In 2022, President Biden announced a plan to deliver on campaign promises and relieve up to $400 billion in student debt for tens of millions of borrowers. Last summer, the Supreme Court blocked that plan. Since then, the Biden administration has unveiled a series of new debt relief programs; if all of them are implemented, they would provide relief to more than 30 million borrowers and forgive $153 billion in loan debt. But some of those plans face legal challenges, too.

If you’re managing student loan debt — and especially if you’re struggling to keep up with payments — you may have questions about recent proposals and what they mean for you. Here, we highlight the key points. 

The pandemic-era suspension of federal loan payments and interest concluded last fall. Is there anything I should know now that payments have resumed?

As borrowers transition out of the payment pause, the U.S. Department of Education is extending them an “on ramp” period. During this period, which stretches from October 1, 2023, to September 30, 2024, the agency will not report missed loan payments to the credit-reporting companies (Equifax, Experian and TransUnion) and will not place overdue loans in default or collections. 

Now that interest is accruing on loans once again, it’s worth noting that you may be able to deduct up to $2,500 a year on your federal tax return for interest paid on student loans. You can also get a discount of 0.25 percentage point on your interest rate if you set up automatic payments on your loan servicer’s website. 

To make sure you’re up to date on your loan’s status, log in to your account at StudentAid.gov and verify that your contact information is current. There’s a chance your loan was transferred to a new servicer — the company that manages your billing and payments — during the payment pause, so you’ll also want to locate your current loan servicer and make sure that it has the correct information on file for you. 

The Supreme Court struck down Biden’s major loan forgiveness plan. What other measures has the government taken to provide debt relief?

In an April announcement, the Biden administration outlined a variety of new debt reduction and loan forgiveness policies. For people who owe more than they borrowed, the plan would automatically forgive the part of their balance that exceeds the original loan amount, up to $20,000 per loan. You might fall into this group if your monthly payment amount didn’t cover the interest charges that were accruing, or if you’ve incurred fees for overdue payments.

Additionally, for low- and middle-income borrowers enrolled in income-driven repayment plans, the new policy would forgive any debt that was added to their balances while they were on a repayment plan. And another proposed rule would automatically forgive your undergraduate loans if you entered repayment on or before July 1, 2005, and your graduate debt if you entered repayment on or before July 1, 2000. According to the announcement, the Department of Education could finalize these new policies and make them available to borrowers as soon as this fall. But some of the proposed rules may face legal challenges.

The administration has taken steps to remedy issues that were preventing qualified borrowers from receiving relief, too. For example, fixing inaccuracies in the number of qualifying payments some borrowers made on income-driven repayment plans has resulted in automatic debt forgiveness for the affected borrowers.

The administration also processed long-pending claims for Borrower Defense Loan Discharge, which helps borrowers who attended schools that closed down or practiced misconduct. (Borrower Defense, however, is also in legal limbo; you can still apply for it and be approved, but the program is under a federal court injunction until November 2024, meaning the new rules won’t go into effect and no debt can be forgiven before then.) Additionally, the administration expanded eligibility for the Public Service Loan Forgiveness program and is working to identify more students who qualify for Total and Permanent Disability Discharge.

You can stay on top of policy updates by periodically checking StudentAid.gov and ED.gov for announcements.  

I’ve heard about the SAVE plan. How does it work?

SAVE (Saving on a Valuable Education) is an income-driven repayment plan that went into effect last year. Like other IDR plans, SAVE bases your monthly payment on income and family size. But if your payment isn’t large enough to cover accrued monthly interest, your loan balance doesn’t increase; instead, the government covers any unpaid interest, helping borrowers avoid the scenario of owing more on their loans than they borrowed. 

For nearly all borrowers, SAVE will lower their monthly payments more than any other IDR plan, according to the Office of Federal Student Aid. And according to President Biden, 8 million borrowers have already benefited from using SAVE, with 4.5 million of them now paying $0 a month. 

SAVE could lower payments even further starting this summer, when new elements of the program are scheduled to go into effect. Beginning July 1, the amount of income used to calculate payments will be cut in half for borrowers with only undergraduate loans and can be cut by up to half for borrowers with a mix of graduate and undergraduate loans. 

On top of that, borrowers on the SAVE plan can have their loans forgiven in as little as 10 years. If you borrowed $12,000 or less, you’ll receive forgiveness after you make the equivalent of 10 years of payments. For every $1,000 you borrowed above the $12,000 mark, forgiveness is available after an additional year. So if you originally borrowed between $12,001 and $13,000, your loan can be forgiven after 11 years.

As of April, 18 states had filed lawsuits to block the SAVE plan, with some states claiming student debt forgiveness is illegal and others claiming it is an extraordinarily expensive policy. Their legal arguments have yet to unfold, but depending on the outcome of the lawsuits, elements of the SAVE plan could change. In the meantime, you can learn more about SAVE at https://studentaid.gov/announcements-events/save-plan.

What are the other options for loan forgiveness?

While some new loan forgiveness policies are up in the air, several programs are more firmly in place to cancel debt for qualified borrowers.

If you’re on an IDR plan other than SAVE, your loan balance will automatically be forgiven after you make either 20 or 25 years’ worth of payments (depending on the plan), including some periods when a $0 payment was required. And there are certain programs that discharge debt even sooner. A variety of borrowers may currently qualify for these special forgiveness programs, including teachers, medical professionals and other public servants. You could also be eligible for loan forgiveness if you have a total and permanent disability or if your school closed while you were enrolled. 

Each loan forgiveness program has different requirements for the number of payments you have to make before qualifying, the amount of debt that can be forgiven, and how to apply. With the Public Service Loan Forgiveness Plan, for example, the balance on your Direct Loans can be forgiven if you make 120 qualifying payments while working full-time in a public service role for the government or a nonprofit. To apply, you’ll need to have your employer sign a form to certify your work experience. With the Teacher Loan Forgiveness Program, you can have up to $17,500 forgiven on certain loans if you teach full-time for five consecutive academic years in a low-income school or educational service agency.

You can see a full list of forgiveness programs at https://studentaid.gov/manage-loans/forgiveness-cancellation. To find all the application forms, go to https://studentaid.gov/forms-library. 

I’m struggling to keep up with loan payments. What should I do?

Start by exploring your options with income-driven repayment plans. Depending on your financial situation, IDR plans can drop your payment to $0 a month. And unlike some deferment and forbearance plans, IDR plans let you continue earning credit toward loan forgiveness for the months you’re on them. To apply for an IDR plan, including SAVE, or to change your plan, visit https://studentaid.gov/idr. You can also use the loan simulator at https://studentaid.gov/loan-simulator to see a preview of what you qualify for. 

If you go on an IDR plan, remember to recertify (in other words, submit information about your family size and income) annually. Doing so helps to ensure you’re on the most suitable plan available and prevents you from being automatically placed on a default payment plan. If your income decreases, be sure to recertify right away.

If an IDR plan isn’t adequate, and you have a Direct Loan, FFEL Program loan or Perkins Loan, you can apply for deferment or forbearance. Deferment pauses your payments for several months or years when you’re facing certain hardships, such as losing your job or undergoing cancer treatment. Interest continues to accrue on unsubsidized loans when you’re in deferment, but it’s deferred on subsidized loans. 

Forbearance suspends your loan payments for up to 12 months at a time while you’re facing a qualified hardship. But interest charges still accrue on both subsidized and unsubsidized loans under forbearance, so borrowers should check to see whether they qualify for deferment before applying. If you want to apply for deferment or forbearance, reach out to your loan servicer. 

If you need help navigating your loan accounts or applying for relief, avoid working with any company that charges a fee for those services—it might be running a scam. Instead, call the Federal Student Aid Information Center at 800-433-3243 or reach out to your loan servicer. You can also talk to a certified credit counselor or student loan counselor to get free advice on loan payoff strategies. You can find one through the National Foundation for Credit Counseling, at NFCC.org. 

Can I consolidate multiple federal loans into one?

Yes. With a Direct Consolidation Loan from the Department of Education, you can combine multiple loan accounts, and doing so could potentially reduce your overall monthly payment. On top of that, you won’t lose your progress toward loan forgiveness if you consolidate. However, consolidating doesn’t reduce the interest you pay. 

Perhaps most importantly, a Direct Consolidation loan can give you access to more federal relief. If, for example, your loans don’t qualify for a SAVE plan or for Public Service Loan Forgiveness (federal Perkins Loans and FFEL Program loans aren’t eligible), you can consolidate into a Direct Consolidation Loan and then apply. 

What are my options if my student loan is already in default?

Student loans typically go into default once you fall behind on payments by nine months or more. At present, the Fresh Start program can be a huge help for borrowers who have defaulted. 

Fresh Start can “rehabilitate” your loan, or remove it from collections and make it current again. And unlike the rehabilitation option that it’s temporarily replacing, you don’t have to make a series of new payments in order to qualify. The Fresh Start program is available only through September 30, 2024, and it’s much easier to enroll in it than in other rehabilitation programs. Just note that it takes about four to six weeks to have your loan transferred out of collections once you enroll.

Another benefit of using Fresh Start is that the Department of Education will remove the record of default from your credit reports, which could give your credit scores a significant boost. If you’re experiencing debt-collection efforts, such as having your wages garnished, those efforts will stop as well. On top of that, you can apply for IDRs and loan forgiveness plans after using Fresh Start to rehabilitate your loan. To enroll in this program, visit MyEDDebt.ed.gov or call 800-621-3115.

When the Fresh Start program expires, the previous rehabilitation option will go back in place. You can use the traditional rehabilitation option once per loan. However, if the Department of Education reinstates the same rules as before, borrowers will need to make nine monthly payments to have a loan rehabilitated. Alternatively, you can get a loan out of default by paying it off with a Direct Consolidation Loan. But to qualify, you may have to make three payments on the defaulted loan. 

Are Parent PLUS loans eligible for relief or other assistance?

If you took out a Parent PLUS loan to cover your child’s tuition, help is available for you, too. Parents can apply to defer payments while their child is enrolled in school at least half-time, and for up to six months after the schooling ends. Interest will continue to accrue during deferment.

There are also multiple payment plans available for parent borrowers. To be eligible for the income-based payment plan, also known as Income-Contingent Repayment, you’ll have to first consolidate your PLUS loan into a Direct Consolidation Loan. But as an added benefit, your loan balance can be forgiven after 25 years on an ICR, and you’ll have a better chance of qualifying for Public Service Loan Forgiveness.

What about private loans?

If you don’t qualify for the assistance you want from the government, you might be tempted to refinance your federal loans through a private lender, such as a bank, school or other lender outside the federal government. But weigh your decision carefully. Moving your debt to a private loan means permanently forfeiting a host of relief options, including any future federal programs that go in place, as well as a variety of IDRs that can help you if your financial situation changes.

Private lenders are not required to offer you any assistance or loan forgiveness, and they’re not likely to have income-based payment options. But if you have a private loan, you might have access to a hardship program, such as an extended repayment plan or forbearance, depending on your lender. To find out what your lender offers, call the customer service number on your loan statement. Be sure to ask about fees, interest charges and potential credit damage before agreeing to any new payment arrangement.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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1. Preparing the document every 18-year-old should have.

One of the most important financial decisions parents and their adult children going to college should consider is a financial power of attorney (POA), which authorizes an agent to act on the student’s behalf in financial matters. Like most adults, students should have a POA — and an attorney available to discuss their needs and state requirements — to ensure that their finances can be taken care of in various situations.

Additionally, parents and students should consider a health care POA, which allows an individual to appoint another person to make medical decisions on their behalf if they become incapacitated or unable to communicate. This is not a financial document, but it should be viewed as just as important as a financial POA.

A POA grants a trusted individual the legal authority to make decisions and take actions if the student is unable to do so themselves. Since college students may be living away from home, having a POA ensures that someone can manage their affairs promptly and effectively in the event of timely financial matters or legal issues. It offers peace of mind to both the student and their parents when they are not physically present.

A financial POA can be drafted with broadly or narrowly defined terms of their choosing. The two types are:

A durable power of attorney takes effect immediately upon execution and remains valid even when the holder becomes incapacitated. It’s important to have a POA that’s durable because it may avoid the expensive and time-consuming process of waiting for a guardian to be court-appointed. A durable POA can be revoked or amended at any time as long as the holder is competent.

A “springing” power of attorney can take effect upon a determination of the holder’s incapacity by one or more physicians. This can be trickier and more time-consuming than a durable POA. For a college student away from home, a durable POA is often the better and more flexible option.

2. Getting access to information and setting financial expectations for students.

While the Family Educational Rights and Privacy Act of 1974 (FERPA) states that post-secondary institutions may provide info to a parent, the student must grant access. Colleges determine what the students can allow parents to see, financial information and/or academic records. When a child is selecting an institution, parents should research what information will be made readily available to them and what their child must sign to allow them access.

From there, parents can openly communicate with their child and set clear expectations based on finances, grades and performance. Financial best practices that parents can set for college students include creating a budget to track income and expenses and setting an allowance. This can include an allowance timeline, expectations around the amount of money they will receive and how it should be spent, and how their educational responsibilities directly impact their allowance (i.e., meeting specific grade requirements).

For many students, they have relied on their parents to handle the big-ticket items (college expenses, transportation and housing, etc.). They most likely do not have a credit score, as students aren’t allowed to have a credit card in their name without a verified income until they’re 21 years old. Gone are the days of credit card companies signing college students up on their first day of school. This is certainly a good thing, as students won’t have the opportunity to rack up credit card debt without any actual income.

But it also means that many students are leaving college with little to no credit history. This affects them after graduation, particularly if they’re looking to rent. There are options available to help students learn responsible lending habits and to build credit, such as secured credit cards (with a deposit that matches the limit), cards that require a co-signer or adding a student as an authorized user on a parent’s card. These allow a student to learn responsible lending and build credit.

3. Ensuring some financial education.

Each tip comes down to one thing: financial literacy. There’s no better time to ensure that children have a basic understanding of financial topics than when they’re going off to college. Many students may begin being exposed to topics that may impact their financial health, especially when inflation is an issue. In fact, in a WalletHub survey, 79% of college students said their financial literacy improved due to inflation.

When sending a child off to college, parents are helping them make decisions about their professional future, so it only makes sense to equip them for success in their financial future as well. While students are preparing for dorm life, enrolling in classes and more, parents should prioritize meaningful discussions on financial matters with them — to ensure that there are clear expectations while on campus and to lay the groundwork for long-term financial independence.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice. This information is for educational purposes only and should not be interpreted as legal opinion or advice.

SEI Private Wealth Management is an umbrella name for various wealth advisory services provided through SEI Investments Management Corporation, a registered investment advisor.

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As a parent or grandparent, you can help your graduate navigate the job market. Here are five ways to support them in their job search, starting with sitting down and having a conversation.

1. Have a candid conversation about job hunting

Shortly after graduating, it's important to have a candid conversation about the current job market and your child's career goals. It makes sense that most grads want jobs in their degree field. However, when just starting out, that may not be possible. By discussing their expectations, the demand for jobs in a specific field, and the application process, you can provide valuable guidance to get them moving in the right direction.

2. Acknowledge aspirations versus reality

A federal survey released this week by the Bureau of Labor Statists (BLS) revealed that total job openings had slowed to a three-year low in March. Although employers added 175,000 jobs in April, those numbers are below what many analysts expected. 

Not all industries are hiring. However, healthcare, retail, wholesale, transportation and warehousing are all seeing gains. If your graduate earned a degree in a field with few job openings, you may need to steer them in another direction for a short time, even if it's outside their immediate area of interest. They will gain work experience, which will look good on their resume and set them up for future success.

3. Offer resume help

Many graduates struggle with creating professional-sounding resumes. As a parent or grandparent who has likely written resumes before, your experience can help them craft a quality resume highlighting their education, skills, and relevant experience, setting them apart from other applicants. 

They may ask a friend or roommate for copies of their resumes, but often, these samples are not focused on a specific job and don’t align with their education or skill set. Since your grad may lack job experience, suggest they highlight their education. They may also have completed an internship, volunteered, or worked part-time. It’s not unusual for your child to miss a critical skill or accomplishment relevant to a position, which you can suggest they add.

Creating a beautifully crafted resume is no longer enough to land many jobs. With the advent of AI resume screeners, applicants must learn the tricks to help them make the first cut. 

4. Help them explore their options

Post-graduation, encourage your graduate to explore all their options. That may include entering the workforce right away, volunteering for a time, pursuing further education, or relocating to another part of the country or another part of the world. Considering all their options after graduation allows your graduate to decide what’s best for them based on their degree and interests, rather than choosing a path based on what they think is expected. 

5. Assist with a LinkedIn profile

More than 30% of all job listings posted on LinkedIn, a social networking website for people in professional occupations, are for entry-level positions, meaning many of these jobs apply to someone with little or no work experience. LinkedIn is also a great place to network with other percent grads.

Building a strong LinkedIn profile helps your graduate stand out to potential employers. You can help by providing guidance on creating a professional profile and leveraging the platform for job opportunities. Since this can be overwhelming, you can also help by offering clear directions, finding similar profile examples on the site and highlighting ways they, as an individual, can stand out.

Best of all? You can connect your own LinkedIn profile with your graduate's profile to instantly expand their network. Even if you have worked in a different field, the more people your graduate can ask for help, the better. 

Key insights

• In the past month, “Why is it so hard to find a job?” has been a popular search phrase trending in the U.S. 
• There has been a 235% increase in search interest for “How to use AI to write a resume” over the past year, and “AI for interview prep” has been a breakout search over the past month in the U.S. 
• Search interest for “online university” is up by 115%, making it a top trending topic for “career growth” over the past year in the U.S. 
• The search term “promotion” is currently at an all-time high in the U.S., and “dry promotion” (which comes with more responsibilities, a new title but no raise) has been a top trending related search over the past year. 

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Assets in 529 plans grow tax-deferred, and distributions from them are tax-free as long as they’re used to pay qualified educational expenses for the beneficiary, such as tuition, fees and books.

Another attractive benefit is that the owner of the plan can change the beneficiary whenever they want to.

That’s why some parents establish and fund a single 529 plan to help pay for the college costs of all of their children. This can be useful for parents of children with significant age gaps.

However, it’s not a good strategy if you have more than one child in college at the same time. Why? Because each 529 plan can only have one beneficiary at a time.

Here’s another reason: If you’re planning on using the Free Application for Federal Student Aid (FAFSA) to apply for financial aid for your child, the value of a 529 plan you own may negatively impact the amount of financial aid your child is eligible for.

A potential problem solver for parents

Establishing separate custodial 529 plans for each child, or splitting one large 529 plan up into separate, smaller custodial 529 plans, may help solve both of these problems.

Here’s why: Recent updates to FAFSA have eliminated certain benefits that sometimes resulted in lower out-of-pocket college costs for parents with multiple children in school or for divorced or separate parents.

Let’s take a look at these key changes and then discuss how 529 plans fit into the process.

The all-important 'out-of-pocket-expenses' number

In the ’olden days’ it was called the Expected Family Contribution, or EFC. Now it’s called the Student Aid Index, or SAI. Basically, it means the same thing — the percentage of a student’s college costs FAFSA determines that the student (or, more accurately, their parents) should pay out of pocket, based on the applicant’s income and assets.

Higher income usually results in a higher SAI, which usually translates into less financial aid (and, thus, higher out-of-pocket costs).

Supposedly the updated FAFSA process is more beneficial because it allows more of your own income and your child’s income to be left out of SAI calculations.

However, this update also removed certain longtime benefits that previously resulted in lower out-of-pocket costs.

No more benefits for parents with several kids in college at the same time

In the past, FAFSA would reduce your parental EFC if you had two or more children in college.

Now, FAFSA no longer cares how many kids you have in school when calculating your overall SAI. This could significantly raise your out-of-pocket expenses, especially if your family income is $100,000 or more.

No more 'who you live with' benefits for divorced parents

When parents are divorced or separated, only one parent needs to report their income and assets in FAFSA. In the past, this parent would be the one at whose home their dependent college student child was living. If this parent had significantly lower income than their ex-spouse, this could result in a lower EFC — and thus more financial aid.

Now, it doesn’t matter where the dependent child lives. FAFSA now requires the filer to be the parent who provides the most financial support for the child.

As before, only that parent needs to report their income and assets. But if they’re making much more money than their ex, this could result in a higher SAI.

Assets count, too

In addition to income, FAFSA also considers a family’s net worth. Parents and children must enter the value of all of their liquid assets, including money in bank accounts, CDs, taxable investment accounts and, yes, their own 529 plan accounts.

Retirement accounts and real estate don’t need to be included. Also, 529 plans established by grandparents with their grandchildren as beneficiaries don’t need to be entered in FAFSA, either.

This impact can be considerable. Student-owned assets can increase the SAI by 20% of the asset value. After certain allowances, the value of parental assets can increase the SAI by up to 5.64% of the assets’ amount.

Considering that married parents no longer receive “sibling breaks” and divorced or separated parents can no longer take advantage of “who our child lives with” benefits, it may be in everyone’s best interests to try to lower the financial aid-reducing impact of assets.

Where do 529 plans fit into all this?

If you own one 529 plan that was originally meant to help pay for the college costs of all your children, its overall value could work against you if you’re trying to maximize each child’s eligibility for financial aid.

That’s because when you’re using FAFSA to apply for financial aid for one 529 plan beneficiary, you have to enter the entire value of the 529 plan, even if you’ll only be using a small portion of it to pay for that child’s college expenses.

This same issue exists even if you’re the account owner for separate 529 plans you’ve established for each of your dependent children. You’ll have to include the value of all of these separate 529 plan accounts as parental assets even if you’re only filing a FAFSA for one child.

Fortunately, there may be a solution

You may be able to get around this issue by splitting a large 529 plan into separate custodial 529 plans for each dependent child. With custodial accounts, each child is both the account owner and beneficiary.

If you already own separate 529 plans for each child, you could transfer all of the money out of each plan to establish a new custodial 529 plan for each child.

These transfers are done through full or partial direct 529 rollovers. In most cases, these rollovers are tax-free if you’re moving these assets into a 529 plan in the same state, although you’ll want to confirm this with your 529 plan provider.

Using this method, you’ll only have to enter the value of one child’s smaller custodial 529 plan into FAFSA when you’re applying for financial aid for that child. The assets in those plans will still be considered parental assets for SAI calculation purposes.

This strategy can be particularly beneficial if you have more than one dependent child in college at the same time. Since you file separate FAFSAs for each child, you’ll only have to include the value of their individual custodial 529 plan account in each separate application.

But — it might be not a good solution for CSS filers

Some colleges require parents and students seeking financial aid to file a CSS Profile as well as a FAFSA. The CSS Profile is used by some colleges and scholarship programs to award non-federal financial aid to students in need. Each college that requires applicants to fill out the CSS Profile may use a different methodology to weigh the impact of parental and student assets on aid decisions.

Other issues to consider

Considering that FAFSA only counts a maximum of 5.64% of parental assets in its calculation of SAI, establishing separate custodial 529 plans may not significantly reduce out-of-pocket expenses.

Also keep in mind that if you split one large 529 plan into several different custodial 529 plans, you may have to pay enrollment fees and annual account maintenance fees for each plan. You’ll have to decide how the investments in each plan should be invested. And you’ll have to manage distributions from each plan and keep track of gifts to each plan made by you or other people.

And, if you have younger children, there’s a chance that at some point FAFSA may make more changes to its methodologies that reduce or eliminate the potential SAI-reducing benefits of this strategy.

That’s why before you make any changes to your 529 plans, you may want to speak to an accountant or a financial adviser to determine whether this strategy makes sense for you.

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Before embarking on this exciting journey, it's crucial to consider several key financial aspects to ensure a smooth transition into the professional realm.

Start with budgeting basics

Establishing a budget is the cornerstone of financial stability. Before your first paycheck arrives, take the time to outline your expected income and expenses. Consider essential costs, such as rent, utilities, groceries, transportation and any debt payments. Differentiate between needs and wants to allocate your resources effectively.

Tools like budgeting apps, such as You Need a Budget, or spreadsheets can streamline this process, helping you track your spending and identify areas that need adjusting.

Make sure you understand compensation packages

As you delve into the job market, it's vital to comprehend the components of your compensation package beyond the base salary. Take note of additional perks, including health insurance, retirement plans and stock options. Evaluate their significance in the context of your overall financial goals. 

For instance, the pros of a comprehensive health plan might outweigh the cons of a slightly lower salary, providing valuable coverage in the event of illness or injury.

Make the most of debt-management strategies

If you're carrying student loans or other debts, strategize a repayment plan that aligns with your income level. Explore options such as income-driven repayment plans or loan consolidation to alleviate the burden without compromising your financial stability. 

Prioritize high-interest debts to minimize long-term interest payments and accelerate your journey toward financial freedom.

Set aside an emergency fund

Building an emergency fund serves as a safety net during unforeseen circumstances like medical emergencies, car repairs or job loss. Aim to set aside three to six months' worth of living expenses in a separate savings account. Start small and gradually increase your contributions over time. Even modest monthly deposits can accumulate into a substantial reserve, providing peace of mind in times of crisis.

Invest in your future

While retirement may seem distant, it's never too early to start saving. Take advantage of employer-sponsored retirement plans, such as 401(k)s or IRAs, especially if your employer offers matching contributions. Maximize your contributions to capitalize on these incentives and harness the power of compound interest over time. Diversify your investment portfolio to mitigate risk and optimize long-term returns.

Keep taxes under consideration

Understand the implications of taxation on your income and investments. Familiarize yourself with tax brackets, deductions and credits applicable to your situation. Explore tax-efficient strategies to minimize your tax liability, such as contributing to retirement accounts or utilizing tax-advantaged savings vehicles like health savings accounts (HSAs) or flexible spending accounts (FSAs).

Don’t fall for lifestyle inflation

As your income increases, resist the temptation to succumb to lifestyle inflation (aka lifestyle creep). Avoid unnecessary expenses and prioritize saving and investing for your future goals. Set realistic expectations, and differentiate between fleeting indulgences and enduring fulfillment. Cultivate a mindset of financial prudence and delayed gratification, ensuring sustainable wealth accumulation over time.

Engage in continued learning and growth

Invest in yourself through ongoing education and skill development. Enhance your earning potential by pursuing certifications, advanced degrees or professional development opportunities. Stay abreast of industry trends and market demands to remain competitive in the job market. 

Allocate resources toward personal growth initiatives that yield long-term dividends in your career trajectory. It could be as simple as investing in a few self-help books to work on things like your communication skills, taking up a hobby that dovetails with your field or hiring a career coach.

Seek professional guidance

Don't hesitate to seek advice from financial professionals or mentors who can offer personalized insights tailored to your circumstances. Whether it's a CERTIFIED FINANCIAL PLANNER™ professional, tax adviser or seasoned professional in your field, leverage their expertise to navigate complex financial decisions with confidence. Collaborate with trusted individuals who have your best interests at heart, empowering you to make informed choices aligned with your goals.

Cultivate financial wellness

Ultimately, achieving financial well-being is a journey rather than a destination. Cultivate healthy financial habits and adapt to evolving circumstances throughout your career. Embrace a mindset of fiscal responsibility, resilience and abundance, regardless of the challenges you may encounter along the way. Remember that financial success is not solely defined by monetary wealth but by the freedom to pursue your passions and live a fulfilling life on your terms.

Embarking on your first job marks the beginning of a transformative chapter in your life. By proactively addressing key financial considerations, you can pave the way for a prosperous and fulfilling future. Take charge of your financial destiny, seize opportunities for growth and embark on a journey toward financial empowerment and prosperity.

Justin Stivers is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Stivers Law is a separate entity and not affiliated with CoreCap Advisors. The information provided here is not tax, investment or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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529 plans

A 529 plan is a tax-advantaged savings account designed to be used for a beneficiary's education expenses. These plans allow a contributor to prepay a beneficiary's qualified higher education expenses at an eligible educational institution or to contribute to an account for paying those expenses. And while 529 contributions have to be made with after-federal-tax money, the contributions grow free from federal or state tax.

Andy Esser, an Edward Jones Financial Advisor in Durham, NC said in a statement: “As a financial advisor and parent, I see first-hand the varying benefits of 529 funds – no matter what path a child may choose. Educating families on those benefits leads to more impactful results.”

But many are missing out on the benefits of a 529 plan, including tax-free growth, gift tax benefits, the opportunity to rollover unused funds into a Roth IRA and the ability to use the 529 Grandparent Loophole to fund a grandchild’s education without impacting their financial aid eligibility. 

According to a study from Edward Jones, 50% of Americans don’t know what a 529 plan is. More specifically, out of all Americans who are actively saving for a child’s education, 32% are unaware of what a 529 plan is, and 60% do not feel they’re saving enough to reach their goals for future education expenses. 

The study also found that in order to reach education savings goals, Americans have turned to several other strategies, including using a personal savings account (35%), scholarships (18%), federal or state financial aid (18%) and getting a job at a school or university for tuition benefits (9%). The rising cost of tuition, rulings about college admissions criteria and the increase in applicants at numerous colleges are all factors driving individuals to save for their children’s education. 

Surprisingly, however, 84% have not or do not plan to invest in a 529 plan as part of their education savings strategy.

Rising cost of college

College tuition has indeed skyrocketed. According to Best Colleges, using data from the NCES, the average cost of college tuition in the U.S. for undergraduate students has more than tripled over the last 58 years, rising from $4,648 in 1963 to $14,307 in 2021, after accounting for inflation. And from 2010 to 2021, tuition and fees rose by 17%, jumping from $12,214 to $14,307.

Furthermore, the College Board reports that in 2022-23, the average cost of tuition and fees for a full-time undergraduate student at a public four-year in-state college was $10,940, while the average cost for a student at a public four-year out-of-state school was $28,240. 

Over 43 million Americans carry federal student loan debt, with an average balance of almost $40,000. By starting early and saving for your child's or grandchild's college in a 529 account, you can help them avoid the heavy burden of student loans later on in life. The sooner you start, the better.

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Job-related scams

Fraudsters are using artificial intelligence and social media to target people who are looking for work, and their tactics are increasingly sophisticated. Many of the schemes offer “work from home” opportunities, an old scam that has taken on new life now that more people than ever work remotely. Some scammers go so far as conducting fake 45-minute interviews, according to the FTC. 

The perpetrators profit by eliciting personal information that can be used to commit identity theft or by asking victims for up-front payments. Both are red flags, the FTC says. 

• If a recruiter asks for your Social Security or bank account number before providing details about the position, the job offer is a scam. 
• If you are not sure whether an advertised position is legitimate, contact the company through a website or phone number you know is legitimate, not the link that the questionable recruiter provided. 

Top 10 riskiest scams

For its annual ranking of riskiest scams, the BBB evaluates them based on three factors: the volume of reports it received, the percentage of reports that involved monetary losses and the amount of monetary losses reported. 

As in the past, investment swindles, including those involving cryptocurrency, topped the BBB’s ranking of riskiest scams, with victims reporting median losses of $3,800 in 2023. Victims were often urged to buy, trade or store digital assets in fraudulent exchanges, the BBB says. 

For the first time, social media was the most common method perpetrators used to contact victims who reported a monetary loss. Social media was often used to perpetrate romance scams, with median losses rising more than 150% since 2022. Fraudsters typically hijack photos and information from real people to create fake profiles on online dating sites, which are then used to build relationships with their targets. Some persuade victims to invest in cryptocurrency; others request cash for fictional emergencies. 

In 2022, nearly 70,000 people reported to the FTC that they lost money to romance scams, with losses totaling $1.3 billion. Regulators say actual losses are likely much larger because many victims are reluctant to acknowledge that they’ve fallen for a romance hoax. 

BBB riskiest scams

1.  Investment/cryptocurrency

2.  Employment

3.  Online purchase

4 . Home improvement

5.  Romance

6.  Advance fee loan

7.  Phishing/social engineering

8.  Credit repair/debt relief 

9.  Tech support 

10.  Travel/vacation/timeshare 

The Better Business Bureau calculates a risk index for scams based on the volume of reports it receives, the percentage of reports that led to monetary losses, and the amount of monetary losses.

Other popular scams

Credit-repair and debt-relief scams made the top 10 list for the first time since the BBB launched its Scam Tracker tool in 2016. In a typical scam, victims are told they must pay an up-front fee for a variety of services, including removing negative items from their credit reports or negotiating with credit card companies to eliminate debt. 

A request for an up-front fee before services are provided is a big red flag, the Consumer Financial Protection Bureau says. Likewise, the CFPB says any business that claims it can remove accurate information on your credit report is fraudulent. Legitimate credit counselors can help you improve your credit, but they won’t promise to wipe away credit report blemishes that are supposed to be there.

Loan-forgiveness scams are also on the rise, as outlaws target individuals who are struggling to pay their debts. In March, the FTC sent $1.4 million in refunds to more than more than 27,000 student loan borrowers who paid hundreds of thousands of dollars in illegal up-front fees to a bogus outfit that promised to lower their monthly loan payments. 

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Soft skills have been defined as intrinsic individual traits, attitudes and habits that prompt how efficiently people interact and navigate different contexts. AI, on the other hand, is typically software designed to mimic human tasks and skills. Technical skills are specific skills related to functions or tools required to perform tasks. AI is already making a positive impact in accounting by:

• Automating routine tasks, reducing errors and increasing efficiency
• Providing valuable insights from large financial data sets, enabling informed decision-making
• Detecting fraud and identifying areas for improvement
• Optimizing resource allocation, reducing waste and saving costs
• Helping ensure compliance with laws, policies and regulations, reducing legal risks

As AI continues to advance, it will bring significant changes to the accounting profession. Accountants who combine technical expertise with soft skills like communication, critical thinking, creativity, adaptability and collaboration will be better equipped to work alongside AI and drive success in their firms. Embracing AI and soft skills will become essential for accountants to remain competitive and provide high-quality services in the future.

How soft skills in accounting can supplement AI

Although they are from different ends in the continuum, soft skills and AI are inseparable because they considerably complement each other. These indispensable human skills, guiding decision-making in leadership, co-relate with AI's data-driven tasks to make critical organizational decisions. In addition, soft skills complement AI by enhancing problem-solving agility in the advent of complexities. Also, soft skills, the cornerstones of creativity and innovation, support AI during process optimization by proposing creative ideas the latter cannot. 

Moreover, soft skills complement AI in accounting by critically analyzing its proposals to ensure they align with acceptable human and business values such as ethical reasoning and policy compliance. In addition, soft skills are invaluable to AI implementation in accounting due to their proficiency in streamlining communication processes and sustaining stakeholder involvement.

Tangible evidence demonstrating the critical role soft skills play in complementing AI includes that of Apple, which partially owes its success to soft skills that complement its AI strategy. At a glance, the global giant has created a culture that allows the cultivation of creative ideas, team collaborations and emotional intelligence by retaining and attracting employees with exceptional soft skills.

In conclusion, soft skills in accounting are the human touch that makes AI more effective, efficient and impactful. While AI provides data-driven insights, soft skills bring the human touch, creativity and critical thinking to the table. By combining these two forces, accounting professionals can make informed decisions, drive innovation and achieve success in today's business landscape.

Challenges and opportunities for integrating soft skills in training programs

Numerous challenges can derail the integration of soft skills in training programs. For instance, the lack of formal education on soft skills due to institutions' or programs' excessive focus on academic and technical skills poses a challenge. In addition, structural barriers like the inaccessibility of essential resources needed to develop soft skills exist. Also, the general populace's lack of collective will to develop soft skills stands out as a barrier. Research by Wenjing Lyu and Jin Liu revealed that the high levels of disinterest are compounded by the fact that the masses are largely unaware of soft skills.

On the other hand, opportunities include integrating the development of such skills into formal education. Similarly, relevant stakeholders can provide viable opportunities through experiential learning. Herein, those needing training engage with people with hands-on experience in developing these human skills. Research shows this approach is preferable for individuals with difficulties in the classroom setting. 

Moreover, relevant stakeholders can proactively address the barriers to access by promoting equitable resource allocation for the underserved and disadvantaged. Concerned parties can support a mindset shift throughout the population by building consensus on the importance of these skills.

Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >

Challenges of fusing soft skills and AI

When combining AI and soft skills, there are a few pitfalls to be aware of:

Over-reliance on AI. AI is sometimes used as a substitute for human judgment and decision-making, leading to a lack of critical thinking and problem-solving skills. Humans can become too dependent on AI, losing the ability to make decisions without it.

Depersonalization. Over-automating processes leads to a loss of human touch and empathy, damaging relationships and customer experiences. This can thwart emotional intelligence, essential for effective communication and collaboration.

Ethical considerations. AI raises ethical concerns, such as privacy, data security and potential misuse, which must be addressed proactively. Humans should consider the ethical implications of AI decision-making leading to potential harm.

Future industrial trends and the need to develop soft skills

We are peering into an era where adaptability and innovation are the cornerstones of individual and organizational performance. The transformation of the corporate world will command paradigm shifts from traditional notions of job specialization and employability. Presumably, there will be a rise in demand for individuals possessing hybrid skills due to the introduction of advancements like AI that will reshape industries. Similarly, digital literacy will transcend to a universal requirement; thus, tech-savvy accountants will stand out. Moreover, work readiness will prompt the creation of diverse skill sets as organizations will strive to mirror a culture of equity, inclusion and diversity.

In this landscape, accountants must invest in upskilling to remain competitive. Soft skills development is no longer a nicety but a necessity, empowering accountants to complement their technical expertise and enhance their viability in the job market. Recruiters are seeing high demand for accountants with soft skills, and developing these skills will become a critical component of an accountant's toolkit. Some of the key soft skills that accountants must develop include:

• Communication skills to effectively communicate financial information to clients and stakeholders
• Collaboration skills to work effectively with cross-functional teams
• Emotional intelligence to navigate complex client relationships
• Creativity to find innovative solutions to complex accounting problems
• Critical thinking to analyze complex financial data and make informed decisions

In conclusion, the future of accounting belongs to those who can adapt, innovate and develop the soft skills that complement their technical expertise. As the profession continues to evolve, accountants must invest in upskilling and reskilling to remain relevant in a rapidly changing landscape.

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A recent study from Teach Simple determined the states with the highest and lowest median university earnings, using information from the U.S. Department of Education’s College Scorecard. The study analyzed and compared institutions within each state to determine the ranking order, considering three factors: median earnings of people who began college 10 years ago, the average annual cost a student who receives federal financial aid will pay to cover expenses and the average graduation rate within eight years of entering the school.

“Policies and regulations, such as minimum wage laws, tax policies, and labor regulations, differ across states and therefore impact earnings across institutions, says Cole Vineyard, founder of Teach Simple. “States with higher minimum wages or more worker-friendly policies may offer higher earnings for workers across all sectors.” 

Which states have the highest earning graduates?

According to Teach Simple’s data, these are the states with the highest earning graduates. 

Also included is the institution in each state with the graduates who earn the most, four years after getting their degree, determined by Degree Choices. To determine which school had the biggest earners, Degree Choices analyzed 2022 data from the Department of Education’s College Scorecard on the median earnings of degree holders who received at least $1 in financial aid and who were working (and not enrolled) four years after completing their degree. 

1. Massachusetts

• Average of each institution's median earnings: $65,319  
• Average annual cost of school: $26,268  
• Average graduation rate: 67%
• Institution with the biggest earners: Massachusetts Institute of Technology (MIT)

2. Rhode Island 

• Average of each institution's median earnings: $64,818  
• Average annual cost of school: $29,083  
• Average graduation rate: 68% 
• Institution with the biggest earners: Bryant University

3. Connecticut

• Average of each institution's median earnings: $64,720  
• Average annual cost of school: $22,889  
• Average graduation rate: 59%
• Institution with the biggest earners: The American Sentinel College of Nursing and Health Science

4. Maryland 

• Average of each institution's median earnings: $60,286  
• Average annual cost of school: $18,103  
• Average graduation rate: 58% 
• Institution with the biggest earners: Capitol Technology University

5. District of Columbia

• Average of each institution's median earnings: $59,364 
• Average annual cost of school: $25,000 
• Average graduation rate: 40% 
• Institution with the biggest earners: N/a

“Education is extremely beneficial for economic success. Individuals with higher levels of education will have access to better job opportunities, higher salaries and greater job security," says Vineyard.

States with the lowest earning graduates

On the other hand, these are the states with the lowest earning graduates. 

47. North Dakota

• Average of each institution's median earnings: $43,000  
• Average annual cost of school: $12,867
• Average graduation rate: 40% 

48. Kentucky

• Average of each institution's median earnings: $42,000
• Average annual cost of school: $15,811
• Average graduation rate: 47% 

49. Arkansas

• Average of each institution's median earnings: $41,481
• Average annual cost of school: $14,143  
• Average graduation rate: 43% 

50. Mississippi

• Average of each institution's median earnings: $39,235 
• Average annual cost of school: $13,750
• Average graduation rate: 45% 

51. New Mexico

• Average of each institution's median earnings: $38,417  
• Average annual cost of school: $14,833 
• Average graduation rate: 46% 

Bottom line

The Northeast has the highest earning graduates in the country, while the South and Midwest have the lowest, according to the data. Colleges in the Northeast also cost more, on average, and the cost of living is also higher in this area. While location isn't the be-all and end-all of how much money you'll make once receiving your degree, it is wise to pay attention to your state's post-graduation economic outcomes before committing to the financial burden of student loans. 

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Well, what if you studied engineering and art? A working paper from the National Bureau of Economic research suggests the best option is an and, not an or when it come to college majors. 

"Graduates with double majors seem to experience much more protection from market shocks," including mass layoffs, disruptive technology and labor demand shifts, co-author Drew Hanks told the Wall Street Journal about the results of the study. 

Like an investor with a diversified portfolio, college grads with double majors tended to have fewer fluctuations in earnings than those with single majors, the paper found. That impact was most pronounced, the paper says, in grads whose majors were more differentiated (think: engineering and art, not chemical engineering and mechanical engineering). 

The researchers believe there is good reasoning for this effect.

"First, the broader range of skills possessed by double majors may position them for different jobs that are more protected from labor market fluctuations," the paper reads. "Second, double majors may generate an option value. For instance, if one major experiences a negative shock in labor demand while the other remains unaffected, a double major can pursue a job related to the unaffected major, thereby mitigating the impact of the adverse shock to their other major on their earnings."

Personally, I'm a big advocate for double majors — and this paper is vindicating my 19-year-old self's foresight. Brag incoming: I majored in both economics and creative writing as an undergraduate, and I've found both to be helpful in my career, both for what I learned and for the credentials they've provided. 

Studying economics helped me to see the world in a different way and think analytically, while studying creative writing helped me to be able to communicate and organize those thoughts. They informed each other in ways I couldn't have predicted and, wouldn't you know it, here I am using both in my role at Kiplinger. 

Beyond earning potential, pursuing a double major made my college life more fun. Instead of having to pick one lane and funnel myself into one definition, I played with different areas of study that I enjoyed. 

My other double major classmates also kept things interesting. For instance, I'll never forget when one of my classmates, who double majored in creative writing and mathematics, turned in an essay for a writing class peppered with equations that he made poetic.

After all, your college studies are about learning and exploring, not about earning potential... right? 

But if the undergrad in your life is focused on earning potential, you can always send them the latest information on the highest paying college majors — you just might want to suggest they pair it with one of the lowest paying ones for stability. 

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