Personal Finance
Judge blocks Biden’s new student loan forgiveness plan before launch
U.S. President Joe Biden speaks as he announces a new plan for federal student loan relief during a visit to Madison Area Technical College Truax Campus, in Madison, Wisconsin, U.S, April 8, 2024.
Kevin Lamarque | Reuters
Earlier this summer, millions of federal student loan borrowers got a promising email. The Biden administration informed them that debt forgiveness was on the way and that they may be eligible.
However, before the U.S. Department of Education could publish its final rule on the debt relief and start to carry out its new sweeping loan forgiveness plan, a Republican-led challenge has managed to at least temporarily block the relief.
Here’s what we know so far.
Relief plan blocked until at least mid-September
On Sept. 5, U.S. District Judge Randal Hall in Augusta, Georgia, issued a temporary restraining order against President Joe Biden‘s second effort to cancel student debt for millions of Americans. The Biden administration had previously tried to offer sweeping student debt forgiveness in 2022.
Hall, appointed by former Republican President George W. Bush, was responding to a lawsuit against the relief package brought by seven Republican-led states a few days earlier. The states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio — said the U.S. Department of Education’s new debt cancellation effort, like its previous attempts, is illegal.
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Hall said the states had made a convincing case that the department was overstepping its authority, and blocked the Biden administration from moving forward with its plan until a Sept. 18 hearing.
“The court has only issued a temporary restraining order and the scope of the order is not clear,” said Luke Herrine, an assistant professor of law at the University of Alabama.
It appears the administration can still proceed with finalizing the rule and preparing to cancel the debt, Herrine said. But it likely won’t be able to start forgiving the loans until the courts decide on the rule’s legality, which could take months, experts say.
The Department of Education did not immediately respond to a request for comment.
In June 2023, the Supreme Court ruled that Biden’s attempt to cancel around $400 billion in federal student debt was unconstitutional. Immediately after, Biden vowed to find another way to deliver relief to borrowers.
Biden’s first attempt to forgive student debt was through an executive action. This time, his administration has pursued the regulatory process, a lengthier route that it hoped would make its relief package more immune to legal challenges.
It was not expected to publish its final rule on its revised student loan forgiveness plan, which could impact more than 25 million Americans, until October. However, in their lawsuit, the state attorneys general said they had discovered evidence that the Education Department had ordered federal loan servicers to begin erasing the loans as early as Sept. 3.
Yet it’s unlikely the Biden administration would break the rules of the regulatory process timeline, legal experts said.
“I strongly doubt that this allegation is true,” Herrine said.
Most likely, the administration had told the loan servicers to prepare to forgive the debt once the rule is finalized, he said.
Borrowers in limbo, again
For now, the future of the Biden administration’s new wide-scale student loan forgiveness plan is uncertain.
The Biden administration’s new affordable repayment plan for student loan borrowers, known as SAVE, is also tied up in the courts from a barrage of GOP-legal challenges. Those enrolled in the plan are excused from making payments for the time being.
As things stand, most of the Biden administration’s hopes to deliver relief to borrowers ahead of the 2024 presidential election are now stalled.
That may be part of the point, Herrine said.
“The GOP knows that student debt cancellation is popular and they want to prevent the Biden administration from doing popular things,” Herrine said.
Nitat Termmee | Moment | Getty Images
The U.S. job market isn’t looking too hot for recent college graduates and other job seekers, according to economists and labor experts.
“The job market is kind of trash right now,” said Mandi Woodruff-Santos, a career coach and personal finance expert.
“I mean, it’s really difficult,” she added. “It’s really difficult for people who have many years of experience, so it’s going to be difficult for college kids.”
‘Tough summer’ for job seekers
That may seem counterintuitive.
The national unemployment rate in May was relatively low, at 4.2%. The layoff rate has also been historically low, suggesting employers are holding on to their workers.
Yet, hiring has been anemic. The pace of employer hiring in April was the lowest in more than 10 years, since August 2014, excluding the early months of the Covid pandemic.
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The rate at which workers are quitting — a barometer of worker confidence about their job prospects — has also plummeted to below pre-pandemic levels, a stark reversal from the “great resignation” in 2021 and 2022.
“It will be a tough summer for anyone looking for full-time work,” Heather Long, chief economist at Navy Federal Credit Union, wrote in an e-mail Friday.
“This is an ‘abundance of caution economy’ where businesses are only filling critical positions and job seekers, especially recent graduates, are struggling to find employment,” she said.
Steady job market erosion ‘cannot continue forever’
While the job market may be limping along by some measures, Long also said a recession doesn’t seem “imminent.”
Businesses added more jobs than expected in May, for example. But those gains have slowed significantly — a worrisome sign, economists said.
Employers appear reluctant to hire in an uncertain economy.
CEO confidence plummeted in the second quarter of 2025, seeing its largest quarterly decline on record dating to 1976, according to a survey by The Conference Board. Uncertainty around geopolitical instability, trade and tariff policy were the largest business risks, according to Roger Ferguson Jr., the group’s chair emeritus.
The share of CEOs expecting to expand their workforce fell slightly, to 28% in Q2 from 32% in Q1, and the share planning to cut their workforce rose 1 point, to 28%.
“The steady erosion in the US job market cannot continue forever — at some point, there will just not be much left to give,” Cory Stahle, an economist at the Indeed Hiring Lab, wrote in an analysis Friday.
“In a low-hiring, slow-growth environment, employers can only hold onto their existing employees for so long before they too will have to be let go — increasing unemployment even as job opportunities continue to shrink,” Stahle wrote.
Don’t underestimate personal connections
Don’t underestimate the “power of personal connections” to help get noticed in a competitive job market like this one, said Woodruff-Santos, the career coach.
Her No. 1 piece of advice: Make yourself “uncomfortable” in order to network and build professional relationships.
“You need to put yourself in situations where you may not know everybody, you may not know one person, where you may actually need someone to give you a bit of a helping hand, and to feel confident and OK doing that,” Woodruff-Santos said.
If you’re pushed to accept a job you don’t love to make ends meet, make a plan to keep current in the field to which you aspire, she said.
In other words, build the skills that will eventually help you get that job, perhaps by taking a training course, getting a certificate or doing contract work, she said. Also, consider joining a professional organization, putting yourself in the same room as people in your desired field and with whom you can connect, she said.
These steps raise your chances of getting attention from future employers and keeping your skills sharp, Woodruff-Santos said.
She also had some words of encouragement.
“The job market has been trash before,” she said. “It’ll be trash again. This probably won’t be your first trash job market. And you’re going to be OK.”
WASHINGTON DC, UNITED STATES – MAY 30: United States President Donald Trump departs at the White House to U.S. Steel’s Irvin Works in West Mifflin, Pennsylvania in Washington D.C May 30, 2025.
Celal Gunes | Anadolu | Getty Images
As the Senate weighs President Donald Trump‘s multi-trillion-dollar spending package, a lesser-known provision tucked into the House-approved bill has pushback from Wall Street.
The House measure, known as Section 899, would allow the U.S. to add a new tax of up to 20% on foreigners with U.S. investments, including multinational companies operating in the U.S.
Some analysts call the provision a “revenge tax” due to its wording. It would apply to foreign entities if their home country imposes “unfair foreign taxes” against U.S. companies, according to the bill.
“Wall Street investors are shocked by [Section] 899 and apparently did not see it coming,” James Lucier, Capital Alpha Partners managing director, wrote in a June 5 analysis.
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If enacted as written, the provision could have “significant implications for the asset management industry,” including cross-border income earned by hedge funds, private equity funds and other entities, Ernst & Young wrote on June 2.
Passive investment income could be subject to a higher U.S. withholding tax, as high as 50% in some cases, the company noted. Some analysts worry that could impact future investment.
The Investment Company Institute, which represents the asset management industry serving individual investors, warned in a May 30 statement that the provision is “written in a manner that could limit foreign investment to the U.S.”
But with details pending as the Senate assesses the bill, many experts are still weighing the potential impact — including who could be affected.
Here’s what investors need to know about Section 899.
How the ‘revenge tax’ could work
As drafted, Section 899 would allow the U.S. to hike existing levies for countries with “unfair foreign taxes” by 5% per year, capped at 20%.
Several kinds of tax fall under “unfair foreign taxes,” according to the provision. Those include the undertaxed profits rule, which is associated with part of the global minimum tax negotiated by the Biden administration. The term would also apply to digital services taxes and diverted profits taxes, along with new levies that could arise, according to the bill.
The second part of the measure would expand the so-called base erosion and anti-abuse tax, or BEAT, which aims to prevent corporations from shifting profits abroad to avoid taxes.
“Basically, all businesses that are operating in the U.S. from a foreign headquarters will face that,” said Daniel Bunn, president and CEO of the Tax Foundation. “It’s pretty expansive.”
The retaliatory measures would apply to most wealthy countries from which the U.S. receives direct foreign investment, which could threaten or harm the U.S. economy, according to Bunn’s analysis.
Notably, the proposed taxes don’t apply to U.S. Treasuries or portfolio interest, according to the bill.
‘Strong priority’ for House Republicans
Section 899 still needs Senate approval, and it’s unclear how the provision could change amid alarm from Wall Street.
But the measure has “strong support” from others in the business community, and it’s a “strong priority” for Republican House Ways and Means Committee members, Capital Alpha Partners’ Lucier wrote.
House Ways and Means Committee Chairman Jason Smith, R-Mo., first floated the idea in a May 2023 bill, and has been outspoken, along with other Republicans, against the global minimum tax.
If enacted as drafted, Section 899 could raise an estimated $116 billion over 10 years, according to the Joint Committee on Taxation.
That could help fund other priorities in Trump’s mega-bill, and if removed, lawmakers may need to find the revenue elsewhere, Bunn said.
However, House Ways and Means Republicans may ultimately want foreign countries to adjust their tax policies before the new tax is imposed.
“If these countries withdraw these taxes and decide to behave, we will have achieved our goal,” Smith said in a June 4 statement.
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