the bill.
Since the proposal passed in the House in November, Kelly said the firefighters alone have sent around 29,000 emails urging Senate leaders to pass the bill.
The stakes are high, experts say.
The initiative must compete with the Senate’s other legislative priorities. If the bill doesn’t get passed in this Congress, it dies, Kelly said.
With 62 Senate co-sponsors, the bill has a strong chance of passing once it is brought up for a vote.
“If it gets to a final vote under standard Senate procedure, I don’t see a whole lot of opportunity for it to fail,” Sprick said. “The question is whether it gets to that final vote.” More