This week’s list covers a broad range of topics. Big economic news this week included a downgrade of the US debt and the July jobs report. A new income-driven repayment plan for student loans, SAVE, was announced this week. and we also take a look at consumer sentiment, rents, and use of credit.

Economics

• The Fitch credit-rating agency downgraded the US debt from AAA to AA+. What does that mean?(AP) (CNN) and should you worry? According to Warren Buffet, the answer is no. (CNBC)
• Bank of America economists are now in the “soft-landing, no recession” camp. (Reuters)
• It looks like the jobs market may be cooling very slightly from its very hot peak.
  • Total job openings at the end of June were largely unchanged at 9.6 million. (BLS press release)
  • The July jobs report showed 187,000 new jobs, below the 200,000 expected. Unemployment was at 3.5%. Wage growth was still strong. (Reuters) (BLS) 
• However, the situation can be very different depending on where you live or what sector you work in. 
  • States and local governments are fighting for workers. (AP)
  • The graph below shows you how varied the job market is by state. The data came from the US Chamber of Commerce and the graph from Visual Capitalist.

Paying for College

• The SAVE plan, a new income-driven repayment plan launched by the Biden administration yesterday. Here are the details taken from the CNN article:

Beginning this fall under the SAVE Plan…

• One million more Americans will qualify for $0 monthly payments, the Department of Education estimates. The SAVE Plan raises the income threshold for paying nothing to $32,805, up from $22,000 or less under current income-driven repayment programs.
• Unpaid interest will not pile up as long as people make their monthly payments, even if that monthly payment gets cut to $0.

And, beginning in July 2024…

• Loans of $12,000 or less will be canceled after 10 years of payments (including loans taken out before 2024). Every additional $1,000 borrowed beyond that would extend cancellation by another year, so a $22,000 loan would get canceled after 20 years of payments.
• Undergraduate loan payments will be capped at 5% of borrowers’ discretionary funds—total income minus $32,800—down from 10% under current programs.

Budgeting

• What has happened to rents where you live? Move through this article to get an interactive table. (Washington Post-subscription may be required)
• How do consumers feel about the economy? Are real incomes rising? This article takes a look at the consumer picture in the US, as consumption drives GDP. Lots of interesting data is embedded in the text. (TKER)
•  

Managing Credit

• 51% of banks say they are using tougher standards for potential borrowers at the end of the second quarter, up from 46% at the end of the first quarter. (Axios)
• In VantageScore’s June 2023 CreditGuage anaylsis, the average credit score only moved one point, and debt levels and credit utilization remained flat, indicating consumers are using restraint. (PRNewswire)
• Gen Z seem to be borrowing to make ends meet, according to a survey from PYMNTS and Lending Club. (PYMNTS)

Investing

• Which two companies have the largest market cap in the world? If you answered Apple and Microsoft, you’d be correct. (Reuters)

Advocacy

• Oregon Governor Tina Kotek signed bipartisan Senate Bill 3 on July 31, making Oregon the 23rd state to guarantee a standalone personal finance course for high school students. (Yahoo Finance)

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.