Student-loan borrowers in Mississippi and nationwide could have their debt reduced or eliminated through a new one-time adjustment by the U.S. Department of Education.

This summer, the Department will gives you credit towards loan cancellation through this adjustment if your loan is federally managed.

Cora Hume is an attorney with the Consumer Financial Protection Bureau, and said this adjustment is designed to count more of the payments made - so they can be added to the payments required for cancellation.

The adjustment counts your loan payments made after July 1, 1994 - and in some situations your deferments, economic hardship allowances, and forbearances.

"Historically, borrowers of all ages have struggled to access this Income Driven Repayment benefit," said Hume. "It's really important that they do because it can lower their monthly payments based on their income and family size. This April 30 deadline applies to some loans."

In Mississippi, 145,000 borrowers aged 25 to 34 owe an average of more than $31,000.

Hume said those with nonfederal loans need to consolidate them into a direct consolidation loan with the U.S. Department of Education by the end of April to potentially benefit from this adjustment.

Hume emphasized that student loan debt does not discriminate, and their data shows that 2.7 million older borrowers owed an average of $41,000 in federal student loans in 2023.

She said between 2004 and 2022 there was a nine-fold increase in the number of older borrowers with student loan debt.

"Thirty-two percent of these older borrowers are struggling to pay their bills," said Hume. "In terms of this adjustment, we know that 62-plus borrowers are more likely to need consolidation to maximize the benefit of this one-time pay count adjustments. "

Hume pointed out that more than one million senior citizens are not in the direct-loan program and hold an average of more than $29,000 in debt from their college days.

She encouraged borrowers to visit StudentAid.gov/loan-consolidation to find out if they are eligible for the significant adjustment.




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Among the hundreds of pages making up the "One Big Beautiful Bill Act" just signed into law is a requirement some people must work to receive Medicaid coverage, a rule with which Arkansas is familiar.

Under the new law, able-bodied Medicaid recipients between aged 19-64 must work, volunteer or go to school for 80 hours a month. In 2018, Arkansas was one of the first states to enact a work requirement tied to Medicaid.

Keesa Smith-Brantley, executive director of Arkansas Advocates for Children and Families, said under the plan, many of their clients lost coverage, although they were following the rules.

"We saw horrible examples of individuals who work in the food industry and in other industries where your hours fluctuate," Smith-Brantley recounted. "One month they were eligible and the next month they weren't, and that was getting individuals removed from the Medicaid rolls."

She added her organization will work closely with Arkansans to educate them about the new rules. More than 820,000 Arkansas residents get their health coverage through Medicaid.

An estimate from the nonpartisan Congressional Budget Office showed the work requirement will increase the number of uninsured Americans to about 12 million. It is estimated 140,000 Arkansans would lose their health coverage. Smith-Brantley noted the cuts will be especially hurtful for rural areas.

"If you are an Arkansan - particularly in rural parts of the state - and you lose your local hospital, that means everyone is going to lose a resource there," Smith-Brantley pointed out. "Not just the folks that are on Medicaid. Everyone is going to have to drive further."

It is estimated Arkansas will have to make up some $55 million in federal cuts to administer the Supplemental Nutrition Assistance Program. Smith-Brantley added fewer federal dollars for SNAP will also affect small communities.

"We're hearing directly from grocery store owners that are saying that this will have a negative impact on their bottom line, and their ability to continue to operate in areas that have a higher low-income population," Smith-Brantley emphasized.

About 240,000 Arkansans receive SNAP benefits to help them purchase food.


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A new report commissioned by faith leaders outlines the high moral stakes at play as the Trump administration pushes to cut federal programs to pay for extending tax cuts passed in 2017.

Karen Dolan, criminalization of poverty project director at the Institute for Policy Studies and the report's co-author, said the budget resolution recently passed by the U.S. House would eviscerate Medicaid, the single largest source of health coverage in the U.S., by cutting $880 billion.

"The proposal could result in a loss of coverage for 36 million people," Dolan pointed out. "In Colorado alone, there's over a million enrollees in Medicaid."

Republicans have long argued tax cuts boost the economy and allow people to keep more of the money they earn. They also say their budget resolution does not include the word Medicaid a single time. But according to a nonpartisan watchdog group, it would be virtually impossible for the Energy and Commerce Committee to meet its $880 billion without cutting Medicaid.

Extending tax cuts would amount to less than a dollar per day in savings for the bottom half of U.S. families. But the richest one-tenth of a percent of Americans would receive more than $314,000. Corporations promised to use windfalls from tax cuts in 2017 to raise wages, but Dolan noted the bottom 90% of workers have seen no benefits at all.

"When corporations get huge windfalls, in the form of tax breaks and tax loopholes, that money does not trickle down to worker's wages or to the economy," Dolan emphasized. "All it does is enrich that corporation."

The report outlined how mass deportations will raise consumer prices and harm immigrant families, including those with U.S. citizen children. The GOP also plans to cut food assistance by $230 billion and increase work requirements. Dolan stressed the majority of people who receive assistance are already working and many who work multiple jobs still need assistance because the minimum wage is so low.

"Ninety-two percent of people who receive Medicaid work either full-time or half-time, or have disabilities, are over age 65, are taking care of children or elderly adults, or are attending school."


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By Wesley Brown for the Arkansas Delta Informer.
Broadcast version by Freda Ross for Arkansas News Service reporting for The Arkansas Delta Informer-Winthrop Rockefeller Foundation-Public News Service Collaboration.

As ALICE families in Arkansas prepare for the 2025 tax season with the anticipation of healthy refunds, a federal tax proposal that offers substantial financial relief is currently at risk for low-and middle-income wage earners.

In Washington, D.C., Congressional Republicans may soon release a budget resolution that will set the terms of the national tax debate, including the expected extension of President Trump's signature 2017 Tax Cut and Jobs Cut law, including its changes to the Child Tax Credit (CTC). If Congress funds President Trump's ambitious budget bill, American taxpayers could also be on the hook for $5 trillion, several experts told the Arkansas Delta Informer.

And despite Vice President J.D. Vance's statements during the November election that he would like to see the federal CTC expanded to $5,000 per year, uncertainty still looms as Congress discusses whether to continue, alter, or end its provisions.

According to the Institute on Taxation and Economic Policy, that ongoing debate will significantly impact ALICE (Asset Limited, Income Constrained, Employed) households earning above the federal poverty level but less than what's needed to survive in the current economy.

Peter Gess, economic policy analyst at Arkansas Advocates for Families and Children (AAFC), agrees. He said that with the impact of rising inflation, ALICE households will be worse off if Congress decides not to expand or extend the 8-year-old tax policy.

"And so, if nothing happens, then that tax credit reverts to $1,000. And, you know, I did a quick look at inflation, and that's like 25% less value from where it was before the tax cuts in 2017," he said. "So, without keeping up with inflation, just being reverting to $1000 it'll be a lot less for families even than what it was before."

As noted, in his first term, the President pushed Congress to pass the $1.8 trillion Tax Cuts and Jobs Act (TCJA) in 2017, which made substantial permanent cuts to corporate and business taxes. That tax policy-changing law also raised the federal child tax credit from $1,000 to $2,000 and made it available to families earning up to $400,000 instead of $110,000.

When President Biden took office in 2021, he significantly expanded the child tax credit under the $1.9 trillion American Rescue Plan. Under that law, families received a $3,000 annual benefit per child ages six to 17 and $3,600 per child under six as a monthly payment for the 2021 tax year.

According to the U.S. Census Bureau, the payments ranged from $250 to $300, expanding the child tax credit to nearly 35 million U.S. families. However, those payments expired in January 2022 after Congress failed to renew the Biden-era program.

Likewise, unless Congress renews or expands the program under the Tax Cuts and Jobs Act, the federal CTC will revert to $1,000 per qualifying child in 2026. Additionally, the age limit for eligible children would decrease to 16.

ALICE families nervous about possible CTC changes

Athea Townsend of Little Rock hopes Congress will expand the tax credit closer to the $3600 maximum paid to families during the pandemic. However, she says letting it expire would be far worse for families struggling with inflation, high grocery bills, and childcare expenses.

Townsend says the expanded tax credit in 2021 helped her with expenses when she had only one child, Zen, a bright and energetic eight-year-old in the third grade. "You know, he is a growing boy, so it did help with essential things like clothes and food and help with the bills," said Townsend.

Today, however, Zen has a one-year-old brother, Zi, and the CTC has since reverted to 2017 levels of $2,000 per child annually. If Congress lets the CTC expire at the end of the year, it will impact thousands of ALICE households like hers, predicted Townsend, a marketing and graphic design professional.

"For working (single parents) and others like me, it is very much needed," she said.

In October 2014, new data from the ALICE in the Crosscurrents: An Update on Financial Hardship in Arkansas report showed that nearly 11,000 more Arkansas households like Townsend were still struggling to make ends meet in 2022 compared to the previous year.

That brings the total number of households living paycheck to paycheck across Arkansas to 562,879, representing 47% of the state's population, according to the latest update from ALICE in Arkansas, in partnership with United For ALICE.

This includes 195,972 Arkansas households in poverty and another 366,907 defined as ALICE (Asset Limited, Income Constrained, Employed), earning above the federal poverty level but less than what's needed to survive in the current economy. ALICE households include individuals and families working low-wage jobs with little or no savings and one emergency from poverty.

However, a recent report by the U.S. Census Bureau shows that the enhanced federal child tax credit during the pandemic pulled 2.9 million children across the U.S. out of poverty. This underscores the potential positive impact of the tax credit on struggling families.

New CTC proposal part of Trump budget talks

And that President Trump has ascended to the White House a second time with Republicans in control of both chambers of Congress, one of the incoming President's key economic goals is to lock in or extend parts of the law they couldn't in 2017 due to the Senate's budget reconciliation rules.

Next year, nearly all of the individual provisions of the 2017 Tax Cuts and Jobs Act (TCJA) will expire unless Congress acts. The Congressional Budget Office has estimated that fully extending the TCJA would cost $4.6 trillion over ten years. With interest

Gess and other federal CTC proponents hope that Congress will expand the popular tax provision and tweak the law to make the credit work for more families below the federal poverty line.

According to the Center on Budget and Policy Priorities (CBPP) analysis, a bipartisan and more modest expansion of the federal CTC could be a ray of hope. This proposal, developed by Senate Finance Committee Chair Ron Wyden and former House Ways and Means Committee Chair Jason Smith, aims to assist approximately 19 million children who currently receive partial credit or none due to their families' low incomes. The bill would increase the refundable tax credit to a maximum of $2,500, offering a brighter future for these families.

That bill would also make families with low or no earnings eligible for the full credit, tie benefits to the number of children in a family, adjust the credit amount annually with inflation to ensure that it does not erode over time, and provide the credit in monthly installments.

"The last thing families need is to see Washington slashing their child tax credit in half," Smith said in a Jan. 16 committee hearing, which repeatedly addressed the expiring tax break.

In a CPBB research note of Feb. 5, Kris Cox, deputy director of the progressive Washington, D.C.-based think tank, said fixing flaws in the 2017 law would deliver a more meaningful tax benefit to single parents and working-class families.

"This should mean delivering a meaningful income boost to children in families who are struggling economically, even if any extension of the 2017 tax law would, as a whole, be costly and skewed to the wealthy," said Cox.

According to Gess, suppose the Wyden Smith bill passes in its current form. In that case, ADCF estimates that 191,000 children in Arkansas, or one out of every four currently left out of the full $2,000 credit, would benefit in the first year. "The credit would especially help children in Arkansas who are Black, Indigenous and Other People of Color (BIPOC), whose parents are more likely to hold low-paying jobs, due to historical and ongoing discrimination and barriers to prosperity," he said

"So, you're getting people who make lots of money the full credit, and you're getting people that don't make very much money, who really need it, aren't getting the full credit," Gess concluded.

And despite support from the House Ways and Means Committee and the vice president, many believe that expanding or keeping the CTC from expiring will be challenging, even with bipartisan backing.

ITEP Senior Policy Analyst Joe Hughes told the Arkansas Delta Informer that upbeat statements made by Vance and others during the election season are not part of ongoing budget talks. Also, the current proposal congressional Republicans are debating to extend the Trump-era tax cuts comes with a hefty price tag of up to $5.5 trillion over the next decade, based on a Jan. 10 report by the U.S. Treasury Department,

Hughes predicts that if the new proposal keeps most of the business provisions, including the slashing of the corporate tax cuts from 39% to 21%, most benefits will flow to wealthy individuals and businesses. He said that would leave everyone else with a token tax cut and saddle the nation with a massive national debt increase.

"Last year, we found that extending the 2017 law would direct more than two-thirds of the benefits to the richest 20% of households. A family making $20,000 a year would see a modest tax cut of a hundred dollars, while a millionaire would receive tens of thousands," Hughes said in a Feb. 5 research note. "This approach is designed to offer small tax cuts to working families as political cover while delivering massive benefits to the wealthiest Americans - at the cost of a ballooning federal deficit."

New state-level CTC bill introduced to Arkansas legislature

While Congress discusses the future of the Trump-era CTC policy, state legislatures are expanding child tax credits. According to ITEP, states with fully refundable Child Tax Credits in 2024 are California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, and Vermont. Idaho, Oklahoma, and Utah.

Arkansas does not offer state-level CTC going into the 2025 legislation session, but Rep. Denise Garner, D-Little Rock, has filed a bill that would provide a $300 refundable income tax credit for qualifying taxpayers who provide support to certain dependents.

Under House Bill 1015, the credit would be available for an individual taxpayer with net income up to $100,000 or taxpayers filing jointly with net income up to $200,000. Married taxpayers who meet the income thresholds for the credit and file separately on the same return may each claim a $150 credit against the tax due on the return of each spouse.

The bill, originally filed in November, also requires the Department of Finance and Administration (DFA) to make an annual cost-of-living adjustment to the credit amount. A DFA fiscal impact study estimates that general revenues would decrease by $238 million in fiscal 2026 and $245 million in fiscal 2027.

The DFA study shows that in tax year 2022, 618,000 taxpayers with 793,000 dependents would qualify for the credit. Approximately 370,000 Arkansas taxpayers would realize an overall reduction in tax liability at a cost of $134 million, and some 250,000 taxpayers would receive a refundable credit totaling $83 million.

Nationally, AACF data shows that 90% of Arkansas families, or 661,000 children, received monthly payments of $250 to $300 under the expanded CTC program during the pandemic. Gess said the proposed new expansion of the federal CTC before Congress would boost the family finances of around 191,000 Arkansas children at tax time this year.

An updated version of HB 1015 was submitted to the House Tax and Revenue on Jan. 15, but no hearing for the bill is on the panel's calendar. That amendment added Little Rock lawmakers, Reps. Andrew Collins and Joy Springs, as co-sponsors of the bill.


Wesley Brown wrote this article for the Arkansas Delta Informer.


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