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It is common folklore, a fairy tale of sorts, that middle-class Americans received perpetual relief in the Tax Cuts and Jobs Act of 2017.
If a divided Congress fails to make amendments, the old tax brackets will return after years of wage growth — which means more of your income may hit the older and more onerous brackets sooner.
It is currently unclear if other provisions cut in the TCJA will be returned to taxpayers.

Eva-katalin | E+ | Getty Images

It is common folklore, a fairy tale of sorts, that middle-class Americans received perpetual relief in the Tax Cuts and Jobs Act of 2017.
First, property taxes generate 32% of state and local income, and U.S. median single-family home property taxes have risen by more than 25% since 2019. There are also under-the-radar excise taxes imposed on the sale of things like fuel, airline tickets, tires, tobacco and other goods and services that can mitigate some of the savings from many of the federal tax cuts that are temporary and may disappear after 2025.

The devil is usually in the details, and by all accounts he’s been busy.
The provision that reduced the corporate tax rates to 21% is permanent, but the qualified business income deduction enjoyed by many small businesses, as well as the increased standard deduction and favorable tax brackets, will expire unless Congress extends these deliverables.

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Capitol Hill might very well grandfather in these tax cuts, although it’s worth noting that doing so would cost $288 billion in 2026 alone, according to the Institute on Taxation and Economic Policy and $2.7 trillion from 2024 to 2033, per the Peter G. Peterson Foundation.
Meanwhile, Uncle Sam already has his own money problems, slated to have 31% of the debt held by the public, or $7.6 trillion, coming due in 2024 at much higher rates. To add context, the United States will spend more on interest payments than it does on the military this year.
Congress will be motivated to etch all the tax cuts in stone, but it would only add fuel to the debt bonfire.

What tax changes may be on the horizon

If a divided Congress fails to make amendments, the old tax brackets will return after years of wage growth — which means more of your income may hit the older and more onerous brackets sooner.
There is also the once-unlimited state and local tax deduction that the legislation capped at $10,000, the personal exemption which was eliminated, the deduction for unreimbursed business expenses, a deduction for moving, interest on a home equity loan, a deduction for uniforms and a deduction for theft and catastrophic damage from an environmental event that are no longer available. It is currently unclear if these provisions will be returned to taxpayers.

There is also the qualified business income deduction that offers a 20% tax break for small businesses provided they are below certain income thresholds. That deduction is set to expire, a concern that has motivated the Chamber of Commerce to lobby on behalf of its constituents. All of this is in addition to crippling cost-of-living challenges from excessive government spending, the well our Treasury would have to revisit to make these tax cuts permanent.

Hope Congress fixes the problem, or look for a solution

The easiest course of action for everyday Americans is to increase contributions to their pretax retirement plans such as a 401(k), which will reduce federal and state tax exposure dollar for dollar. Once distributions are taken, however, they will be subject to regular income taxes at a time when entitlement expenses have accelerated, and the Treasury will have fewer workers paying for more retirees.
A Roth 401(k) plan may protect against future taxes but does little for current exposure and is subject to legislative risk by both the federal and state governments saddled with unfunded liabilities and pension obligations. While political obstacles make this an unlikely outcome, the math may force officials to write legislation that taxes distributions through means testing or another measure that suits their fiscal needs.

Real estate offers some reprieves because you may be able to depreciate the property over its lifetime. For instance, the IRS allows property owners to deduct 3.64% of the original purchase price for 27 years. A property purchased for $500,000, therefore, offers an estimated $18,200 annual deduction to offset any income received.
Interest rates have made real estate much less attractive. But it’s worth noting that upon the owner’s death, whatever the property value is at the time of death becomes the new cost basis — the value used to determine how much the owner can depreciate — and the beneficiaries can begin depreciating all over again at the higher value for another 27 years.
Another option is permanent life insurance. The media and financial literacy pundits have spent years highlighting the high commissions and fees associated with whole and universal life insurance policies.
Upon closer inspection, however, these vehicles offer more than a death benefit with no exposure to income taxes and have a savings component that can grow tax-deferred with the market.
Moreover, the policy owner can borrow money against the savings component of the policy, known as the cash surrender value, pay zero taxes and repay the loan with the death benefit when they pass away. Think of it as a Roth individual retirement account without income or contribution limits that pays a death benefit when you die.

Suffice it to say these solutions are viable for some people, yet each household needs a strategy that fits their own unique situation. As appealing as it may sound to reduce your tax exposure, the first call should be to your tax advisor because if you recall, it was the nuances of this legislation that many of us overlooked — namely the fact that the benefits for some were permanent and for others, temporary — that got us into this hot water in the first place.
— By Ivory Johnson, certified financial planner and the founder of Delancey Wealth Management in Washington, D.C. He is also a member of the CNBC Financial Advisor Council. More

President Joe Biden rolled out the details of his Plan B for student loan forgiveness less than a year after the Supreme Court struck down his first attempt at delivering wide-scale education debt relief.
Here’s how the do-over program differs from Biden’s last aid package.

President Joe Biden delivers remarks on canceling student debt on February 21, 2024 in Culver City, California.
Mario Tama | Getty Images News | Getty Images

A more targeted forgiveness program

This time, the Biden administration has narrowed its aid by targeting specific groups of borrowers. It hopes that move will help the new plan survive legal challenges.
“I think it would be easier to justify in front of a court that is skeptical of broad authority,” said Luke Herrine, an assistant professor of law at the University of Alabama, in an earlier interview with CNBC.
Tens of millions of borrowers may still benefit if the program endures.
The plan would forgive the debt of borrowers who:

Are already eligible for debt cancellation under an existing government program but haven’t yet applied
Have been in repayment for 20 years or longer on their undergraduate loans, or more than 25 years on their graduate loans
Attended schools of questionable value
Are experiencing financial hardship

It’s not entirely clear yet how financial hardship will be defined, but it could include those burdened by medical debt or high child-care expenses, the Biden administration said.
The new plan also calls for borrowers to get up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income.

For critics, deja vu

For critics of broad student loan forgiveness, Biden’s new plan looks a great deal like his first.
After Biden touted his revised relief program, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that the president “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.
Missouri was one of the six Republican-led states — along with Arkansas, Iowa, Kansas, Nebraska and South Carolina — who brought a lawsuit against Biden’s last debt relief effort.
The red states argued that the president overstepped his authority, and that debt cancellation would hurt the bottom lines of lenders. The conservative justices agreed with them.
Once the Biden administration formally releases its new student loan forgiveness plan, more legal challenges are inevitable, said higher education expert Mark Kantrowitz.
“Lawsuits will likely follow within days,” Kantrowitz added.

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A hotter-than-expected consumer inflation reading spooked investors last week, but investors may want to adopt a long-term mindset as they seek buying opportunities.
Top Wall Street analysts are calling out their favorite stocks with a focus on their long-term growth prospects.

To that end, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Amazon
This week’s first pick is e-commerce and cloud computing giant Amazon (AMZN). Ahead of the company’s quarterly results, several analysts have been reaffirming their bullish views on the stock.
Mizuho analyst James Lee reiterated a buy rating on AMZN stock with a price target of $230. The analyst is incrementally optimistic that the revenue of Amazon’s cloud computing unit, Amazon Web Services (AWS), will accelerate in 2024. He stated that AMZN remains his firm’s top pick.
Based on Mizuho’s recently completed quarterly AWS customer survey with a leading channel partner, the analyst made some key observations. He said that there are signs of an accelerating sales cycle, given that AWS customers are seeking more executive business center meetings.
Further, the survey indicated that AWS clients are ending their on-premise data center contracts at a faster pace than previously noted, indicating accelerated migration of workloads into the cloud.

“We see accelerated budget trends as the channel partner that commissioned the survey estimated AWS spending growth of 20% YoY growth, consistent with our forecast, and above consensus at 15%,” noted Lee.
Lee ranks No. 428 among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 59% of the time, with each delivering an average return of 11.5%. (See Amazon Stock Buybacks on TipRanks)  
Acushnet Holdings
We move to golf products maker Acushnet Holdings (GOLF). The company generated net sales of $2.4 billion in 2023, reflecting a 4.9% year-over-year growth. The top line gained from increased sales volumes of golf balls, clubs and golf gear under the company’s Titleist brand. 
Tigress Financial analyst Ivan Feinseth reaffirmed a buy rating on GOLF stock and increased the price target to $74 from $68. The analyst expects the company’s business to be boosted by new players entering the sport, a rise in rounds played and product launches across its industry-leading brands.
Highlighting favorable trends that would benefit Acushnet, Feinseth said that the golf industry has witnessed a continued increase in the number of new golfers over the past six years. Also, total rounds played surged to 950 million in 2023 from 800 million in 2019, with the momentum expected to continue.
“GOLF’s strong brand equity, driven by its best-in-class and industry-leading product lines, including FootJoy and Titleist, are major assets and the primary drivers of its premium market valuation,” said Feinseth.
The analyst also noted that Acushnet continues to boost shareholder returns with dividend hikes and share repurchases. The company recently increased its quarterly dividend by 10.3% and announced an additional share repurchase authorization of $300 million.
Feinseth holds the 243rd position among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 12.4%. (See Acushnet Holdings Hedge Fund Trading Activity on TipRanks) 
BJ’s Wholesale Club
Finally, there is BJ’s Wholesale Club (BJ), a membership-only warehouse club chain. Goldman Sachs analyst Kate McShane upgraded BJ stock to buy from hold and increased the price target to $87 from $81.The analyst expects increased market share and improving industry trends to drive strong revenue growth.
McShane highlighted that the grocery category accounted for 86% of BJ’s merchandise sales in fiscal 2023. She expects better revenue outlook, given the return of volume growth in the grocery business and enhanced customer engagement in the general merchandise category.
The analyst anticipates that the general merchandise category will gain from the company’s efforts to refresh its assortment by adding new brands and higher quality merchandise as well as implementing initiatives to improve presentation and the timing of deals.
Additionally, McShane expects BJ to benefit from a potential increase in membership fees. The company has a membership base of more than 7 million accounts, backed by an impressive renewal rate of 90% in fiscal 2023.
“Ultimately, BJ is an attractive club model with a compelling value proposition and long runway for new club growth that should continue to gain market share over the long term,” said McShane.
McShane ranks No. 959 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 62% of the time, with each delivering an average return of 5.1%. (See BJ’s Ownership Structure on TipRanks)  More

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The term “allowance” often alludes to money a parent gives to a child. But it sometimes comes up between romantic partners, too.
Most people don’t really intend to create a disparate weight of power and control in their relationship — what they want is guardrails.
A better approach may be to set a check-in number, or a dollar amount both partners are comfortable with each other spending before discussing it together.

Simpleimages | Moment | Getty Images

You don’t have to scroll far to find the #tradwives and #SAHGs (stay-at-home girlfriends) of social media who glamorize the extremes of domesticity, or the wives in Dubai who film their extravagant errands, such as picking up a Cartier bracelet and stopping for a facial on the way home.
At all ends of the wealth spectrum, there’s a common thread tying these women together: permission. Someone, usually a man, is giving it to them.

The term “allowance” should make you think of money a parent gives to a child. Yet, it arises in the financial arrangements of these partnerships, too. The allusion is right in our faces, infantilizing women by placing their freedom to spend under the thumb of their partner’s permission.
Most financial experts and professionals cringe at the concept, and it should come as no surprise that the topic has been covered far and wide.

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But there’s also the fact that social media’s going to social media — so much is put on for show. The most extreme content often receives the most attention, leaving open the question of how real and commonplace “allowances” actually are among couples.
Do people really operate like this?
Until recently, we thought, no. But turns out, we were wrong.

While interviewing couples for our forthcoming book on love and money, a few have used that word. Typically, the dynamic involves a male partner who earns an income and a female who cares for their children at home.
Hearing it via Zoom during real conversations about real people’s money felt worse than the sensationalized snippets on TikTok. The sense of permission took on a broader meaning with dual negative implications: These women need permission from their partners to spend money, and they have permission to not engage around the important decisions in their financial lives as a couple.
It’s disappointing, for sure, but we think there’s something to salvage beneath the surface.

Why ‘allowance’ is a problematic term

Most people who adopt this antiquated terminology don’t really intend to create a disparate weight of power and control in their relationship — at least that’s what we’ve observed.
What they actually want is to feel safe knowing that guardrails exist.
They are not trying to remove anyone’s sense of agency. They just want to know their partner is not heading to Cartier for a bracelet and stopping for a facial on the way home (figuratively speaking, of course). However, they might also be a bit lazy for embracing the easiest word, one already familiar to them from their own lives and the lives we observe online. 
Just because it’s easy doesn’t make it right. There’s harm in “allowances,” which perpetuate gender-based stereotypes and widen the wealth gap and knowledge gap around personal finance.  

What’s worse, they diminish the work being done at home. We do a terrible job as a society of assigning value to a spouse’s nonmonetary contributions, and they are just as crucial to maintaining household stability as the income flowing in.
Not to mention, restricting funds for the person who likely purchases most of the household’s needs adds a whole other layer of strain when their partner has a different viewpoint of what’s considered a “want” versus a “need.” This is a setup for constant conflict and a relationship dynamic that’s just plain unfair.
There’s an element of trust at play, too. Creating one-sided restrictions around spending can easily lead to lies. The leading method of financial infidelity among couples, 30%, is spending more than your partner would be okay with, according to a Bankrate survey.

Set a ‘check-in number’ instead

Mtstock Studio | E+ | Getty Images

A better way to build trust while establishing reasonable guardrails around spending isn’t through permission, but through communication. Couples can set a check-in number, which is a dollar amount they are both comfortable with each other spending before discussing it together.
There’s no one right number. We’ve spoken to couples who’ve picked $100 and couples who’ve chosen $1,000 based on their personal circumstances and comfort levels.
Consider carefully what the number should be, though. Selecting a number that’s too high could risk running afoul of your budget, which would defeat the purpose. But choosing a number that’s too low could lessen your partner’s agency to spend, which might not reflect the reality of costs to effectively perform his or her responsibilities of everyday life.
For example, setting a check-in number at $50 when your spouse purchases all the home goods, school supplies and clothing for your growing children probably doesn’t make sense. She might even grow resentful if she feels her judgment carries no weight, which, based on the data, can clearly erode trust over time.

But most importantly, the check-in number should be the same for both partners, irrespective of who earns more income.
Our idea of contribution shouldn’t be affixed to a salary and shouldn’t dictate who has more financial freedom. We all contribute in our own ways, and every contribution matters. Your husband shouldn’t be able to buy $2,000 golf clubs while you’ve got to check in for a $110 pair of sneakers. These are inequities that metastasize. They don’t just go away.
Remember, setting a check-in number isn’t an “allowance” by another name. It’s an amount up to which you and your partner are free to spend without having a conversation every time. It replaces permission with communication. It builds a team playing by the same set of rules and fostering an environment of mutual respect.
— By Douglas and Heather Boneparth of The Joint Account, a money newsletter for couples. Douglas is a certified financial planner and the president of Bone Fide Wealth in New York City. Heather, an attorney, is the firm’s director of business and legal affairs. Douglas is also a member of the CNBC Financial Advisor Council. More

An exterior view of the Advance Auto Parts store at the Sunbury Plaza.
Sopa Images | Lightrocket | Getty Images

Company: Advance Auto Parts (AAP)

Business: Advance Auto Parts is an automotive aftermarket parts provider, serving professional installers and do-it-yourself customers. Its stores and branches offer a selection of brand names, original equipment manufacturers and brand-owned automotive replacement parts, accessories, batteries and maintenance items for a range of vehicles. It operates roughly 4,770 stores and 316 branches within the United States, Canada, Puerto Rico and the U.S. Virgin Islands.
Stock Market Value: $4.19B ($70.50 per share)

Activist: Third Point and Saddle Point Management

Percentage Ownership: 8.04% economic exposure
Average Cost: n/a
Activist Commentary: Third Point is a multi-strategy hedge fund founded by Dan Loeb, that will selectively take activist positions. Loeb is one of the true pioneers in the field of shareholder activism and one of a handful of activists who shaped what has become modern-day shareholder activism. He invented the poison-pen letter in a time when a poison pen was often necessary. As times have changed, he has transitioned from the poison pen to the power of the argument. Third Point has amicably gotten board representation at companies like Baxter and Disney, but the firm also will not hesitate to launch a proxy fight if it is being ignored.
Third Point has formed a group in this investment with Saddle Point. This group has a collective economic ownership to 4,781,557 shares (8.04%) of AAP stock, which is a combination of common stock and derivatives, a vast majority of which is owned by Third Point. Saddle Point is an investment firm run by Roy Katzovicz, the former chief legal officer of Pershing Square Capital Management.

What’s happening

On March 11, Third Point and Saddle Point entered into an agreement with Advance Auto Parts, pursuant to which the following three directors were appointed to the board of directors: (i) Tom Seboldt, president of Seboldt Consulting Services and a former executive at O’Reilly Automotive; (ii) Gregory Smith, EVP, global operation and supply chain of Medtronic and former EVP, supply chain of Walmart; and (iii) Brent Windom, former president and CEO of Uni-Select.

Behind the scenes

Third Point and Saddle Point are not the first activists in this stock. Starboard Value had an activist campaign at Advance Auto Parts from September 2015 through May 2020 and exited their investment in the first quarter of 2021 when the stock was trading at approximately $185 per share. In late 2021, the stock peaked around $240 a share, but fell over time to about $120 a share by May 2023. After reporting a significant Q1 of 2023 earnings miss of 72 cents per share, 68% lower than the same quarter in 2022, compared to a consensus estimate of $2.57 per share, the stock price plummeted to $72.89 on May 31, 2023. This is when it really got interesting as an entry point for investors who have been watching the stock.
Advance Auto Parts effectively has two businesses: its core retail auto parts business and Worldpac, the company’s wholesale auto parts distribution business. Worldpac is in a similar line of industry – it distributes automotive parts – but it’s a completely different business with its own supply chain and own distribution network. The first opportunity to create value here is by selling Worldpac. Advance Auto Parts does not separately report Worldpac’s financials, but it is considered by many to be the company’s crown jewel and the sell side estimates its value at approximately $1.5 billion. But with approximately $2 billion in revenue and earnings before interest, taxes, depreciation and amortization margins estimated to be at least high-single digits, Worldpac could fetch at least $2 billion at a conservative 10x multiple. A sale would enable management to sell down debt, immediately stabilize the company’s balance sheet and upgrade its S&P rating of junk debt.
Just as importantly, this would allow management to focus on the core retail business, which trades at a value significantly below its peers. After backing out the Worldpac business at $2 billion, Advance Auto Parts’ 4,770 stores are valued at approximately $1.25 million per store, whereas peers O’Reilly and AutoZone have per store valuations of $11 million and $8 million respectively. While part of this valuation discrepancy is the estimated value of Worldpac and part is the balance sheet issues, the real problem is sales and margins. O’Reilly generates sales of approximately $2.5 million per store versus AAP at $1.8 million. This is not a marketing issue, a pricing issue or a sales personnel issue. Rather, it is a supply chain and stocking issue. There is little, if any, brand loyalty in the auto parts business. Customers go to stores that have the part they need. AAP’s biggest problem has been keeping parts in stock for sale, so customers go elsewhere. Solving this problem would not only increase their revenue closer in line with peers, but it will significantly improve their EBITDA margins. With a 50% gross profit margin, virtually half of every incremental sales dollar goes to the bottom line just by having the parts in stock.
The good news is that Advance Auto Parts has a relatively new CEO who is extremely competent and up for the job. Shane O’Kelly became CEO in September 2023. He has a solid retail background and is a West Point grad with the leadership abilities to manage a team and the discipline to manage costs. The one thing he needs is industry expertise and support at the board level. That is what Third Point and Saddle Point is providing with the recent settlement. On March 11, the two activists settled for board seats for Thomas Seboldt, Gregory Smith, and Brent Windom, all industry executives with a mix of automotive industry and supply chain experience. Seboldt spent most of his career with O’Reilly Automotive. Windom is an experienced automotive industry executive who most recently served as president and CEO of Uni-Select. Smith, is a proven supply chain expert with experience at Medtronic, Walmart and Goodyear. Finding the right directors to support a good CEO is a way many activists, including Third Point, create value for portfolio companies. In fact, when Third Point has received three or more board seats in activist campaigns, it has averaged a return of 49.79% versus 37.77% the S&P 500 over the same periods.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

If you can’t cover your taxes in full, you should still file your return by April 15 and pay what you can, according to the IRS.
You can apply for an IRS payment plan, or “installment agreement,” to pay your balance over time.
While you will still accrue interest and late-payment penalties after April 15, the failure-to-pay penalty is cut in half under an installment agreement.

File your return by April 15 even if you can’t pay

If you can’t cover your taxes in full, you should still file your return by April 15 and pay what you can, according to the IRS.
Here’s why: “Your interest and penalties are compounding quicker” if you owe taxes and don’t file, said Eric Bronnenkant, certified financial planner and head of tax at Betterment, a digital investment adviser. 

The failure-to-file penalty is 5% of your unpaid taxes per month or partial month, capped at 25% of your balance due. By comparison, the late payment penalty, or the failure-to-pay penalty, is 0.5% per month or partial month, with a maximum fee of 25% of unpaid taxes.
The IRS also charges interest based on the current rates.

The IRS has ‘various payment options’

If you still have a tax balance by April 15, you can apply for “various payment options” online and get an “immediate response” of acceptance or denial, the IRS said in a news release on Friday.
IRS online payment plans, or “installment agreements,” include:

Short-term payment plan: This may be available if you owe less than $100,000 including tax, penalties and interest. You have up to 180 days to pay in full.

Long-term payment plan: This may be available if your balance is less than $50,000 including tax, penalties and interest. You must pay monthly, and you have up to 72 months to pay off the balance.

You can apply for either plan online, by phone or by mail by sending Form 9465. However, experts say the online option is quick and easy.

“They’re trying to get people back in the system,” Bronnenkant said.
However, you can’t have multiple payment plans from different tax years.
“They don’t want people on continuous payment plans,” he said.
While you will still accrue interest and late-payment penalties after April 15, the failure-to-pay penalty is “cut in half” under an installment agreement, according to the IRS.
You can learn more about the IRS plans, including setup fees and payment options, here. More

The number of students earning college degrees fell for the second year in a row, according to a report from the National Student Clearinghouse Research Center.
While fewer students completed degrees, more students earned a certificate this year than in any of the last 10 years.

PhotoAlto/Dinoco Greco

College degree earners fall by nearly 3%

For the second year in a row, the number of students earning an undergraduate degree declined, according to a recent report by the National Student Clearinghouse Research Center.
Overall, undergraduate degree earners fell by nearly 3% in the 2022-23 academic year — the steepest decline ever recorded, the report found, while bachelor’s degree earners sank to the lowest level in nearly a decade after notching a one-year loss of almost 100,000 graduates.
Meanwhile, the number of students earning a certificate hit a 10-year high, largely due to the growth in vocational programs.
More from Personal Finance:How to make key college decisions amid FAFSA delaysFAFSA fiasco may cause drop in college enrollment, experts sayThis could be the best year to lobby for more college financial aid

“That number of newly minted college graduates has been shrinking,” said Doug Shapiro, executive director of the National Student Clearinghouse Research Center.
Nationwide, enrollment has lagged since the start of the Covid-19 pandemic, when a significant number of students decided against a four-year degree in favor of joining the workforce or completing a certificate program instead.
High schoolers are putting more emphasis on career training and post-college employment, other reports also show.
Now, fewer students are pursuing a four-year degree and more students are dropping out due to financial constraints, among other factors, Shapiro said.
“Shorter-term certificates have picked up some of the slack, accelerating declines in associate and bachelor’s degree earners mean fewer new college graduates this year,” Shapiro said.

Community college pathway is ‘at risk’ 

Historically, a two-year degree was considered an economical alternative to a bachelor’s, or even a more affordable pathway to a four-year college. These days, the latter is less likely to be the case.
In fact, just 16% of all community college students ultimately attain a bachelor’s degree, according to recent reports by the Community College Research Center at Columbia University, the Aspen Institute College Excellence Program and the National Student Clearinghouse Research Center.
Community college as a stepping stone is “at risk,” Shapiro said, and “that’s very bad news.”
“That escalator… has been one of the most promising, if not always the most successful, paths to access to the bachelor’s degree for lower-income and disadvantaged students,” Shapiro said. “Those students, in particular, will face more challenges.”

FAFSA issues could also hurt enrollment

Ongoing problems with the new Free Application for Federal Student Aid have also discouraged many high school seniors from applying for the financial aid necessary to afford college. Those who opt out are often low-income students who stand to benefit most from financial aid and increasingly feel priced out of a postsecondary education.
The FAFSA serves as the gateway to all federal aid money, including loans, work-study and grants, the latter of which are the most desirable kinds of assistance because they typically do not need to be repaid.
Submitting a FAFSA is also one of the best predictors of whether a high school senior will go on to college, according to the National College Attainment Network. Seniors who complete the FAFSA are 84% more likely to immediately enroll in college. 

As of the latest update, only roughly 7 million 2024-25 FAFSA applications have been submitted and sent to schools, according to the U.S. Department of Education, less than half of the more than 17 million students who use the FAFSA in ordinary years.
Still, it’s too soon to say whether those remaining students will ultimately apply for aid and how that could impact their decisions about college in the fall, according to Sandy Baum, senior fellow at Urban Institute’s Center on Education Data and Policy.
“If students don’t fill it out, some will not go to college,” Baum said.

Arrows pointing outwards

Steadily, college is becoming a path for only those with the means to pay for it, other reports also show.
At the same time, deep cuts in state funding for higher education have pushed more of the costs onto students and paved the way for significant tuition increases.
Higher education already costs more than most families can afford, and costs are still rising, with the sticker price at some colleges now nearing $100,000 a year. 
“Tuition has definitely been going up faster than inflation for decades and incomes have not kept up,” Baum said.
“It’s a serious problem,” she added, but “it’s not a new problem.”

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The Biden administration announced Friday it was forgiving student debt for another 277,000 borrowers.
After the Supreme Court struck down President Joe Biden’s wide-scale debt cancellation plan, the president directed the U.S. Department of Education to examine its existing authority to reduce and eliminate students’ debts.
Mainly by improving current loan relief programs, the department has cleared the education debts of 4.3 million people, totaling $153 billion in aid, while Biden has been in office.

U.S. President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House in Washington, D.C., on Aug. 24, 2022.
Evan Vucci | AP

Here is who benefits from this round of forgiveness

In this round of forgiveness, more than 206,000 borrowers will collectively get $3.6 billion in debt erased through the Biden administration’s new Saving on a Valuable Education, or SAVE, plan, due to the provision that allows for debt forgiveness after shorter periods than other income-driven repayment plans for those who originally took out small amounts for college.
More than 65,000 borrowers will have their loans canceled through fixes to the Department of Education’s income-driven repayment plans, and 4,600 borrowers are benefiting from the improvements to the government’s loan forgiveness program for public servants. Aid for these groups in this round of forgiveness amounts to $3.5 billion and $300 million, respectively.

Biden’s 2020 campaign promise to erase student debt was thwarted at the Supreme Court last June. The conservative justices ruled that Biden’s $400 billion loan cancellation plan was unconstitutional.

After that, the president directed the Department of Education to examine its existing authority to reduce and eliminate students’ debts. Mainly by improving current loan relief programs, the department has cleared the federal education loans of 4.3 million people, totaling $153 billion in aid, while Biden has been in office.

Relief is a result of fixes to federal student loan system

Income-driven repayment plans, which cap a borrower’s monthly bill at a share of their discretionary earnings, are supposed to lead to debt cancellation after a certain period of time. However, loan servicers weren’t always keeping accurate track of borrowers’ payments, advocates say. As a result, few people received the promised relief in the past.
The Biden administration has been reviewing borrowers’ payment timelines and allowing them to get credit for periods that historically didn’t qualify, such as during certain deferments and forbearances.
It also rolled out a new income-driven repayment plan, the SAVE plan, in which borrowers with smaller loan balances can get debt forgiveness after as little as 10 years.
The Education Dept. has been going over the accounts of borrowers pursuing Public Service Loan Forgiveness too, trying to deliver more people relief under the program.
Previously, PSLF was famously complicated and excluded borrowers on technicalities, including their federal loan type, even if they were working a qualifying public service job. The Biden administration has loosened some of these rules.
The president also rolled out his wide-scale student loan forgiveness do-over plan earlier this week. More