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Tag: Education costs

  • Student loan borrowers in default may see wages garnished in 2026

    WASHINGTON — The Trump administration said on Tuesday that it will begin garnishing the wages of student loan borrowers who are in default early next year.

    The department said it will send notices to approximately 1,000 borrowers the week of January 7, with more notices to come at an increasing scale each month.

    Millions of borrowers are considered in default, meaning they are 270 days past due on their payments. The department must give borrowers 30 days notice before their wages can be garnished.

    The department said it will begin collection activities, “only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”

    In May, the Trump administration ended the pandemic-era pause on student loan payments, beginning to collect on defaulted debt through withholding tax refunds and other federal payments to borrowers.

    The move ended a period of leniency for student loan borrowers. Payments restarted in October of 2023, but the Biden administration extended a grace period of one year. Since March 2020, no federal student loans had been referred for collection, including those in default, until the Trump administration’s changes earlier this year.

    The Biden administration tried multiple times to give broad forgiveness to student loans, but those efforts were eventually stopped by courts.

    Persis Yu, deputy executive director for the Student Borrower Protection Center, criticized the decision to begin garnishing wages, and said the department had failed to sufficiently help borrowers find affordable payment options.

    “At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration’s decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible,” Yu said in a statement. “As millions of borrowers sit on the precipice of default, this Administration is using its self-inflicted limited resources to seize borrowers’ wages instead of defending borrowers’ right to affordable payments.”

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • Trump administration pledges to speed some student loan forgiveness after lawsuit

    NEW YORK (AP) — The Trump administration has agreed to resume student loan forgiveness for an estimated 2.5 million borrowers who are enrolled in certain federal repayment plans following a lawsuit from the American Federation of Teachers.

    Under the agreement reached Friday between the teachers union and the administration, the Education Department will process loan forgiveness for those eligible in certain repayment plans that offer lower monthly payments based on a borrower’s earnings. The government had stopped providing forgiveness under those plans based on its interpretation of a different court decision.

    The agreement will also protect borrowers from being hit with high tax bills on debt due to be forgiven this year.

    “We took on the Trump administration when it refused to follow the law and denied borrowers the relief they were owed,” AFT President Randi Weingarten said in a statement. “Our agreement means that those borrowers stuck in limbo can either get immediate relief or finally see a light at the end of the tunnel.”

    The Education Department said the Trump administration is reviewing forgiveness programs to identify ones that were not affected by court rulings that blocked much of the Biden administration’s efforts to cancel student debt.

    “The Administration looks forward to continuing its work to simplify the student loan repayment process through implementation of the President’s One Big Beautiful Bill Act,” the department said in a statement.

    Several forgiveness programs are included

    According to the deal, the Trump administration must cancel student debt for eligible borrowers enrolled in the following plans: income-driven repayment (IDR) plans, income-contingent repayment plans, Pay As You Earn (PAYE), and Public Service Loan Forgiveness (PSLF) plans.

    If borrowers have made payments beyond what was needed for forgiveness, those payments will be reimbursed. The Education Department must also continue to process IDR and PSLF “buyback” applications. Balances forgiven before Dec. 31 will not be treated as taxable income, as they will in 2026 due to a recent change in tax law.

    The administration must also file progress reports every six months with the court to show the pace of application processing and loan forgiveness, according to the AFT.

    How many borrowers are waiting for forgiveness?

    An estimated 2.5 million borrowers in IDR plans will be affected by the agreement, and another 70,000 are waiting for forgiveness through the PSLF program.

    Even with the agreement in place, mass layoffs at the Education Department could factor into processing times for forgiveness, said Megan Walter, senior policy analyst at the National Association of Student Financial Aid Administrators.

    If borrowers continue to make payments while their application is pending forgiveness, that will be refunded to them if they are successful, Walter said. “But keep really good records,” she said.

    What are the PSLF and buyback forgiveness programs?

    Public Service Loan Forgiveness, which has been in place since 2007, forgives federal student loans for borrowers who have worked at non-profit organizations or in public service after 120 payments, or 10 years. The Biden administration also created an option for borrowers to “buy back” months of payments they missed during forbearance or deferment in 2023, to allow more people to qualify for that forgiveness.

    To determine if you qualify for a buy-back under the PSLF program, consult this page at the Education Department.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • Trump administration pledges to speed some student loan forgiveness after lawsuit

    NEW YORK — NEW YORK (AP) — The Trump administration has agreed to resume student loan forgiveness for an estimated 2.5 million borrowers who are enrolled in certain federal repayment plans following a lawsuit from the American Federation of Teachers.

    Under the agreement reached Friday between the teachers union and the administration, the Education Department will process loan forgiveness for those eligible in certain repayment plans that offer lower monthly payments based on a borrower’s earnings. The government had stopped providing forgiveness under those plans based on its interpretation of a different court decision.

    The agreement will also protect borrowers from being hit with high tax bills on debt due to be forgiven this year.

    “We took on the Trump administration when it refused to follow the law and denied borrowers the relief they were owed,” AFT President Randi Weingarten said in a statement. “Our agreement means that those borrowers stuck in limbo can either get immediate relief or finally see a light at the end of the tunnel.”

    The Education Department said the Trump administration is reviewing forgiveness programs to identify ones that were not affected by court rulings that blocked much of the Biden administration’s efforts to cancel student debt.

    “The Administration looks forward to continuing its work to simplify the student loan repayment process through implementation of the President’s One Big Beautiful Bill Act,” the department said in a statement.

    According to the deal, the Trump administration must cancel student debt for eligible borrowers enrolled in the following plans: income-driven repayment (IDR) plans, income-contingent repayment plans, Pay As You Earn (PAYE), and Public Service Loan Forgiveness (PSLF) plans.

    If borrowers have made payments beyond what was needed for forgiveness, those payments will be reimbursed. The Education Department must also continue to process IDR and PSLF “buyback” applications. Balances forgiven before Dec. 31 will not be treated as taxable income, as they will in 2026 due to a recent change in tax law.

    The administration must also file progress reports every six months with the court to show the pace of application processing and loan forgiveness, according to the AFT.

    An estimated 2.5 million borrowers in IDR plans will be affected by the agreement, and another 70,000 are waiting for forgiveness through the PSLF program.

    Even with the agreement in place, mass layoffs at the Education Department could factor into processing times for forgiveness, said Megan Walter, senior policy analyst at the National Association of Student Financial Aid Administrators.

    If borrowers continue to make payments while their application is pending forgiveness, that will be refunded to them if they are successful, Walter said. “But keep really good records,” she said.

    Public Service Loan Forgiveness, which has been in place since 2007, forgives federal student loans for borrowers who have worked at non-profit organizations or in public service after 120 payments, or 10 years. The Biden administration also created an option for borrowers to “buy back” months of payments they missed during forbearance or deferment in 2023, to allow more people to qualify for that forgiveness.

    To determine if you qualify for a buy-back under the PSLF program, consult this page at the Education Department.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • The 2026-27 FAFSA application is live. Here’s what to know

    NEW YORK (AP) — The Free Application for Federal Student Aid for the 2026-27 school year has officially opened.

    Despite the U.S. government shutdown, the Education Department will continue to process the FAFSA.

    If you plan to attend college next year, Jill Desjean, director of policy analysis at The National Association of Student Financial Aid Administrators, recommends that you fill it out as soon as you can.

    If it’s your first time applying, here’s what you need to know:

    How does the FAFSA work?

    The FAFSA is a free government application that uses students’ and their families’ financial information to determine whether they can get financial aid from the federal government to pay for college.

    The application will send a student’s financial information to the schools they are interested in attending. The amount of financial aid a student receives depends on each institution.

    The application is also used to determine eligibility for other federal student aid programs, like work-study and loans, as well as state and school aid. Sometimes, private, merit-based scholarships also require FAFSA information to determine if a student qualifies.

    What is the deadline to fill out the FAFSA?

    The FAFSA application for the 2026-2027 must be submitted by June 30, 2027. However, each state has different deadlines for financial aid. For example, California has a March 2, 2026, deadline and Kansas has an April 15, 2026, deadline for state financial aid programs.

    You can check your state’s deadline here.

    This year’s application rolled out Sept. 24, a week ahead of the anticipated Oct. 1 launch.

    “This is a really welcomed change and hopefully it will be a turning point where we can expect to see a FAFSA every year by or even before October 1st,” Desjean said.

    How can I prepare to fill out the FAFSA form?

    The first step in the process is to create a studentaid.gov account and gather the following documents:

    — Social Security number

    — Driver’s license number

    — Alien registration number, if you are not a U.S. citizen

    — Federal income tax returns, W-2s and other records of money earned

    — Bank statements and records of investments

    — Records of untaxed income

    Who should fill out the FAFSA?

    Anyone planning to attend college next year should fill out the form. Both first-time college students and returning students can apply.

    “Even if you think you won’t qualify, the worst thing that can happen is that you might get finance aid you didn’t know you qualified for,” Desjean said.

    Students and parents can use the federal student aid estimator to get an early approximation of their financial package.

    What information do I need from my parents?

    If you are filing as a dependent student, you’ll need to provide the financial information of at least one parent. Parents need to create their own FSA IDs. When your parents fill out the application, they can manually input their tax return information or use the IRS Data Retrieval Tool.

    ——

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • Colleges are fighting to prove their return on investment

    WASHINGTON (AP) — For a generation of young Americans, choosing where to go to college — or whether to go at all — has become a complex calculation of costs and benefits that often revolves around a single question: Is the degree worth its price?

    Public confidence in higher education has plummeted in recent years amid high tuition prices, skyrocketing student loans and a dismal job market — plus ideological concerns from conservatives. Now, colleges are scrambling to prove their value to students.

    Borrowed from the business world, the term “return on investment” has been plastered on college advertisements across the U.S. A battery of new rankings grade campuses on the financial benefits they deliver. States such as Colorado have started publishing yearly reports on the monetary payoff of college, and Texas now factors it into calculations for how much taxpayer money goes to community colleges.

    “Students are becoming more aware of the times when college doesn’t pay off,” said Preston Cooper, who has studied college ROI at the American Enterprise Institute, a conservative think tank. “It’s front of mind for universities today in a way that it was not necessarily 15, 20 years ago.”

    Most bachelor’s degrees are still worth it

    A wide body of research indicates a bachelor’s degree still pays off, at least on average and in the long run. Yet there’s growing recognition that not all degrees lead to a good salary, and even some that seem like a good bet are becoming riskier as graduates face one of the toughest job markets in years.

    A new analysis released Thursday by the Strada Education Foundation finds 70% of recent public university graduates can expect a positive return within 10 years — meaning their earnings over a decade will exceed that of a typical high school graduate by an amount greater than the cost of their degree. Yet it varies by state, from 53% in North Dakota to 82% in Washington, D.C. States where college is more affordable have fared better, the report says.

    It’s a critical issue for families who wonder how college tuition prices could ever pay off, said Emilia Mattucci, a high school counselor at East Allegheny schools, near Pittsburgh. More than two-thirds of her school’s students come from low-income families, and many aren’t willing to take on the level of debt that past generations accepted.

    Instead, more are heading to technical schools or the trades and passing on four-year universities, she said.

    “A lot of families are just saying they can’t afford it, or they don’t want to go into debt for years and years and years,” she said.

    Education Secretary Linda McMahon has been among those questioning the need for a four-year degree. Speaking at the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers right out of high school.

    “I’m not saying kids shouldn’t go to college,” she said. “I’m just saying all kids don’t have to go in order to be successful.”

    Lowering college tuition and improving graduate earnings

    American higher education has been grappling with both sides of the ROI equation — tuition costs and graduate earnings. It’s becoming even more important as colleges compete for decreasing numbers of college-age students as a result of falling birth rates.

    Tuition rates have stayed flat on many campuses in recent years to address affordability concerns, and many private colleges have lowered their sticker prices in an effort to better reflect the cost most students actually pay after factoring in financial aid.

    The other part of the equation — making sure graduates land good jobs — is more complicated.

    A group of college presidents recently met at Gallup’s Washington headquarters to study public polling on higher education. One of the chief reasons for flagging confidence is a perception that colleges aren’t giving graduates the skills employers need, said Kevin Guskiewicz, president of Michigan State University, one of the leaders at the meeting.

    “We’re trying to get out in front of that,” he said.

    The issue has been a priority for Guskiewicz since he arrived on campus last year. He gathered a council of Michigan business leaders to identify skills that graduates will need for jobs, from agriculture to banking. The goal is to mold degree programs to the job market’s needs and to get students internships and work experience that can lead to a job.

    A disconnect with the job market

    Bridging the gap to the job market has been a persistent struggle for U.S. colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year the institute, partnering with Strada researchers, found 52% of recent college graduates were in jobs that didn’t require a degree. Even higher-demand fields, such as education and nursing, had large numbers of graduates in that situation.

    “No programs are immune, and no schools are immune,” Sigelman said.

    The federal government has been trying to fix the problem for decades, going back to President Barack Obama’s administration. A federal rule first established in 2011 aimed to cut federal money to college programs that leave graduates with low earnings, though it primarily targeted for-profit colleges.

    A Republican reconciliation bill passed this year takes a wider view, requiring most colleges to hit earnings standards to be eligible for federal funding. The goal is to make sure college graduates end up earning more than those without a degree.

    Others see transparency as a key solution.

    For decades, students had little way to know whether graduates of specific degree programs were landing good jobs after college. That started to change with the College Scorecard in 2015, a federal website that shares broad earnings outcomes for college programs. More recently, bipartisan legislation in Congress has sought to give the public even more detailed data.

    Lawmakers in North Carolina ordered a 2023 study on the financial return for degrees across the state’s public universities. It found that 93% produced a positive return, meaning graduates were expected to earn more over their lives than someone without a similar degree.

    The data is available to the public, showing, for example, that undergraduate degrees in applied math and business tend to have high returns at the University of North Carolina at Chapel Hill, while graduate degrees in psychology and foreign languages often don’t.

    Colleges are belatedly realizing how important that kind of data is to students and their families, said Lee Roberts, chancellor of UNC-Chapel Hill, in an interview.

    “In uncertain times, students are even more focused — I would say rightly so — on what their job prospects are going to be,” he added. “So I think colleges and universities really owe students and their families this data.”

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

    Source link

  • Is college worth the cost? Universities work to show the return on investment

    WASHINGTON — WASHINGTON (AP) — For a generation of young Americans, choosing where to go to college — or whether to go at all — has become a complex calculation of costs and benefits that often revolves around a single question: Is the degree worth its price?

    Public confidence in higher education has plummeted in recent years amid high tuition prices, skyrocketing student loans and a dismal job market — plus ideological concerns from conservatives. Now, colleges are scrambling to prove their value to students.

    Borrowed from the business world, the term “return on investment” has been plastered on college advertisements across the U.S. A battery of new rankings grade campuses on the financial benefits they deliver. States such as Colorado have started publishing yearly reports on the monetary payoff of college, and Texas now factors it into calculations for how much taxpayer money goes to community colleges.

    “Students are becoming more aware of the times when college doesn’t pay off,” said Preston Cooper, who has studied college ROI at the American Enterprise Institute, a conservative think tank. “It’s front of mind for universities today in a way that it was not necessarily 15, 20 years ago.”

    A wide body of research indicates a bachelor’s degree still pays off, at least on average and in the long run. Yet there’s growing recognition that not all degrees lead to a good salary, and even some that seem like a good bet are becoming riskier as graduates face one of the toughest job markets in years.

    A new analysis released Thursday by the Strada Education Foundation finds 70% of recent public university graduates can expect a positive return within 10 years — meaning their earnings over a decade will exceed that of a typical high school graduate by an amount greater than the cost of their degree. Yet it varies by state, from 53% in North Dakota to 82% in Washington, D.C. States where college is more affordable have fared better, the report says.

    It’s a critical issue for families who wonder how college tuition prices could ever pay off, said Emilia Mattucci, a high school counselor at East Allegheny schools, near Pittsburgh. More than two-thirds of her school’s students come from low-income families, and many aren’t willing to take on the level of debt that past generations accepted.

    Instead, more are heading to technical schools or the trades and passing on four-year universities, she said.

    “A lot of families are just saying they can’t afford it, or they don’t want to go into debt for years and years and years,” she said.

    Education Secretary Linda McMahon has been among those questioning the need for a four-year degree. Speaking at the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers right out of high school.

    “I’m not saying kids shouldn’t go to college,” she said. “I’m just saying all kids don’t have to go in order to be successful.”

    American higher education has been grappling with both sides of the ROI equation — tuition costs and graduate earnings. It’s becoming even more important as colleges compete for decreasing numbers of college-age students as a result of falling birth rates.

    Tuition rates have stayed flat on many campuses in recent years to address affordability concerns, and many private colleges have lowered their sticker prices in an effort to better reflect the cost most students actually pay after factoring in financial aid.

    The other part of the equation — making sure graduates land good jobs — is more complicated.

    A group of college presidents recently met at Gallup’s Washington headquarters to study public polling on higher education. One of the chief reasons for flagging confidence is a perception that colleges aren’t giving graduates the skills employers need, said Kevin Guskiewicz, president of Michigan State University, one of the leaders at the meeting.

    “We’re trying to get out in front of that,” he said.

    The issue has been a priority for Guskiewicz since he arrived on campus last year. He gathered a council of Michigan business leaders to identify skills that graduates will need for jobs, from agriculture to banking. The goal is to mold degree programs to the job market’s needs and to get students internships and work experience that can lead to a job.

    Bridging the gap to the job market has been a persistent struggle for U.S. colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year the institute, partnering with Strada researchers, found 52% of recent college graduates were in jobs that didn’t require a degree. Even higher-demand fields, such as education and nursing, had large numbers of graduates in that situation.

    “No programs are immune, and no schools are immune,” Sigelman said.

    The federal government has been trying to fix the problem for decades, going back to President Barack Obama’s administration. A federal rule first established in 2011 aimed to cut federal money to college programs that leave graduates with low earnings, though it primarily targeted for-profit colleges.

    A Republican reconciliation bill passed this year takes a wider view, requiring most colleges to hit earnings standards to be eligible for federal funding. The goal is to make sure college graduates end up earning more than those without a degree.

    Others see transparency as a key solution.

    For decades, students had little way to know whether graduates of specific degree programs were landing good jobs after college. That started to change with the College Scorecard in 2015, a federal website that shares broad earnings outcomes for college programs. More recently, bipartisan legislation in Congress has sought to give the public even more detailed data.

    Lawmakers in North Carolina ordered a 2023 study on the financial return for degrees across the state’s public universities. It found that 93% produced a positive return, meaning graduates were expected to earn more over their lives than someone without a similar degree.

    The data is available to the public, showing, for example, that undergraduate degrees in applied math and business tend to have high returns at the University of North Carolina at Chapel Hill, while graduate degrees in psychology and foreign languages often don’t.

    Colleges are belatedly realizing how important that kind of data is to students and their families, said Lee Roberts, chancellor of UNC-Chapel Hill, in an interview.

    “In uncertain times, students are even more focused — I would say rightly so — on what their job prospects are going to be,” he added. “So I think colleges and universities really owe students and their families this data.”

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

    Source link

  • Is college worth the cost? Universities work to show the return on investment of a degree

    WASHINGTON — WASHINGTON (AP) — For a generation of young Americans, choosing where to go to college — or whether to go at all — has become a complex calculation of costs and benefits that often revolves around a single question: Is the degree worth its price?

    Public confidence in higher education has plummeted in recent years amid high tuition prices, skyrocketing student loans and a dismal job market — plus ideological concerns from conservatives. Now, colleges are scrambling to prove their value to students.

    Borrowed from the business world, the term “return on investment” has been plastered on college advertisements across the U.S. A battery of new rankings grade campuses on the financial benefits they deliver. States such as Colorado have started publishing yearly reports on the monetary payoff of college, and Texas now factors it into calculations for how much taxpayer money goes to community colleges.

    “Students are becoming more aware of the times when college doesn’t pay off,” said Preston Cooper, who has studied college ROI at the American Enterprise Institute, a conservative think tank. “It’s front of mind for universities today in a way that it was not necessarily 15, 20 years ago.”

    A wide body of research indicates a bachelor’s degree still pays off, at least on average and in the long run. Yet there’s growing recognition that not all degrees lead to a good salary, and even some that seem like a good bet are becoming riskier as graduates face one of the toughest job markets in years.

    A new analysis released Thursday by the Strada Education Foundation finds 70% of recent public university graduates can expect a positive return within 10 years — meaning their earnings over a decade will exceed that of a typical high school graduate by an amount greater than the cost of their degree. Yet it varies by state, from 53% in North Dakota to 82% in Washington, D.C. States where college is more affordable have fared better, the report says.

    It’s a critical issue for families who wonder how college tuition prices could ever pay off, said Emilia Mattucci, a high school counselor at East Allegheny schools, near Pittsburgh. More than two-thirds of her school’s students come from low-income families, and many aren’t willing to take on the level of debt that past generations accepted.

    Instead, more are heading to technical schools or the trades and passing on four-year universities, she said.

    “A lot of families are just saying they can’t afford it, or they don’t want to go into debt for years and years and years,” she said.

    Education Secretary Linda McMahon has been among those questioning the need for a four-year degree. Speaking at the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers right out of high school.

    “I’m not saying kids shouldn’t go to college,” she said. “I’m just saying all kids don’t have to go in order to be successful.”

    American higher education has been grappling with both sides of the ROI equation — tuition costs and graduate earnings. It’s becoming even more important as colleges compete for decreasing numbers of college-age students as a result of falling birth rates.

    Tuition rates have stayed flat on many campuses in recent years to address affordability concerns, and many private colleges have lowered their sticker prices in an effort to better reflect the cost most students actually pay after factoring in financial aid.

    The other part of the equation — making sure graduates land good jobs — is more complicated.

    A group of college presidents recently met at Gallup’s Washington headquarters to study public polling on higher education. One of the chief reasons for flagging confidence is a perception that colleges aren’t giving graduates the skills employers need, said Kevin Guskiewicz, president of Michigan State University, one of the leaders at the meeting.

    “We’re trying to get out in front of that,” he said.

    The issue has been a priority for Guskiewicz since he arrived on campus last year. He gathered a council of Michigan business leaders to identify skills that graduates will need for jobs, from agriculture to banking. The goal is to mold degree programs to the job market’s needs and to get students internships and work experience that can lead to a job.

    Bridging the gap to the job market has been a persistent struggle for U.S. colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year the institute, partnering with Strada researchers, found 52% of recent college graduates were in jobs that didn’t require a degree. Even higher-demand fields, such as education and nursing, had large numbers of graduates in that situation.

    “No programs are immune, and no schools are immune,” Sigelman said.

    The federal government has been trying to fix the problem for decades, going back to President Barack Obama’s administration. A federal rule first established in 2011 aimed to cut federal money to college programs that leave graduates with low earnings, though it primarily targeted for-profit colleges.

    A Republican reconciliation bill passed this year takes a wider view, requiring most colleges to hit earnings standards to be eligible for federal funding. The goal is to make sure college graduates end up earning more than those without a degree.

    Others see transparency as a key solution.

    For decades, students had little way to know whether graduates of specific degree programs were landing good jobs after college. That started to change with the College Scorecard in 2015, a federal website that shares broad earnings outcomes for college programs. More recently, bipartisan legislation in Congress has sought to give the public even more detailed data.

    Lawmakers in North Carolina ordered a 2023 study on the financial return for degrees across the state’s public universities. It found that 93% produced a positive return, meaning graduates were expected to earn more over their lives than someone without a similar degree.

    The data is available to the public, showing, for example, that undergraduate degrees in applied math and business tend to have high returns at the University of North Carolina at Chapel Hill, while graduate degrees in psychology and foreign languages often don’t.

    Colleges are belatedly realizing how important that kind of data is to students and their families, said Lee Roberts, chancellor of UNC-Chapel Hill, in an interview.

    “In uncertain times, students are even more focused — I would say rightly so — on what their job prospects are going to be,” he added. “So I think colleges and universities really owe students and their families this data.”

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

    Source link

  • Is saving for your child’s education still worth it? The research says yes – MoneySense

    This uncertainty collides with harsh financial realities across every aspect of life. Families are already juggling mortgage payments, childcare costs, and rising living expenses in an increasingly expensive world. Add to this that the Canadian Scholarship Trust estimates a four-year university degree could cost as much as $192,000 by 2042.

    It raises a crucial question: Is putting your hard-earned dollars toward education savings still the right choice?

    The answer, according to extensive research, is a resounding yes—and the benefits extend far beyond what most parents realize.

    Post-secondary grads earn more, live longer, and give back more to society

    Post-secondary education—whether college, university, or apprenticeships—delivers powerful career advantages that remain robust even as the economy evolves. 

    Canadians with post-secondary credentials consistently enjoy higher employment rates and earn more than those with high school education alone. The income differences are substantial and persist throughout careers. 

    As automation and AI transform the workforce, education provides crucial protection. Research from Statistics Canada shows that only 3-4% of university graduates face high risk of job displacement, compared to 33% of workers without post-secondary education.

    But focusing solely on career benefits misses the fuller picture. Post-secondary education graduates live significantly longer and healthier lives, they’re less likely to smoke, they exercise more regularly, and they engage more actively in preventive healthcare. Graduates form more stable relationships and spend more time in enriching activities with their children. They vote more often, volunteer more frequently, donate to charity more generously, and engage more actively in civic organizations. Post-secondary education is associated with stronger families and communities across generations.

    Given these profound benefits, supporting your child’s post-secondary education is clearly important. But encouragement alone won’t cut it—starting to save early is essential because debt can undermine everything education promises to deliver.

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    How do RESPs work?

    Learn what they are and how to fund them

    The true cost of student loans goes beyond interest payments

    In Canada, post-secondary graduates who carry debt average tens of thousands of dollars in student loans. That burden doesn’t just take years to repay; it fundamentally alters life trajectories. Research shows debt-burdened graduates are pressured to prioritize immediate earnings over meaningful work, often abandoning initial interests in public service or nonprofit careers. They’re significantly less likely to start businesses due to fixed monthly obligations, and more likely to delay homeownership, marriage, and having children.

    Studies consistently link debt to increased anxiety, depression, and what behavioral scientists call a “bandwidth tax,” the constant mental load of financial worry that reduces cognitive capacity for critical decisions.

    But here’s the encouraging truth: That daunting parenting challenge is actually manageable, and the future is brighter than it might seem. Rather than trying to predict the future or guess which specific careers or skills will matter most, registered education savings plans (RESPs) offer an optimistic approach: invest in your child’s boundless potential to thrive in whatever world emerges. 

    RESPs can be used for university, college, apprenticeships, or a wide array of skills training programs, so you’re not betting on just one path. Instead, you’re ensuring your child graduates with the critical thinking, problem-solving abilities, and emotional resilience that will serve them well across any future scenario—and most importantly, the financial freedom to chase their dreams and seize opportunities we can’t even imagine yet.

    You can’t predict the future—but you can prepare your child to create it

    As computer scientist Alan Kay once said, “The best way to predict the future is to create it.” By saving early and consistently for your child’s education, that’s exactly what you’re doing, and it’s reason for tremendous optimism. You’re not trying to guess what your child’s world will look like, you’re empowering them to build it themselves, pursue their passions, and contribute to making the world better, whatever direction their interests and talents may take them.

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    Read more about education:



    About Peter Lewis


    About Peter Lewis

    Peter Lewis is the President and CEO of the Canadian Scholarship Trust Foundation (CST), a leading provider of education savings solutions in Canada. With over 30 years of service at CST, he is committed to enhancing access to post-secondary education for all Canadians.

    About Nathaniel Barr


    About Nathaniel Barr

    Dr. Nathaniel Barr is a cognitive psychologist and Professor of Creativity and Creative Thinking at Sheridan College. He holds a PhD from the University of Waterloo and his teaching, research, writing, and advising centre around the interaction of the human mind, emergent technology, and the future of work and education.

    Peter Lewis

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  • How to withdraw RESP funds – MoneySense

    As the RESP’s subscriber (the person who opened and contributed to the account), you may have questions about how to withdraw RESP funds and what the beneficiary (the student) can use them for. Most of the RESP commentary talks only notionally about the withdrawal process. Here are the specifics.

    What to know about RESP proof of enrollment

    When you’re ready to make a withdrawal, one of the first things the RESP promoter (the financial organization that offers the RESP) will ask for is proof of enrollment in eligible post-secondary studies. The processing time for this proof could vary, and the withdrawal may not be available immediately, so plan accordingly. 

    What post-secondary education is considered eligible?

    • Part-time studies in Canada must be at least three consecutive weeks and at least 12 hours per month.
    • Canadian full-time studies require at least three consecutive weeks with at least 10 hours of instruction or work each week. 
    • Full-time studies outside Canada must last at least three weeks for university programs, or 13 weeks otherwise. Part-time studies outside Canada do not qualify.
    • University, college, and trade school programs, amongst other post-secondary paths, can qualify.

    To check if your child’s school is eligible, see the list of designated educational institutions on the Government of Canada’s website.

    Proof of enrollment commonly accepted by RESP promoters includes:

    • Invoice for tuition or on-campus residence boarding
    • Official timetable from the school
    • Proof of Enrolment (POE) letter from the registrar’s office at the school
    • Official transcript from the school
    • Verification of Enrolment (VOE) form from the plan sponsor, completed by the registrar’s office at the school

    Where does RESP money go?

    The RESP promoter will ask if you want the funds to be sent by cheque or electronically to you, to the beneficiary child, or directly to a post-secondary institution. Most RESP subscribers choose to have the funds paid to them directly.

    There are two types of RESP withdrawals: 

    • Post-secondary education (PSE) withdrawals, which represent the principal contributions made to the account. These withdrawals are tax-free.
    • Educational Assistance Payments (EAPs), which represent both investment income and government grants. These EAP withdrawals are taxable to the beneficiary child.

    The tax treatment of the RESP withdrawal does not change regardless of the payee for the withdrawal, so the taxable income is always the beneficiary’s no matter who receives the payment. 

    When you take a withdrawal, you must decide on the allocation between these tax-free and taxable amounts.

    Using RESP withdrawals

    You generally do not need to provide proof of the cost of post-secondary education in order to take RESP withdrawals. The proof of enrollment is sufficient to permit a withdrawal, withone exception: If the withdrawal of taxable EAP amounts exceeds an annual limit, the RESP promoter will ask for proof that the costs exceed this threshold. In 2025, this limit is $28,881.

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    In the first 13 weeks of studies, there is an EAP limit of $4,000 for part-time studies and $8,000 for full-time studies. After that time, only the annual limit applies.

    Do you have to keep receipts when using RESP funds?

    No, you do not need to keep receipts related to education costs for withdrawal purposes or for tax purposes. There used to be a federal textbook tax credit that required receipts, but that was eliminated in 2017.

    The only documentation required for RESP withdrawal purposes is the above-mentioned proof of enrollment when requesting an RESP withdrawal or documentation for costs in excess of the annual EAP threshold if applicable.

    Use it or lose it

    If you wait too long to take RESP withdrawals, you may be hit with a penalty tax for unused EAP amounts remaining in the account. PSE withdrawals, representing past contributions, can come out tax-free. But any government grant portion of the RESP will be repaid if a child is no longer eligible—for example, if they decide not to continue with post-secondary education—or if you withdraw too little in the early years of their studies and they graduate or leave school before you use up the grants. 

    The income and growth portion of the RESP will be taxable upon withdrawal along with a 20% penalty tax. The taxable withdrawal and penalty tax are for the subscriber, not the beneficiary, which is particularly punitive for a high-income parent or grandparent.

    Subscribers can transfer up to $50,000 to their registered retirement savings plan (RRSP), subject to their eligible RRSP room, to avoid the taxable income inclusion.

    Compare the best RRSP rates in Canada

    Planning the timing of RESP withdrawals

    It is important to plan early for the timing of RESP withdrawals, ideally starting as early as five years before your child is due to graduate from high school. 

    If the RESP investments are too risky as the beneficiary approaches post-secondary education, there is a chance that stock markets could be down when the withdrawals are needed. RESP subscribers should consider reducing investment risk like stock market exposure as the time horizon lessens, because RESPs are generally fully withdrawn within four years or less. This creates a unique asset allocation strategy consideration that does not typically apply to retirement accounts withdrawn over a longer time horizon.

    Jason Heath, CFP

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  • FAFSA application is open for early testing. Here’s what to know.

    NEW YORK (AP) — The Free Application for Federal Student Aid for the 2026-27 school year has opened for a limited number of students as part of a beta test, the Department of Education says.

    The department is rolling out two beta testing phases before the application is fully available to everyone in October. At first, the FAFSA form will be available for a small number of students and families, chosen via existing partnerships with community organizations and schools.

    “We’re using this time to monitor a limited number of FAFSA submissions to ensure our systems are performing as expected,” the department said on Monday.

    In September, students will be able to request participation in the second phase of beta testing. Participation will be limited, so not everyone will be accepted, said the Education Department.

    Here’s what you need to know.

    How does the FAFSA work?

    The FAFSA is a free government application that uses students’ and their families’ financial information to determine whether they can get financial aid from the federal government to pay for college.

    The application will send a student’s financial information to the schools they are interested in attending. The amount of financial aid a student receives depends on each institution.

    The application is also used to determine eligibility for other federal student aid programs, like work-study and loans, as well as state and school aid. Sometimes, private, merit-based scholarships also require FAFSA information to determine if a student qualifies.

    When will the 2026-2027 FAFSA be available?

    The 2026–27 FAFSA form will be available to everyone by Oct. 1. The deadline to submit the FAFSA form is June 30, 2026.

    How can I prepare to fill out the FAFSA form?

    Students can start preparing to fill out the FAFSA now so they can complete it as soon as it’s available. The first step in the process is to create a studentaid.gov account and gather the following documents.

    —Social Security number

    —Driver’s license number

    —Alien registration number, if you are not a U.S. citizen

    —Federal income tax returns, W-2s and other records of money earned

    —Bank statements and records of investments

    —Records of untaxed income

    Who should fill out the FAFSA?

    Anyone planning to attend college next year should fill out the form. Both first-time college students and returning students can apply for the FAFSA.

    Students and parents can use the federal student aid estimator to get an early approximation of their financial package.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • Harris calls on the US ‘to turn the page on hatred and division’ as she crisscrosses Philadelphia

    Harris calls on the US ‘to turn the page on hatred and division’ as she crisscrosses Philadelphia

    PHILADELPHIA — PHILADELPHIA (AP) — Kamala Harris told a Philadelphia church congregation that the United States is “determined to turn the page on hatred and division” as she began crisscrossing the Democratic stronghold Sunday.

    Energizing supporters in the largest city in the swing state of Pennsylvania is crucial for Harris’ campaign, and she’s focusing on voters of color with a little more than a week to go before the Nov. 5 election.

    In her remarks to the predominantly Black audience at the Church of Christian Compassion, Harris drew on the story of the Apostle Paul, who overcome difficulties to spread the word of Jesus.

    “In hard times when we may grow weary in doing good, we must remember the power that works within us, the divine power that transformed Paul’s life, guided him through shipwreck and sustained him through trials,” Harris said.

    W. Lonnie Herndon, the church’s senior pastor, introduced Harris as “the voice of the future” and followed her remarks with a sermon about compassion and how “strong people never put others down, they lift them up.”

    “In nine days we’ll be able to do this,” Herndon said as he made the motion of turning a page. “Turn the page,” the congregation shouted in unison.

    “We are going to get out and vote,” he said as Harris listened from her seat in the front row. “And let me be crystal clear. We are not electing a pastor. We are electing a president that will deal with these divided United States, bring us back together.”

    After church, Harris told reporters that “Philadelphia is a very important part of our path to victory.”

    “It’s the reason I have been sending time here,” she said. “But I’m feeling very optimistic about the enthusiasm.”

    Harris then went to Philly Cutz, a barbershop in West Philadelphia, where she spoke to Black men about improving racial representation in education. A poster of Barack Obama, the first Black president, was on the wall.

    “We don’t pay teachers enough,” said Harris, who would be the second Black president and the first female president, if elected. “ Student loan debt is an issue.”

    Outside the shop, people stood on stoops and lined the sidewalks in hopes of catching a glimpse of Harris. “The MVP of the White House!” someone shouted.

    Harris visited Hakim’s Bookstore, which specializes in African American history.

    “It’s beautiful. It’s just so beautiful,” she said and asked to see good books for 6- and 8-year-old children, the same ages as her nieces.

    Harris also joked about her weight with Ann Hughes, the mother of Pennsylvania state Sen. Vincent Hughes.

    “They’re working me to the bone,” she said.

    The next stop was a Puerto Rican restaurant named Freddy and Tony’s, where Harris thanked volunteers and told them “we are going to win.”

    Harris has tried to keep the focus on abortion rights in the closing stretch of the campaign, including during appearances with Beyoncé and Michelle Obama. In an interview with CBS News that aired Sunday, Harris declined to say whether she would support any restrictions on abortion, emphasizing the need to restore Roe v. Wade.

    “It is that basic,” Harris said.

    The nationwide right to abortion was overturned two years ago by the conservative majority on the Supreme Court that included three justices nominated by Donald Trump while president.

    “My first priority is to put back in place those protections and to stop this pain and to stop this injustice that is happening around our country,” Harris said.

    She also brushed off Trump’s claim that he would not sign a national abortion ban if elected. “He says everything, come on,” Harris said. “Are we really taking his word for it?”

    Harris and Tim Walz, the Minnesota governor who is her running mate, are expected to visit all seven battleground states in the coming days, part of a final blitz before the election.

    While Harris was in Philadelphia on Sunday, her running mate was campaigning in Las Vegas. On Monday, Walz will visit Manitowoc and Waukesha, Wisconsin, before joining Harris for a rally in Ann Arbor, Michigan, where the singer Maggie Rogers is scheduled to perform.

    Harris will be in the nation’s capital on Tuesday to deliver what her campaign calls her “closing argument” in a speech from the Ellipse, a grassy space near the White House. It’s the same place where Trump spoke on Jan. 6, 2021, when the Republican called on his supporters to march on the Capitol.

    Walz is scheduled to campaign Tuesday in Savannah and Columbus in Georgia.

    Harris plans to visit North Carolina, Pennsylvania and Wisconsin on Wednesday. The event in Madison, Wisconsin, is expected to feature musical performances by Mumford & Sons and others.

    Walz will be in Charlotte and Asheville, North Carolina, that day.

    On Thursday, Harris will be in Nevada for rallies in Reno and Las Vegas, and in Phoenix. The band Maná will perform in Las Vegas and Los Tigres del Norte will perform in Phoenix.

    Walz plans to campaign in Harrisburg and Erie, Pennsylvania, and Detroit.

    ___

    Megerian reported from Washington.

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  • Harris stays quiet on student loans as cancellation loses its political luster

    Harris stays quiet on student loans as cancellation loses its political luster

    WASHINGTON — At a campaign rally in April, President Joe Biden told a Wisconsin crowd about his latest “life-changing” plan for student loan cancellation, promising financial relief for more than 30 million Americans.

    But Kamala Harris has steered clear of the issue at her political events since replacing Biden as the Democratic nominee for president. The vice president’s platform mentions it just twice, and with no specific plan. As she courts moderate voters, Harris has focused on policies targeting Americans without a college degree.

    “For far too long, our nation has encouraged only one path to success: a four-year college degree,” Harris said in September in Wilkes-Barre, Pennsylvania. “Our nation needs to recognize the value of other paths.”

    In the span of just a few years, student loan cancellation has gone from a pillar of the Democratic Party to a political liability. Once seen as a sure-fire way to energize young voters, the issue has now become a bludgeon wielded by Republicans who say it heaps advantage on elites and comes at the expense of those who repaid their loans or did not attend college.

    The issue came up just once in the September presidential debate, when Republican Donald Trump hammered Harris and Biden for failing to deliver their promise of widespread cancellation. The former president called it a “total catastrophe” that “taunted young people.”

    “They didn’t even come close to getting student loans,” Trump said.

    Biden, who once questioned the legality of mass student loan forgiveness, campaigned on the issue after progressives like Sen. Bernie Sanders, I-Vt., made it a mainstream idea. But as president, Biden has faced relentless challenges from Republican opponents. For the roughly 42 million people with federal student loans, hope of having them forgiven has turned into resignation and disillusionment.

    Biden’s first plan to cancel up to $20,000 for millions of people was blocked by the Supreme Court last year. A second, narrower plan has been halted by a federal judge after Republican-led states sued. A separate policy intended to lower loan payments for struggling borrowers has been paused by a judge, also after Republican-controlled states challenged it.

    On Friday, the Biden administration moved ahead with yet another attempt at student loan cancellation, this one focused on Americans who face heavy financial burdens beyond their student loans. It faces an uncertain future, arriving less than two weeks before the Nov. 5 election.

    The legal uncertainty has probably contributed to Harris’ de-emphasis of cancellation, said Michelle Dimino, education program director at the centrist think tank Third Way. It’s also an issue her base is familiar with, she added.

    “There’s not too much new she can offer before we know what will happen in the courts,” Dimino said. When Biden first pitched broad cancellation, it was something that hadn’t been tried. ”Now, it’s a totally different landscape than it was in 2020, when it was a clean slate.”

    Harris’ silence also signals the political risks, especially in a tight election. Any new promise of loan cancellation would energize Republicans who have made it a rallying cry. For voters who could benefit from cancellation, it’s a promise they have heard before.

    “The Harris campaign has realized this is not necessarily a winning political issue,” said Preston Cooper, a senior fellow at the American Enterprise Institute.

    “The student loan agenda is in tatters and hasn’t really helped them win any votes,” Cooper said.

    Even moderate Americans appear skeptical of student loan forgiveness. A June poll from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research found that 3 in 10 U.S. adults said they approve of Biden’s work on student debt, and it wasn’t much better among those repaying loans. Slightly more than half of Democrats said they supported the president’s work, while 18% of independents said the same.

    The Harris campaign declined to give specifics or answer questions about her cancellation plan.

    Her platform mentions student loans only after a full page of policies targeting workers without degrees. At the September rally in Pennsylvania, Harris drew applause when she said she would get rid of unnecessary degree requirements for federal jobs. She did not mention student loans in her 20-minute speech.

    “Requiring a certain degree does not necessarily talk about one’s skills,” Harris told the audience at Wilkes University, a private college in northeast Pennsylvania.

    Harris’ comments echo a traditional Republican talking point that has increasingly been embraced by Democrats as more Americans question the value of a college degree.

    “Student loan forgiveness is … maybe alienating some of the support that Harris is hoping to get from the non-college-educated,” said Andrew Gillen, a research fellow at the libertarian Cato Institute’s Center for Educational Freedom. “These kinds of polarizing topics are poisoning the well for other things that have bipartisan support. Once issues like student loan forgiveness are put to rest, I think a lot more of that bipartisan agreement will emerge.”

    It’s one of the few areas of common ground between Harris and Trump.

    In his platform, the former Republican president said he will “support the creation of additional, drastically more affordable alternatives to a traditional four-year college degree.” It doesn’t mention loans. Trump has opposed cancellation, saying it’s illegal.

    “President Trump will implement real solutions to make education, housing, and the cost of living affordable again for young people so they can live the American dream,” Karoline Leavitt, national press secretary for Trump’s 2024 presidential campaign, told the AP.

    Student loan advocates point to Trump’s vague promises, failure to fix Public Service Loan Forgiveness and appointment of the judges who stymied broad student debt relief. “Trump is proud of his work to hurt working families,” said Melissa Byrne, a political organizer who has pushed for cancellation.

    As attorney general in California, Harris led efforts to penalize for-profit colleges for defrauding borrowers. As a presidential candidate in 2019, Harris proposed a narrower path to loan forgiveness than those pushed by Sanders and Sen. Elizabeth Warren, D-Mass. Harris’ plan would have provided $20,000 in relief to any federal Pell Grant recipient who started a business in a disadvantaged community and kept it running for three years.

    After the Biden administration announced this month that it had canceled loans for more than 1 million public service workers, Harris issued a statement applauding the work, again generally promising to continue making “higher education more affordable.”

    Aissa Canchola Bañez, political director at Protect Borrowers Action, said Harris’ track record on student debt relief suggests that she would uphold the pledges made under Biden.

    “This is an issue that she has been working on since long before her time coming to Washington, D.C.,” Canchola Bañez said, pointing to the unprecedented amount of student loan debt forgiven under the Biden administration. “We’ve seen the vice president come out very forcefully applauding the relief that has come out thus far.”

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • Biden tries again at student loan cancellation, for those in financial hardship

    Biden tries again at student loan cancellation, for those in financial hardship

    WASHINGTON — The Biden administration is moving ahead with a new path to student loan cancellation for Americans who face steep medical bills, child care costs and other types of financial hardship that prevent them from repaying their loans.

    Announced Friday, the proposed rule is President Joe Biden’s third attempt at student loan cancellation as he faces repeated legal challenges from Republican states. His first plan was rejected by the Supreme Court last year, and his second plan has been temporarily halted by a federal judge in Missouri.

    The new rule would have to clear a number of hurdles before it becomes official, and it’s unclear if it could be realized before Biden leaves office in three months. Like Biden’s other loan forgiveness proposals, it could face court challenges from conservatives who say it’s unconstitutional and unfair.

    If finalized, the new rule would allow the Education Department to proactively cancel loans for borrowers if the agency determines they have an 80% chance of being in default on their loans within two years. Others could apply for a review to determine if they meet the criteria for cancellation.

    It’s meant to help borrowers who are unlikely to ever be able to repay their loans. The Education Department estimates about 8 million Americans would qualify for cancellation.

    “For far too long, our broken student loan system has made it too hard for borrowers experiencing heartbreaking and financially devastating hardships to access relief, and it’s not right,” said Education Secretary Miguel Cardona.

    Those who could be eligible include people with unexpected medical bills, high child care costs, heavy costs related to caring for relatives with chronic illnesses, and those struggling financially in the wake of natural disasters, the Education Department said.

    Virginia Foxx, R-N.C., chair of the House Education and the Workforce Committee, called it a “sham plan” designed to curry voters ahead of the presidential election.

    “The latest blatant attempt to bribe voters is the hallmark of a desperate administration that’s squandered the chance to make meaningful, lasting reform when it comes to college costs,” Foxx said in a statement.

    Under the proposal, the department could use a range of factors to judge whether someone is likely to fall into default on their loans. It includes household income, age, whether they receive public benefits, and their overall debt — not just from student loans.

    It also allows consideration of “any other indicators of hardship identified by the Secretary.” A loan is usually considered in default if no payment has been made in about nine months.

    With about 1 million borrowers in default every year, Cardona said the new rule would prevent his agency from trying to collect money it’s unlikely to recoup.

    “Servicing and collecting on defaulted loans is not free, it costs taxpayer dollars,” Cardona said in a call with reporters. “And there’s a point when the cost of trying to collect on a defaulted loan just is not worth it.”

    The proposal will enter a 30-day public comment period before it could become official. The administration said it plans to finalize the rule in 2025. It faces an uncertain future arriving less than two weeks before the Nov. 5 presidential election.

    Vice President Kamala Harris, the Democratic nominee, has not detailed her plans for student debt cancellation if she wins the presidency. Republican nominee Donald Trump has called Biden’s cancellation proposals unfair and illegal.

    Biden’s latest proposal is the result of a federal rules process that included experts from across higher education. Advocates pushed hard for the hardship provision, saying too many borrowers get trapped with debt they’ll never be able to repay.

    The Biden administration said it has authority under the Higher Education Act, which allows the education secretary to waive debt in certain cases. It also noted that other federal agencies routinely waive debts owed to them, considering factors like “good conscience” and equity.

    It’s a similar legal argument used to justify Biden’s second attempt at student loan forgiveness, which proposes relief for groups of borrowers including those with large sums of interest and those with older loans. A federal judge in Missouri blocked that plan amid a legal challenge from Republican states.

    Biden campaigned for the White House on a promise of new student loan cancellation, but his biggest plans have been halted by Republican opponents. Last year, the Supreme Court rejected a plan to forgive up to $20,000 for millions of Americans after several Republican states sued to block it.

    Amid its legal battles, the administration has increasingly shifted attention to its work canceling student loans using existing programs, including one for public service workers. In total, the administration says it has now canceled $175 billion for about 5 million borrowers.

    The hardship provision was originally discussed as part of the second-attempt plan that’s now on hold in Missouri, but the Education Department broke it off into its own proposal to spend more time on the details.

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • Biden’s student loan cancellation is free to move forward — for now — as a court order expires

    Biden’s student loan cancellation is free to move forward — for now — as a court order expires

    WASHINGTON — President Joe Biden’s latest attempt at student loan cancellation is free to move ahead — at least temporarily — after a judge in Georgia decided that a legal challenge should be handled by a court in Missouri.

    Biden’s plan has been on hold since September after seven Republican-led states challenged it in federal court in Georgia. But on Wednesday, a federal judge decided not to extend the pause and instead dismissed Georgia from the lawsuit, finding that it lacked the legal right, or standing, to sue.

    U.S. District Court Judge J. Randal Hall opted to send the suit to Missouri, one of the remaining states in the case. On Thursday, those states filed a request asking the Missouri court to block the plan.

    Without a new obstacle, the Biden administration could push the proposal toward the finish line as soon as Friday. The Education Department would be free to finalize a rule paving the way for cancellation, though it would likely take days or weeks to carry out.

    Biden’s plan would cancel at least some student loan debt for an estimated 30 million borrowers.

    It would erase up to $20,000 in interest for those who have seen their original balances increase because of runaway interest. It would also provide relief to those who have been repaying their loans for 20 or 25 years, and those who went to college programs that leave graduates with high debt compared to their incomes.

    Biden told the Education Department to pursue cancellation through a federal rulemaking process after the Supreme Court rejected an earlier plan using a different legal justification. That plan would have eliminated up to $20,000 for 43 million Americans.

    The Supreme Court rejected Biden’s first proposal in a case brought by Republican states including Missouri, which now takes the lead in the latest lawsuit.

    In his order Wednesday, Hall said Georgia failed to prove it was significantly harmed by Biden’s new plan. He rejected an argument that the policy would hurt the state’s income tax revenue, but he found that Missouri has “clear standing” to sue.

    Missouri is suing on behalf of MOHELA, a student loan servicer that was created by the state and is hired by the federal government to help collect student loans. In the suit, Missouri argues that cancellation would hurt MOHELA’s revenue because it’s paid based on the number of borrowers it serves.

    In their lawsuit, the Republican states argue that the Education Department had quietly been telling loan servicers to prepare for loan cancellation as early as Sept. 9, bypassing a typical 60-day waiting period for new federal rules to take effect.

    The courts are now asking the Missouri court to act quickly saying the Education Department could “unlawfully mass cancel up to hundreds of billions of dollars in student loans as soon as Monday.”

    Also joining the suit are Alabama, Arkansas, Florida, North Dakota and Ohio.

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • School tax: What can you claim as a deduction on your annual income tax? – MoneySense

    School tax: What can you claim as a deduction on your annual income tax? – MoneySense

    The tuition tax credit

    Claim the tuition credit to receive a non-refundable credit worth 15% of your tuition claim on the federal portion of your taxes. Provincial tax returns each have their own rules surrounding this claim for a combined benefit that’s bigger, depending on where you live. British Columbia (5.06%), Nunavut (4%), Northwest Territories (5.9%), Nova Scotia (8.79%), Newfoundland and Labrador (8.7%) and Prince Edward Island (9.8%) also have an education amount for you to claim.

    Tuition fee transfer to parents and supporters

    If you don’t need the credit to bring your non-refundable credits up to the same level as your taxable income, thereby reducing your taxes to zero, the unused tuition amount may be transferred (at least in part) to your spouse or other supporting individual up to a maximum of $5,000. If you don’t have anyone to transfer the tuition to (or wish not to transfer), the unused tuition may be carried forward to be used in a future year. The bottom line is that you’ll get a credit for about 25% of your tuition, depending on your province of residence, but you will only benefit from this non-refundable tax credit if you have taxable income.

    What is the Canada Training Credit?

    The Canada Training Credit allows for a tax credit for tuition or other fees paid to an eligible university, college or other certified post-secondary level educational institution in Canada, providing courses for an occupational, trade or professional examination. If you have both tuition fees and are eligible for a Canada Training Credit, you can claim a refundable credit for the lesser of one-half of your tuition and your Canada Training Credit entitlement, plus you can claim a portion of your tuition fee credit if you need it. It’s important to always file a tax return to earn this notional credit, which increases each year by $250, to a lifetime maximum of $5,000. To claim the CTC you must be over 25 and under 66 and meet certain income requirements, described below:

    Income criteria 2024 2023 2022 2021 2020
    Minimum working income $11,511 $10,994 $10,342 $10,100 $10,000
    Maximum net income from prior year $165,430 $144,625 $151,978 $150,473 $147,667
    Accumulated CTC balance $1250 $1000 $750 $500 $250

    How to use the disability supports deduction

    Starting with the 2024 tax year, the disability supports deduction has been expanded to include new deductible expenditures. Students can claim this amount to offset taxable employment, self-employment, scholarships, fellowships, research grants or other qualifying income if they have a mental or physical impairment. The deduction cannot be shared with a supporting individual and the same expenses cannot be claimed for the medical expenses credit if they are claimed as a disability supports deduction.

    There is a long list of qualifying expenses; here’s what’s new for 2024:

    • For those with a severe and prolonged impairment in physical function, the costs of an ergonomic chair (as well as the costs of an assessment), bed positioning devices (again, as well as the cost of an assessment) and a mobile computer cart
    • For those with an impairment in physical or mental function, an alternative input device for computers and a digital pen device

    Also claimable this year, a navigation device for those with vision impairment, and memory or organizational aids for those with memory impairment.

    Other tax assistance students may claim

    And there’s more that students and supporters can claim.

    • Scholarship exemptions
      These exemptions come with varying criteria depending on whether you are a full-time or part-time student or have received an artist’s project grant.
    • Research grants
      You can claim expenses paid to do research including travelling costs, the cost of an assistant or costs for certain equipment or lab fees. But the amounts can’t exceed the grant, for tax purposes. 
    • Moving expenses
      Full-time students can claim moving expenses only if there is income at the new location from taxable scholarships, fellowships, bursaries, prizes and like income, employment or self-employment, and you move 40 kilometres or more closer to the educational institution.
    • Child-care expenses
      This will reduce net income, which in turn can increase refundable tax credits, like the federal GST/HST credit, and the Canada Child Benefit, the Canada Workers Benefit (which can’t be claimed by full time students unless the student is a parent), and some provincial credits. But if the student is not taxable, the higher income earner, in the case of a couple, may qualify for a claim. Likewise, these expenses may reduce income to a level that enables a tuition transfer to a supporting person like a spouse.
    • Medical Expenses
      There is a long list of qualifying expenses including service animals or tutoring services that can help students to support their studies (medical practitioner must provide verification). Other eligible costs include private insurance premiums, eyeglasses, contact lenses, prescriptions, the incremental costs of gluten-free food, and much more. Check it out and keep your receipts.

    How are RESP withdrawals taxed?

    Finally, those fortunate enough to have a registered education savings plan (RESP) can withdraw money from the plan to go to school. But the amounts are taxable to the student. Full-time students can now withdraw $8,000 during the first 13 consecutive weeks of enrolment; part-time students can withdraw $4,000 in that time. After this, there is no limit, unless the beneficiary takes a 12-month break from studies. In that case, the $8,000 limit is reinstated. Both full- and part-time students now may receive payments for up to six months after the end of their studies if the expenses would have qualified during the study period.

    Evelyn Jacks, RWM, MFA, MFA-P, FDFS

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  • Micro-credentials in Canada: Is it worth it to upskill? – MoneySense

    Micro-credentials in Canada: Is it worth it to upskill? – MoneySense

    These digital-first bragging rights are known as micro-credentials, and they’re booming right now. Micro-credentialing has been accelerated by the pandemic-driven demand for online learning, job-seekers’ efforts to upskill or reskill, and educational institutions’ desire to attract more students. 

    If you’re looking to increase your skill set or stand out from a sea of job candidates, micro-credentials could be a worthwhile investment—plus, you may qualify for financial assistance or tax credits. The trick is to choose a micro-credential program that’s right for you and your goals.

    What is a micro-credential? 

    A micro-credential is similar to a certificate or a degree, but more targeted and with less of a time commitment. Essentially, it’s a skills or learning upgrade that is focused on helping workers meet the needs of employers—or, conversely, of helping employers find or train workers with the skills they need. And it’s a recorded achievement: you earn a badge or certificate, or something else to prove you earned each particular credential.

    Micro-credential programs are often offered by universities and colleges, but you’ll also find programs from major employers like IBM and Salesforce, specialty providers such as FutureLearn and Coursera, and non-profits. Many other individuals and organizations offer learning and training programs, too: you might see courses available from your favourite finance blogger, or from organizations like Raw Signal Group and The Trauma of Money. Since trustworthiness is a key factor in micro-credentials, institutions that already have that trust baked in are well placed to flourish in this relatively new industry. Whether you choose to go with an accredited educational institution or a startup depends on what you want to learn and why.

    What are people most interested in when it comes to micro-credentials? According to Google data from early August 2024, top searches include:

    1. PMP (project management professional)
    2. CPR (cardiopulmonary resuscitation)
    3. Food handler
    4. Food safety
    5. BLS (basic life support)
    6. CSM (certified scrum master)
    7. WHMIS (Workplace Hazardous Materials Information System)
    8. Smart Serve certification (responsible liquor training program for Ontario)
    9. Cybersecurity certifications
    10. Google certification

    And the top-searched topics on eCampusOntario’s Micro-credentials Portal over the past 12 months are: 

    1. Project management 
    2. Accounting 
    3. Data 
    4. Leadership 
    5. Business 
    6. Payroll 
    7. Health 
    8. Marketing 
    9. Mental health 
    10. Finance 
    11. Human resources 
    12. Data science 
    13. Law 
    14. Python 
    15. Construction 
    16. Education 
    17. Writing 
    18. Digital marketing 
    19. Healthcare 
    20. Cybersecurity 

    According to the Higher Education Quality Council of Ontario (HEQCO), the two defining features of micro-credentials are a narrow scope and a short completion time. That makes efficiency the primary appeal of micro-credential programs. Degrees take years to complete and often contain requirements that are superfluous for those in mid-career. And, of course, many Canadians simply don’t have the resources to take extended time off to upgrade their skills or go back to school full-time. 

    Micro-credential programs are appealing in other ways, too. Many are offered online or in a hybrid format, meaning students can complete them on their own schedule. Micro-credentials also tend to be timely and relevant, so that people can acquire competencies they can use immediately. Canada-based programs can be a useful bridge for newcomers trying to localize their international skill sets and experience. Plus, they’re more affordable than traditional in-depth education and skills programs. In essence, they’re mini-programs that offer you what you need, when you need it—and no more.

    Kat Tancock

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  • Biden administration cancels another $1.2 billion in student loans for public service workers

    Biden administration cancels another $1.2 billion in student loans for public service workers

    The Biden administration is cancelling an additional $1.2 billion in student loans for borrowers who work in public service through changes to an existing forgiveness program.

    The relief for roughly 35,000 borrowers was announced Thursday by the Education Department and made through changes to the Public Service Loan Forgiveness program, which benefits workers such as teachers, nurses and firefighters. Those qualifying for forgiveness have their remaining loan balance eliminated after making 120 qualifying monthly payments.

    “These 35,000 borrowers approved for forgiveness today are public service workers — teachers, nurses, law enforcement officials, and first responders who have dedicated their lives to strengthening their communities, and because of the fixes we made to Public Service Loan Forgiveness, they will now have more breathing room to support themselves and their families,” Biden said in a statement.

    The public service forgiveness program was created by Congress in 2007, but many borrowers were not able to get the cancellation they had worked towards due to strict rules and mistakes by loan servicers in tallying their payments. Under the Biden administration, some rules were adjusted and retroactively gave many borrowers credit toward their 10 years of payments.

    The announcement comes amid legal back and forth over the administration’s larger plans for student loan forgiveness, which faces challenges from Republican-led states. In June, judges in two federal cases opposing the new SAVE plan, which included lowered monthly payments and a faster path to forgiveness, issued injunctions stopping the plan from going into effect.

    But shortly after, the 10th Circuit Court of Appeals issued a stay in one of the lawsuits, allowing the Education Department to move ahead with lowered monthly payments.

    Biden’s original plan for one-time debt cancellation was overturned by the Supreme Court, which said the move overstepped the president’s authority.

    With this latest round of loan cancellation, the administration has now forgiven $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946,000 million borrowers through the public service forgiveness program.

    ___

    The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • State passes bill encouraging school districts to ban students’ phone use during day

    State passes bill encouraging school districts to ban students’ phone use during day

    HARRISBURG, Pa. — Pennsylvania’s Senate on Wednesday approved a bill to encourage school districts to start a pilot program that effectively bans students’ use of cellphones during the school day in an effort to improve their mental health and academic performance.

    The bill, which passed 45-5, would authorize grants to school districts to buy locking bags after the district creates a policy requiring students to leave their phones in such bags for the whole school day. It now goes to the state House for consideration.

    The bill’s sponsor, Republican state Sen. Ryan Aument of Lancaster, said he hopes that limits on phone use will result in improvements in students’ mental health and academic performance.

    “Kids spend so much time on social media and using their smartphones that it’s taking a toll on them mentally, emotionally and academically. Smartphone restrictions have proved successful in reversing these trends,” Aument said.

    Under the bill, the policy must provide exemptions for students who have a documented medical condition that requires them to use a cellphone. Participating school districts must track changes over two school years in student mental health, bullying, violence and academic performance.

    Grants would be awarded by the Pennsylvania Commission on Crime and Delinquency, and separate legislation would be required to set grant amounts and devote money to the purpose.

    Most schools already have rules regulating student phone use. But a growing number of state officials have begun endorsing school cellphone bans, and such legislation is emerging in other states.

    Last year, Florida became the first state to crack down, passing a law requiring public schools to ban student cellphone use during class time and block access to social media on district Wi-Fi networks. Some districts went further and banned phones for the entire school day.

    California allows school districts to limit or ban the use of smartphones by students while at school, and the Los Angeles Unified School District board voted last month for the district to develop such a policy.

    The Pennsylvania bill’s passage in the state Senate comes two weeks after U.S. Surgeon General Vivek Murthy called on Congress to require warning labels on social media platforms and their effects on young people.

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