Financial news summary | 02 July 2023
Headlines | Sunday, 2 July 2023
- Supreme Court ruled 6-3 against Biden's Student Loan Forgiveness Program
- 16 million student loan borrowers had debt relief approved, what will happen now?
- When do student loan repayments restart?
- PCE data shows both headline and core inflation declined in May year-on-year to 3.8% and 4.6%, respectively
- The weekly average mortgage rate ticked up this week to 6.71% for 30-yr FRM
- Initial unemployment claims dropped last week to 239,000, a decrease of 26,000 from a week prior
- Fed Chair Powell doesn't discount two consecutive rate hikes in future
- US consumer confidence jumps to highest level since January 2022
- Dates for Social Security payments in July
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The program offered $10,000 in debt relief for borrowers with an individual income of no more than $125,000 per year or $250,000 for couples who file jointly.
There was an additional $10,000 in debt forgiveness for borrowers who received a Pell Grant while in college, allowing them to write off up to $20,000 in student loan debt. The Pell Grant is typically awarded to undergraduate students from low-income households.
When will student loan payments restart?
Borrowers are not getting anymore extensions of the moratorium due to the debt ceiling deal reached between the White House and Republican leadership in the House of Representatives. As the Federal Student Aid website states: “Congress recently passed a law preventing further extensions of the payment pause.”
As part of the deal, President Biden managed to avoid throwing out his broad-based federal student loan forgiveness program that was then awaiting a Supreme Court ruling but set a fixed expiration to the pause on payments and interest.
Which states will distribute payments on July 1?
Alaska, North Dakota, Rhode Island and Vermont will distribute all payments on July 1, regardless of the month of birth or initial of the last name of the beneficiaries.
However, the distribution of payments is administered by state and, on many occasions, depends on the month of birth, the initials of the beneficiaries, or the last digit of their Social Security number, here is some of the list of states that will begin distributing SNAP coupon payments on July 1 and will continue to do so throughout the month:
Arizona: July 1 - 13
California: July 1 - 10
Florida: July 1 - 28
Texas: July 1 - 28
Washington: July 1 - 20
AS USA's Daniela and Gidget have put together the full list of states including the dates of the payments
Who will first receive SNAP payments of up to $4,223 in July 2023?
Large families in Missouri will be able to obtain a maximum payment of up to $4,223 dollars per month, since the SNAP Program grants an extra $211 dollars for each additional member, up to a maximum of 20 people by family.
Payments will begin to be issued from 1 July, although the exact date will depend on the initial of the last name of the beneficiaries and their month of birth. Those who were born in January and have the initials A - K in their last names will be able to receive the money as of 1 July, while those whose initials go from L - Z, they will receive it on 2 July.
Tax Forums on tour !
The IRS Nationwide Tax Forum is back in-person this summer as tax professionals meetup to earn Continuing Professional Education Credits, network with other tax experts, learn about the latest information from the IRS and news about tax law changes, resolve difficult tax cases, and hear directly from the National Taxpayer Advocate in her Town Hall.
This year the Nationwide Tax Forum is taking place in five cities across the country starting in New Orleans, and closing out in Orlando, Florida.
$1.5 billion unclaimed from 2019 tax returns
The Internal Revenue Service today encouraged nearly 1.5 million people across the nation to submit a tax return to claim their refunds for tax year 2019 by the July 17, 2023, deadline.
The IRS estimates almost $1.5 billion in refunds remain unclaimed because people haven't filed their 2019 tax returns yet. Available data includes a special state-by-state estimate of how many people are potentially eligible for these refunds in each state and each state's median potential refund. The average median refund for tax year 2019 was $893.
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The Social Security Administration is preparing to send payments of more than $1,800 to beneficiaries in July. Here are the exact payment dates.
Planning for retirement involves making important decisions about your financial future, and one crucial choice is selecting the right type of retirement account. Two popular options are the traditional 401(k) and the Roth 401(k). While they share similarities, understanding their differences is key to maximizing your retirement savings.
So what are the distinctions between these two pension programmes?
California is still the home of the most expensive gas prices, but Washington State as a whole has overtaken the Golden State for pain at the pump.
The White House moved fast after the Supreme Court struck down the student loan debt forgiveness program releasing the finalized structure of “the most affordable” payment plan ever.
Shortly after the Department of Education announced that an online portal to submit an application for debt relief went live, it was closed due to a legal challenge. But that wasn’t before over 26 million Americans sent in petitions to have some or all of their financial burden from getting a higher education canceled.
By the time the agency had to legally stop processing applications, more than 16 million borrowers had been fully approved and discharge letters were sent to student loan servicers. Those who would have benefited from President Biden’s student loan forgiveness program have been waiting for months to find out what fate would befall it.
The answer came on 30 June with the Supreme Court’s final ruling of the year which blocked the Biden administration from going forward with the student debt relief plan. Student loan borrowers who had hoped to take advantage of Biden’s debt forgiveness program must now contend with what to do next.
Every month, the Social Security Administration (SSA) issues millions of payments to Social Security recipients, most of which are retired workers.
The data provided by the SSA from May will give insights into how much beneficiaries can expect to receive next month. In May, the SSA sent Social Security checks to 66 million people, of which 74 percent were retired workers. The average check was worth 1,836.06, with the maximum benefit amount for this year being $4,555.
Read our full coverage for details on the July payment schedule.
Thanks to the distribution of SNAP coupons, these people could receive up to $4,223 in July 2023.
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The US has dozens of financial aid programs for low-income populations. Among them is the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps.
The distribution schedule of SNAP coupons depends on the administration of each state. These are the areas that start giving out payments on July 1.
Mortgage interest rates tick up
The weekly average mortgage rate in the US for the week ending 29 June ticked up this week to 6.71% for 30-yr FRM and 6.06% for the 15-yr FRM. The 30-year fixed mortgage average weekly rate has been hovering between 6% and 7% since peaking over seven percent late in 2022.
Initial unemployment claims drop by 26,000 to 239,000
The US Department of Labor released unemployment insurance data for the week ending 24 June. First-time out-of-work benefit claims dropped to 239,000 from the previous reports upwardly revised 264,000. The 4-week moving average was 257,500, an increase of 1,500.
The White House was not slow in publishing its updated plans on the announcement that the Supreme Court had struck down student debt forgiveness plans. Despite being a sensible contigency measure, the speed in which new plans were announced on Friday do belie the lack of belief in the administration that the Supreme Court was to vote in President Biden’s favour.
Here is what they have come up with.
Plans underway for alternative student debt forgiveness
The Department of Education has initiated rulemaking aimed at opening an alternative path to debt relief for as many borrowers as possible, using the Secretary of Education’s authority under the Higher Education Act.
The Department issued a notice, which is the first step in the process of issuing new regulations under this so-called “negotiated rulemaking” process. The notice announces a virtual public hearing on 18 July and solicits written comments from stakeholders on topics to consider.
Republicans in Congress voted to overturn the plan. I think every one. I don’t think I had any Republican votes for this plan.
At the same time, think about this: We all supported the Paycheck Protection Program — remember? — PPP — you know, which was designed to help businessowners who lost money because of the pandemic. It was a worthy program.
But let’s be clear: Some of the same elected Republicans, members of Congress who strongly opposed giving relief to students, got hundreds of thousands of dollars themselves in relief — members of Congress — because of the businesses they were able to keep open.
Several members of Congress got over a million dollars. All those loans were forgiven. You know how much that program cost? $760 billion. My program is too expensive? $360 billion more than I proposed in my student debt relief program.
I was trying to provide students with 10 to 20 thou- — $10- to $20,000 of relief. By comparison, the average amount forgiven in the PPP — the pandemic loan program — average amount forgiven was $70,000.
Now, a kid making 60,000 bucks, trying to pay back his bills, asking for $10,000 in relief — come on. The hypocrisy is stunning.
You can’t help a family making 75 grand a year, but you can help a millionaire and you have your debt forgiven?
White House strikes out at lawmakers who are cheering student loan forgiveness being struck down
One of the arguements against President Biden's student loan forgiveness program from its detractor was that it was too expensive, costing around $400 billion. The White House is is drawing a comparison with another goverment program, which some of those same detractors took advantage of.
During the pandemic the federal government handed out around $790 billion through the Paycheck Protection Program. This provided loans to help businesses keep there employees on the books. Of those funds handed out, the government has forgiven $757 billion, including a number of lawmakers in Congress.
We take a look at the 10 most affordable cities in the US in 2023 and what makes them more affordable than the rest.
Median salary and average salary often get confused. However, the difference between the two can be quite substantial. Here’s a look at the each one.
Hello and welcome to AS USA's live blog covering financial news
The Supreme Court ruled 6-3 that President Biden didn’t have the authority to issue his broad student loan debt forgiveness executive order. Now millions of student loan borrowers who had hoped to benefit from the debt relief will need to reassess how to deal with what they owe.
The moratorium on student loan repayments and interest, in place for more than three years, cannot be extended under law. Experts worry that once repayments start in the fall it could take a toll on the economy, others are concerned that many borrowers could drown under debt.
But for now, American consumers feel the most confident about the economy since January 2022 as the US economy continues to chug along. The latest data showed initial unemployment claims dropping by the most in 20 months and the new PCE inflation report showed price increases slowing more than expected. Despite that good news, and because of it, the chances of the Federal Reserve resuming interest rate hikes in July jumped.