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The Biden administration will soon roll a sweeping new student loan forgiveness proposal that could impact millions of Americans.
Despite its smaller scope than President Joe Biden’s first education debt relief plan that the Supreme Court ultimately blocked, this new aid package could still forgive the debt for as many as 10 million Americans, according to one rough estimate.
Borrowers experiencing financial hardship and those who’ve been in repayment for decades may be among the eligible.

U.S. President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library on February 21, 2024 in Culver City, California. 
Mario Tama | Getty Images

A narrower aid package Biden hopes will survive

The president’s Plan B for student loan forgiveness will likely target several groups of borrowers, including those who’ve been in repayment for decades and people who are experiencing financial hardship.
Immediately after the Supreme Court struck down Biden’s $400 billion student loan forgiveness plan last June, his administration began working on a revised assistance package.
The Biden administration believes its updated plan will survive legal challenges this time for several reasons. One, it’s far narrower than its first attempt, which would have impacted as many as 40 million Americans.
“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.

Student debt relief activist rally in front of the U.S. Supreme Court on June 30, 2023 in Washington, DC. The Supreme Court stuck down the Biden administration’s student debt forgiveness program in Biden v. Nebraska.
Kevin Dietsch | Getty Images

It is also using a different law — the Higher Education Act rather than the Heroes Act of 2003 — as its legal justification.
The HEA was signed into law by President Lyndon B. Johnson in 1965, and allows the education secretary some authority to waive or release borrowers’ education debt.
The Heroes Act was passed in the aftermath of the 9/11 terrorist attacks, and grants the president broad power to revise student loan programs during national emergencies.
The conservative justices didn’t buy that argument.
″’Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?'” Chief Justice John Roberts wrote in the majority opinion for Biden v. Nebraska. “We can’t believe the answer would be yes.”
Lastly, the Biden administration has now turned to the rulemaking process to deliver its relief. The president previously attempted to cancel the debt through executive action.

As part of the rulemaking process, a team of negotiators met four times to try to establish the new parameters of the updated policy. The final session concluded in February.
Based on the timeline of regulatory changes, the proposal will likely become public within weeks, Kantrowitz said.
“Typically at the end of the negotiated rulemaking, a month or so later you have publication of the proposal,” he said.
There will then be a public comment period, which is likely to last for at least 30 days.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

Americans are still willing to go into debt to travel, dine out and go to concerts in 2024.
Young adults, especially, are focused on enjoying life in the moment rather than saving for the future, reports show.
It’s partly that “‘you only live once’ mentality that intensified during the pandemic,” one expert says.

Taylor Swift performs onstage for the opening night of “Taylor Swift | The Eras Tour” at State Farm Stadium.
Kevin Mazur | Getty Images Entertainment | Getty Images

Revenge spending is not dead.
Even as Americans owe $1.13 trillion on their credit cards, consumers are still willing to splurge on impulsive purchases. It’s a phenomenon also known as “doom spending,” or spending money despite economic and geopolitical concerns.

Roughly 38% of adults plan to take on more debt to travel, dine out and see live entertainment in the year ahead, according to a recent report by Bankrate.
One quarter, or 27%, of those surveyed said they would go into debt to travel this year, while 14% would dip into the red to dine out and another 13% would lean on credit to go to the theater, see a live sporting event or attend a concert — including the European leg of Taylor Swift’s Eras Tour, Bankrate found.
“There’s still a lot of demand for out-of-home entertainment,” said Ted Rossman, senior industry analyst at Bankrate.
“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape,” Rossman said.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

Younger adults, particularly Generation Z and millennials, were more likely to splurge on those discretionary purchases, Bankrate found.

Although an increased cost of living has made it particularly hard for those just starting out, young adults are taking a more relaxed approach to their long-term financial security, other studies also show.
Rather than cut expenses to boost savings, 73% of Gen Zers between the ages of 18 and 25 said they would rather have a better quality of life than extra money in the bank, a Prosperity Index report by Intuit found. 
Gen Z workers are also the biggest cohort of non-savers, according to a separate Bankrate survey. 

“It’s hard to overstate the impact of the pandemic, it changed the way so many people view their spending and the result is that people are more focused on the ‘right now’ than thinking about 40 years from now,” said Matt Schulz, chief credit analyst at LendingTree and author of “Ask Questions, Save Money, Make More.”
However, that will have repercussions later on, he added.
When it comes to saving for long-term goals, young adults risk forfeiting the significant advantage of time.
“Every dollar you set aside in your 20’s will compound over time,” Rossman said. The earlier you start, the more you will benefit from compound interest, whereby the money you earn gets reinvested and earns even more.
At the very least, strike a balance, Rossman advised. Automate a portion of your income toward savings and build some fun into the budget, he said. “At least then you are not paying 20 percent credit card interest.”
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Smart Tax Planning

There’s still time to make a 2023 individual retirement account contribution and possibly claim a deduction.
But not everyone qualifies for the tax break. It depends on your filing status, income and workplace retirement plan.
Even if you’re eligible, you should weigh your goals before contributing, experts say.

Damircudic | E+ | Getty Images

The tax deadline is approaching and there’s still time to score a deduction with a pretax individual retirement account contribution — if you qualify.
For 2023, the IRA contribution limit was $6,500, plus an extra $1,000 for investors age 50 and older. That increased to $7,000 for 2024, with $1,000 more for catch-up contributions.

You can still add money to your IRA for 2023 before the federal tax deadline, which is April 15 for most taxpayers. But you must designate the deposit for tax year 2023.
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A last minute pretax IRA contribution for 2023 could qualify for an “above-the-line” deduction, which you can claim even if you don’t itemize tax breaks, and it reduces your adjusted gross income.
However, the IRA deductibility rules can be “very confusing,” according to Mark Steber, chief tax information officer at Jackson Hewitt.
Your eligibility for a pretax IRA deduction depends on three factors: your filing status, modified adjusted gross income and your workplace retirement plan.

Here’s who qualifies for the IRA deduction

If you don’t have a workplace retirement plan, there’s no income limit for IRA deductions, which could be appealing for higher earners, experts say.
But it’s more complicated if you participate in a workplace retirement plan. “Participation” could include employee contributions, company matches, profit-sharing or other employer deposits.

“It’s important to understand there are deductibility limitations,” certified financial planner Malcolm Ethridge, executive vice president of CIC Wealth in Rockville, Maryland, recently told CNBC.
You could deduct all, part, or none of your pretax IRA contributions, depending on your filing status and income. The complete IRS eligibility chart is available here.
For 2023, there’s a full deduction for single filers with a modified adjusted gross income of $73,000 or less, and a partial deduction up to $83,000.
The limits are higher for married couples filing together, with a full deduction at $116,000 or less, and a partial deduction before reaching $136,000.
“Even if you maxed out the plan at your current company, your income could still be low enough to make a tax-deductible [IRA] contribution,” Ethridge said.

Consider your investing goals first

While scoring a last minute deduction with a pretax contribution may be tempting, you need to consider your goals and timeline before proceeding, experts say.
The contribution could offer a benefit this year, only to create a future “tax problem,” said CFP Laura Mattia, CEO of Atlas Fiduciary Financial in Sarasota, Florida. 
Plus, you need to weigh your immediate priorities, including major expenses, because “you don’t want to use a retirement vehicle for shorter-term savings,” she said.

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There’s an opportunity to qualify for student loan forgiveness, but borrowers need to act by April 30, the Consumer Financial Protection Bureau says.
Here’s what to know about income-driven repayment plans.

Worried woman looking at her mobile phone.
Srdjanpav | E+ | Getty Images

There’s a student loan forgiveness opportunity available to many borrowers, but they’ll have to act by April 30 to qualify, the Consumer Financial Protection Bureau says.
The U.S. Department of Education is conducting a one-time adjustment of borrowers’ payments this summer, and those who request a consolidation by the end of this month — which will leave them with one, larger loan — could get their debt canceled immediately or sooner than they would have otherwise.

“The one-time adjustment is designed to count more of the payments you made, so they can be added to the payments required for cancellation,” the CFPB says.
Here’s what to know.

Consolidation can get you closer to loan forgiveness

Income-driven repayment plans, which date to 1994, set borrowers’ monthly payments based on a share of their discretionary income. Those payments are typically lower than under standard repayment, and can be zero under some plans.
Borrowers typically get any remaining debt forgiven after 10, 20 or 25 years, depending on the plan.
One complicating factor for borrowers in these programs is that they often have multiple loans, taken out at different times, said higher education expert Mark Kantrowitz.

“They get at least one new loan each year in school, on average,” he said.
That can mean a borrower has multiple timelines to forgiveness, one for each of those loans.
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Now, the Biden administration is temporarily offering borrowers the chance to combine their loans and to get credit going back as far as their first loan payment on the oldest of their original loans in that bundle.
This could be a good deal for many, experts say.
For example, say a borrower graduated from college in 2004, took out more loans for a graduate degree in 2018 and is now in repayment under an income-driven plan with a 20-year timeline to forgiveness. Consolidating could lead them to immediately qualify for forgiveness on all of those loans, experts say, even though they’d normally need to wait at least another 14 years for full relief.
Usually, a student loan consolidation restarts a borrowers’ forgiveness timeline, making it a terrible move for those working toward cancellation. But the Biden administration has changed that program detail through April 30.

What to know about consolidating your student loans

All federal student loans are eligible for consolidation, including Federal Family Education Loans, Parent Plus loans and Perkins Loans, Kantrowitz said.
You can apply for a Direct Consolidation Loan at StudentAid.gov or with your loan servicer.
“So long as the application is submitted by April 30, they should be fine, even if the servicers take longer to process it,” Kantrowitz said.

Some borrowers who took out small amounts may even be eligible for cancellation after as few as 10 years’ worth of payments, if they enroll in the new income-driven repayment option, known as the SAVE plan.
Consolidating your loans shouldn’t increase your monthly payment, since your bill under an income-driven repayment plan is based on your earnings and not your total debt, Kantrowitz said.
The new interest rate will be a weighted average of the rates across your loans.

Before consolidating, it may be a good idea to get a complete payment history of each loan, so that you can later make sure you’re getting the full credit you’re entitled to, said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing.
You should be able to get a history of your payments at StudentAid.gov by looking into your loan details. You can also ask your servicer for a complete record.
The payment history counts when your loans first entered repayment, not when the loan was borrowed, Rubin said.
If a borrower believes there is an issue with their payment count, they can talk to their loan servicer or submit a complaint with the Department of Education’s Federal Student Aid unit, she added.
You should never have to pay a fee to consolidate your loan, the CFPB says. It is mostly scammers that would try to get you to do so. More

The total cost of attendance at some colleges and universities is now closing in on six figures per year.
Still, many families will pay a lot less.
Financial aid, including scholarships, grants and loans, accounts for a wide gap between the published price and net cost.

The price tag for a college education has never been higher — and it’s only going up.
The cost of attendance at some schools, including New York University, Tufts, Brown, Yale, and Washington University in St. Louis, is now nearing six figures a year, after factoring in tuition, fees, room and board, books, transportation and other expenses.

Among the schools on The Princeton Review’s “The Best 389 Colleges” list that have already set their costs for the 2024-25 academic year, eight institutions have a sticker price of more than $90,000 per year so far, according to data provided to CNBC.
Considering that tuition adjustments average roughly 4% a year, those institutions — and others — could cross the $100,000 threshold as soon as 2026, according to an estimate by Bryan Alexander, a senior scholar at Georgetown University.
However, that’s not what many families pay.
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“Crossing a school off the list of consideration based on sticker price alone is a mistake,” said Robert Franek, editor-in-chief of The Princeton Review.

He said about two-thirds of all full-time students receive aid, which can bring the cost significantly down. 

Net price: Your net price is tuition and fees minus grants, scholarships and education tax benefits, according to the College Board.

The Princeton Review even ranked colleges by how much financial aid is awarded and how satisfied students are with their packages. These are the colleges that came out on top.
At Washington University in St. Louis, for example, the average scholarship award is just over $65,000 per year, The Princeton Review found, which brings the total out-of-pocket cost closer to $26,000.
In fact, when it comes to offering aid, private schools typically have more money to spend, Franek said.
“When you factor in the average grant, these schools become some of the most affordable in the country,” he said.

What college really costs

The amount families actually spent on education costs in the 2022-23 academic year was, on average, $28,026, according to Sallie Mae’s annual How America Pays for College report.
While parental income and savings cover nearly half of college costs, free money from scholarships and grants accounts for a more than a quarter of the costs, and student loans make up most of the rest, the education lender found.
The U.S. Department of Education awards about $120 billion every year to help students pay for higher education. And beyond federal aid, students could also be eligible for financial assistance from their state or college.
But students must first fill out the Free Application for Federal Student Aid, which serves as the gateway to all federal money, including loans, work-study and grants.

This year, problems with the new FAFSA have discouraged many students and their families from completing an application.
As of the last tally, 6.6 million FAFSA forms have been submitted. That’s a fraction of the approximately 17 million students who use the FAFSA form in ordinary years. And under the new aid formula, an additional 2.1 million students should be eligible for the maximum Pell Grant, according to the Department of Education.
“You cannot get away from the value of the FAFSA form even in these difficult times,” Franek said. “This is the key for unlocking the majority of financial aid dollars.”
Already, high school graduates miss out on billions in federal grants because they don’t fill out the FAFSA, experts say. 
In total, the high school Class of 2022 left an estimated $3.6 billion of unclaimed Pell Grant dollars on the table, according to a report from the National College Attainment Network. 
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The Biden administration moved this week to limit how much rent can rise in certain affordable housing units across the country.
Here’s what tenants should know about the new protection.

Alexander Spatari | Moment | Getty Images

The Biden administration moved this week to limit how much rent can rise in certain affordable housing units across the country.
While some housing experts criticized the move, tenant advocates said the new rule, which will cap rent increases at 10%, will help people to stay in their homes.

“The rent is still too damn high, but this cap will provide stability to more than a million tenants,” said Tara Raghuveer, the director of the National Tenant Union Federation.
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However, Mortgage Bankers Association President and CEO Bob Broeksmit said capping rent increases would only worsen the housing-affordability crisis.
“Rent control has consistently proven to be a failed policy that discourages new construction, distorts market pricing, and leads to a degradation of the quality of rental housing — the exact opposite of what is currently needed in markets throughout the country,” Broeksmit said.
Here’s what renters should know about the new protection, which was announced on April 1 and is now in effect.

Who qualifies for the new cap?

The cap applies to units that receive funding from the Low-Income Housing Tax Credit, the nation’s largest federal affordable housing program, according to experts. The National Low-Income Housing Coalition estimates that around 2.6 million rental homes across the U.S. have current LIHTC rent and income restrictions.
To learn if you are in such a unit, you can look on your lease — check for the word “tax credit” or the letters “LIHTC” — or ask your landlord, said Shamus Roller, the executive director of the National Housing Law Project.
You can also ask your state housing agency, he said.
Some agencies have an interactive map and a list of all LIHTC properties available on their website, Roller said.
Another option is to ask your local recorder’s office for documentation.
“All LIHTC properties are subject to a regulatory agreement that must be recorded against the property,” he added.
There is also a LIHTC public database, but housing advocates warned it was outdated. A tenant could also check with the National Housing Preservation Database.

How much can my rent go up?

The U.S. Department of Housing and Urban Development uses income limits each year to calculate the maximum amount of rent that an owner can charge a LIHTC tenant, according to the National Housing Law Project.

These assessments are complicated, but under the new rule the annual rent increases, going forward, shouldn’t exceed 10% on eligible units, according to the National Housing Law Project.
This will help “keep seniors, families with children, people with disabilities and the lowest-income tenants in their homes,” Roller said.

What if my landlord tries to raise my rent by more?

If a tenant suspects that their landlord is ignoring the new rules, they should alert their property owner to the government’s updated policy and provide them with a copy of the official HUD announcement, Roller said.
“This policy can be difficult to understand and explain, so we highly recommend that tenants contact their local free legal services provider to help determine if the cap applies to them and if so, challenge unlawful rent hikes,” he added.
At Justshelter.org, people can search for local tenant resources, including such legal help.

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The number of students who started college but then withdrew has been on the rise, recent reports show.
Financial challenges are the main reasons at-risk students consider dropping out, according to one study.

Getting into college is one thing, staying in is another.
Although college enrollment declines leveled off this year, the number of students who started but then withdrew has been on the rise, according to the National Student Clearinghouse Research Center. There are now more than 40 million students who are currently unenrolled.

At the same time, roughly 26% of current undergraduates have seriously considered leaving college or are at risk of dismissal, according to a separate report by education lender Sallie Mae.

1 in 4 students at risk of not completing college

Students who are the first in their family to attend college are much more likely to consider leaving at some point, as are minorities and low-income students, who may also be juggling work commitments, the report found.
“We need more support for early college planning, especially for first-generation students or those from underserved communities,” said Rick Castellano, a spokesperson for Sallie Mae. “Often the conversation is about access,” he added, but “there are a ton of things we can do to better address college completion.”
Among students who are considering putting their education on hold, most said it was due to financial concerns. Others cite a loss of motivation or life change followed by mental health challenges, Sallie Mae found.

Money is a main concern

Arrows pointing outwards

About half of students at risk of dropping out said it is difficult for them to meet the cost of tuition as well as other related expenses, such as textbooks, housing and food, according to Sallie Mae.
However, “it’s harder to come back after taking a gap year or multiple gap years,” Castellano also noted.
“The best thing you can do is stay the course and look for other sorts of funding, such as scholarships,” he said.
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“The worst thing you can do is have loans and drop out because then you have the debt and not the advantage of the degree,” said Nancy Goodman, founder of College Money Matters, a nonprofit focused on helping high school students and their families make informed decisions about paying for college.
Already, among borrowers who start college but never finish, the default rate is nearly three times higher than the rate for borrowers who have a diploma, according to The Pew Charitable Trusts.
“My advice is try to find ways to get through it and borrow less money,” Goodman said.
Whether that’s through picking up a part-time job, taking extra classes in order to graduate early or living with a friend to save on housing costs, she suggested.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

The market could reach a new milestone if the Dow Jones Industrial Average reaches 40,000.
However, investors may want to brace for a market pullback and other uncertainties.
Here’s what experts say you may want to consider to keep your portfolio on track.

A man sits on the Wall street bull near the New York Stock Exchange (NYSE) on November 24, 2020 in New York City.
Spencer Platt | Getty Images

The stock market could reach a milestone if the Dow Jones Industrial Average reaches 40,000.
However, even as stocks have climbed higher, investors are worried there could be a pullback, financial advisors say.

They’re not alone in those concerns.
A recent CNBC survey of investment professionals found 61% think the market has run too far, too fast and a market drop could be coming.
“It does feel like we’re at an inflection point where things could go either way,” said Christine Benz, director of personal finance and retirement planning at Morningstar.

Will there be a pullback?

After a mostly uninterrupted market rally over the past four or five months, it would not be surprising to see a pullback, said Angelo Kourkafas, senior investment strategist at Edward Jones.
That would more likely come in the form of a temporary correction rather than a prolonged bear market, he said.

For investors who have gravitated towards cash, certificates of deposit, or bonds, a pullback may be an opportunity to deploy those funds in the market, Kourkafas said.
If you’re investing towards your retirement or other life goals, it’s best to avoid trying to time the market, said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
“The stock market is a long-term investment,” said Jenkin, who is also a member of the CNBC’s Advisor Council.

Will the election hurt the markets?

Investors are jittery that the presidential election results may throw the markets off track, surveys show.
But experts say those worries are misguided.
“It is really very hard to find any evidence in the data that politics is a long-term determinant of market performance,” Kourkafas said.
However, there may be increased volatility in the months preceding the election, he said.
What’s unique this time around is we are already familiar with both of the likely candidates — current President Joe Biden and former President Donald Trump — and the markets have performed equally well under both leaders, he said.
Instead, the outlook may depend more on other factors such as interest rates, corporate earnings and economic growth, he said.
Financial advisors including Louis Barajas, a CFP and enrolled agent, say their clients are concerned the election may affect their portfolios.
“I tell them, ‘Listen, presidents come, presidents go, the economy’s going to change. But in the long term, the market tends to be up,'” said Barajas, who is CEO of International Private Wealth Advisors in Irvine, California, and also a member of the CNBC FA Council.
Rather than focus on outside events, Barajas steers his clients to focus on their personal goals.

How to make sure you’re protected ‘no matter what happens’

Today’s market uncertainty is a reminder of the value of humility, said Morningstar’s Benz.
And the best way to express humility in portfolios is to diversify, she said.
“No matter what happens, we’re reasonably well protected,” Benz said.
For young investors, that may mean moving away from U.S. stocks to non-U.S. holdings, she said. That may be done through a fund that reflects global market capitalization, such as the Vanguard Total World Stock ETF.
Older investors may want to take advantage of higher fixed income yields and add more safer assets to their portfolios, she said. That can include, cash, short- and intermediate-term high quality bonds to build a runway to spend from, even if stocks do go down.
“You can have a safer portfolio and expect to earn a decent rate of return today,” Benz said.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

If you’re already in retirement and spending from your portfolio, it’s worth having those safeguards in place.
Finding the right mix of assets will depend on your personal timeline.
For financial goals that aren’t at least five years away, it makes no sense to invest in the stock market, Jenkin said.
To test your own portfolio allocation based on your age, Jenkin said he likes to follow the rule of 120 – subtract your age from that number to find out how you should be invested. So if you’re 60 years old, for example, a 60% allocation to stocks may make sense.
When it comes to revisiting your portfolio allocations, it’s wise to set your own schedule rather than react to market or other news events.
“Make a plan to do that once a year or so,” Benz said. More