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Millions of borrowers to see student loan payments drop in July after SAVE adjustment

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In July, borrowers enrolled in the SAVE plan will have their payments calculated using 5% of their income.  (iStock)

President Joe Biden’s Saving on a Valuable Education (SAVE) plan has lowered student loan payments for 153,000 borrowers. In July, the plan is set to drop payments even more for nearly every borrower enrolled.

The plan uses a borrower’s income to determine payment amounts. Until July, the formula considers 10% of a borrower’s discretionary income when calculating these monthly payments. Starting on July 1, the repayment formula will start basing payments on 5% of borrowers’ income instead, lowering the payment of every person enrolled in the SAVE plan. 

This drop to 5% only applies to those paying down undergraduate student loans. For borrowers with a mix of undergraduate and graduate loans, they’ll pay a weighted average of between 5% and 10% of their income.

The same forgiveness applies under the plan. After 20 or 25 years, depending on whether borrowers have graduate loan debt, the remaining balance of the loans is forgiven. This includes retroactive payments borrowers made before they enrolled in the SAVE plan.

If you have private student loans, federal relief doesn’t apply to you, but you can potentially lower your payments by refinancing. Visit Credible to find your personalized interest rate without affecting your credit score. 

BIDEN CANCELS $1.2 BILLION IN STUDENT LOANS FOR BORROWERS ENROLLED IN SAVE

Some borrowers have until 2025 to apply for forgiveness

Parents who take out Parent PLUS loans for their children are eligible for a loophole that could lower their payments. However, this loophole is set to end in 2025.

Unfortunately, Parent PLUS loans don’t qualify for President Biden’s SAVE plan, but they do qualify for consolidation options. The loophole they qualify for is called double consolidation.

Parents essentially consolidate each of their loans twice and, in the end, do become eligible for the SAVE plan. For those with two or more Parent PLUS loans, parents can consolidate them into two separate Direct Consolidation loans. After these consolidations, parents can then consolidate those two loans into a single Direct Consolidate loan that’s eligible for SAVE plan enrollment.

For parents who have a Parent PLUS loan and other federal loans, the process is similar. The Parent PLUS loan needs to be consolidated first and then that loan and the rest of the federal loans get consolidated together in a Direct Consolidation loan, which is also eligible for the SAVE plan.

If you don’t have federal student loans that qualify for these programs, refinancing can also help save you money. You can use Credible to compare student loan refinancing rates from multiple private lenders at once.

SOME STUDENT LOAN BORROWERS ARE BOYCOTTING PAYMENTS, BUT THE RISK IS HIGH: SURVEY

Thousands of defrauded student loan borrowers set to get checks from the FTC

Many borrowers who were taken advantage of by debt relief scammers will receive a check in the mail soon to refund some of the money they lost.

The Federal Trade Commission plans to send more than $4.1 million in refunds to 27,584 consumers affected by these scams. 

These consumers were lured into fake forgiveness claims by sham companies such as Mission Hills Federal, Federal Direct Group, National Secure Processing and The Student Loan Group.

The 2019 complaint the FTC filed alleged that these companies got borrowers to pay thousands of dollars in illegal fees and falsely claimed they would lower payments for borrowers.

These fraudulent companies also tricked consumers into sending payments directly to them, saying they were going to take over the servicing of borrowers’ loans.

Recipients of these checks will need to cash their checks within 90 days, which should be indicated on the check.

“Don’t trust anyone who contacts you promising debt relief or loan forgiveness, even if they say they’re affiliated with the Department of Education,” the FTC advised.

“Scammers try to look real, with official-looking names, seals and logos,” it continued. “They promise special access to repayment plans or forgiveness options — which don’t exist. If you’re tempted, slow down, hang up and log into your student loan account to review your options.”

If you want help lowering your monthly student loan payments, consider refinancing your loans into a private loan with a lower interest rate. To see if refinancing is right for you, view this rates table from Credible that compares rates from multiple lenders at once.

STUDENT LOAN PAYMENTS HINDER RETIREMENT SAVINGS – HERE’S HOW EMPLOYERS ARE HELPING

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Apple iPhone assembly in India won’t cushion China tariffs: Moffett

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Street's biggest Apple bear says a production move to India is unrealistic

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.

Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.

He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”

Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.

“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.

Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.

“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”

Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.

“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”

Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.

“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”

According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.

“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”

Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.

To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

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Warren Buffett’s top stock picks come with 15% income bonus in new ETF

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Invest like Buffett: VistaShares CEO on new ETF that follows the investor

In a year that hasn’t been kind to many big-name stocks, Warren Buffett’s Berkshire Hathaway is standing near the top. Berkshire shares have posted a 17% return year-to-date, while the S&P 500 index is down 6%.

That performance places Berkshire among the top 10% of the U.S. market’s large-cap leaders, and the run has been getting Buffett more attention ahead of next weekend’s annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska. It’s also good timing for the recently launched VistaShares Target 15 Berkshire Select Income ETF (OMAH), which holds the top 20 most heavily weighted stocks in Berkshire Hathaway, as well as shares of Berkshire Hathaway. 

Berkshire is currently the biggest holding in the ETF, at 10.6% of the fund. Other top holdings in the ETF from among the ranks of Berkshire’s biggest bets include Apple, American Express, Kroger, VeriSign, Bank of America, Citigroup, Visa and of course Coca-Cola, a long time favorite of the man known as the Oracle of Omaha.

“It’s a really well-balanced portfolio chosen by the most successful investor the world has ever seen,” Adam Patti, CEO of VistaShares, said in an appearance this week on CNBC’s “ETF Edge.”

Berkshire’s outperformance of the S&P 500 isn’t limited to 2025. Buffett’s stock has tripled the performance of the market over the past year, and its 185% return over the past five years is more than double the performance of the S&P 500.

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Berkshire Hathaway is one of 2025’s top performing stocks.

In addition to this long-term track record of success in the market, Berkshire Hathaway is getting a lot of attention right now for the record amount of cash Buffett is holding as he trimmed stakes in big stocks including Apple, which has proven to be a great strategy. The S&P 500 has experienced extreme short-term volatility since President Donald Trump’s inauguration on January 20. Even after a recent recovery, the S&P is still down 8% since the start of Trump’s second term.

“The market has been momentum driven for many years, the switch has flipped and we’re looking at quality in terms of exposure, and Berkshire Hathaway has performed incredibly well this year, handily outperforming the S&P 500,” said Patti.

Berkshire Hathaway famously doesn’t pay a dividend, with Buffett holding firm over many decades in the belief that he can re-invest cash to create more value for shareholders. In a letter to shareholders in February, Buffett wrote that Berkshire shareholders “can rest assured that we will forever deploy a substantial majority of their money in equities — mostly American equities.”

The lack of a dividend payment has been an issue over the years for some shareholders at Berkshire who do want income from the market, according to Patti, who added that his firm conducted research among investors in designing the ETF. “Who doesn’t want to invest like Buffett, but with income?” he said.

So, in addition to being tied to the performance of Berkshire and the stock picks of Buffett, the VistaShares Target 15 Berkshire Select Income ETF is designed to produce income of 15% annually through a strategy of selling call options and distributing monthly payments of 1.25% to shareholders. This income strategy has become more popular in the ETF space, with more asset managers launching funds to capture income opportunities and more investors adopting the approach amid market volatility.

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More Americans buy groceries with buy now, pay later loans

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People shop for produce at a Walmart in Rosemead, California, on April 11, 2025. 

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said. 

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.  

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once. 

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.” 

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers. 

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts. 

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