Search here...
Home Blog

Guide To Temporary Expanded Public Service Loan Forgiveness (TEPSLF)

globalinvestmentstrategy.com
-
0
Guide To Temporary Expanded Public Service Loan Forgiveness (TEPSLF)


Key Points

  • TEPSLF lets payments made on Graduated, Extended, and certain Consolidation repayment plans count toward the 120 payments needed for loan forgiveness — plans that don’t qualify for regular PSLF.
  • The catch: the amount you paid 12 months before applying and your last payment before applying must each be at least as much as you would have paid on an income-driven repayment (IDR) plan.
  • TEPSLF is funded with a limited congressional appropriation and awarded first-come, first-served.

Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is a big deal for a lot of borrowers, especially as they approach 120 eligible PSLF payments.

Here’s the problem we keep hearing about: borrowers log into StudentAid.gov, see their payment count hit 120, and assume forgiveness is coming. Then they get denied. What they didn’t realize is that some of their payments only count under TEPSLF, not regular PSLF, and TEPSLF has an extra requirement most people have never heard of: the final 12 payment rule.

If you spent years on a Graduated or Extended repayment plan before switching to an income-driven plan, this article is for you. Here’s how TEPSLF works, why your StudentAid.gov payment count can be misleading, and how to make sure the last 12 months of your payments don’t disqualify you.

Table of Contents

Why Was/Is PSLF So Hard to Qualify For?
What Is Temporary Expanded Public Service Loan Forgiveness (TEPSLF)?
Where Did Temporary Expanded PSLF Come From?
Who Is Eligible? Part 1: Type of Repayment Plan
Who Is Eligible? Part II: Procedure
What Kinds of Loans Are Eligible?
How To Apply For TEPSLF
What About Taxes?
Does This Actually Work for Anyone?
What Else Is Going on with PSLF?

What Is Temporary Expanded Public Service Loan Forgiveness (TEPSLF)?

Temporary Expanded Public Service Loan Forgiveness is a companion program to Public Service Loan Forgiveness (PSLF) that Congress created in 2018 for borrowers who did everything right for PSLF (right loans, right employer, 120 payments) except they were on the wrong repayment plan.

Regular PSLF only counts payments made under income-driven repayment plans (or the 10-Year Standard plan). TEPSLF expands that to include payments made under:

  • The Graduated Repayment Plan
  • The Extended Repayment Plan
  • The Consolidation Standard Repayment Plan
  • The Consolidation Graduated Repayment Plan

Everything else about PSLF still applies: you need Direct Loans, full-time employment with a qualifying employer (government or eligible nonprofit), and 120 payments made after October 1, 2007.

Here’s a quick infographic to help you understand the differences between PSLF, TEPSLF, and the special Biden PSLF Waiver:

TEPSLF vs. PSLF vs. PSLF Waiver Inforgraphic

Where Did Temporary Expanded PSLF Come From?

When the first PSLF borrowers became eligible for forgiveness in 2017, the results were ugly — only about 2% of applicants were approved. One of the biggest reasons for denial was being on the wrong repayment plan, often because a loan servicer steered the borrower into it.

Under pressure from Congress, lawmakers included $350 million for an expanded version of PSLF in the 2018 budget deal (the Consolidated Appropriations Act, 2018). Congress added another $350 million in the fiscal year 2019 appropriations, plus $50 million each in 2020 and 2021 — roughly $800 million total, available until expended.

That’s why it’s called “temporary”: the money is a fixed pot, awarded first-come, first-served. The Department of Education hasn’t announced that funds are exhausted, but there’s no public tracker of what’s left. If you think you qualify, don’t sit on it.

Why TEPSLF Is Suddenly Relevant Again

For a few years, TEPSLF faded into the background. The limited PSLF waiver (2021–2022) and the one-time IDR account adjustment retroactively fixed most “wrong plan” payment histories, so fewer borrowers needed it.

But in 2026, we’re seeing a new wave of borrowers crossing 120 total payments — many with stretches of Graduated or Extended plan payments in their history that only count through TEPSLF. At the same time, PSLF tracking moved from MOHELA to StudentAid.gov, where the payment tracker shows one combined count for PSLF and TEPSLF.

The result: borrowers see 120 payments in their dashboard, expect automatic forgiveness, and instead get a denial — usually because of the final 12 payment rule below.

The Final 12 Payment Rule (Read This Twice)

This is the requirement that’s catching people. To qualify for TEPSLF, the Department of Education checks the amount of two specific payments:

  1. The payment you made 12 months before applying for TEPSLF, and
  2. The last payment you made before applying

Both of these payments must be at least as much as you would have paid under an income-driven repayment plan at the time.

In practice, treat this as: your final 12 months of payments need to be at IDR levels. The Department checks those two bookend payments, but you generally can’t know in advance exactly which billing cycle will be evaluated as “12 months prior” — so the safe play is making sure every payment in your final year clears the IDR bar.

Why People Fail This Test

Graduated and Extended plans exist to lower your monthly payment. Early Graduated plan payments in particular can be far below what an IDR plan would charge. So the exact plans that make you TEPSLF-eligible are also the plans most likely to fail the 12-month test if you’re still on one when you apply.

How To Pass It

  • Switch to an income-driven repayment plan for your final year. This is the cleanest solution. If you’re on IBR (or the new RAP plan, which launched July 1, 2026) for the last 12 months before you apply, you satisfy the rule automatically.
  • Or verify your payment amounts. Ask your servicer what your calculated IDR payment would be, estimate it with Loan Simulator on StudentAid.gov, or use our student loan calculator. If your current payments are at or above that number, you’re fine. If they’re close, round up — a payment that’s even a dollar short can trigger a denial.
  • Don’t apply the month you hit 120 if your recent payments were too low. A denial here isn’t permanent. You can keep working, make 12 months of IDR-level payments, and reapply — those extra payments count.

Why Your StudentAid.gov Count Is Confusing

Since PSLF servicing moved from MOHELA to StudentAid.gov, your payment progress lives in the PSLF tracker in your StudentAid.gov dashboard. Two things about it confuse borrowers:

1. The count combines PSLF and TEPSLF. Because the PSLF form and TEPSLF request were merged into a single application years ago, the tracker doesn’t clearly separate “these months qualify for regular PSLF” from “these months only qualify if you meet TEPSLF’s extra requirements.” Months you spent on a Graduated or Extended plan can show up in your count — but they only actually pay off if you clear the final 12 payment rule and TEPSLF funding is still available.

2. “Eligible” is not “qualifying.” The tracker also distinguishes months where your loan and plan were eligible but your employment isn’t certified yet. Until you submit a PSLF form covering those months, they don’t count toward 120.

The practical takeaway: if any part of your repayment history was spent on a Graduated, Extended, or Consolidation Standard/Graduated plan, don’t treat “120” in the tracker as a finish line. Check what your last 12 months of payments look like first.

Who Is Eligible For TEPSLF?

To recap, you must meet all of these:

  • Direct Loans only.
    FFEL loans, Perkins loans, and Parent PLUS loans don’t qualify. (Consolidating into a Direct Consolidation Loan can help going forward, but check how consolidation affects your payment count before you do it.)
  • 120 qualifying payments made after October 1, 2007, each made no more than 15 days late, while employed full-time by a qualifying employer.
  • Qualifying employment, certified via the PSLF form, including at the time you apply and when forgiveness is granted.
  • The final 12 payment rule, covered above.

How To Apply For TEPSLF

There is no separate TEPSLF application anymore. You use the same form as PSLF — the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application — ideally through the PSLF Help Tool at StudentAid.gov. If you’re working through the broader process, see our PSLF strategy guide.

When you’re denied PSLF solely because of your repayment plan, you’re automatically considered for TEPSLF. The servicer may follow up asking for income information to verify the 12-month payment test. (The old process of emailing a reconsideration request to FedLoan Servicing is long gone — if you see that advice anywhere, it’s outdated.)

Processing times vary, and the PSLF system has worked through repeated backlogs since the MOHELA transition. Expect months, not weeks, and keep certified copies of everything.

What About Taxes?

Forgiveness under PSLF and TEPSLF is not taxable income at the federal level. A small number of states treat forgiven debt differently, so check which states tax student loan forgiveness — but for most borrowers, the forgiven balance is tax-free.

What Else Is Going on with PSLF?

TEPSLF isn’t the only ting happening with student loans. A few 2026 developments matter for anyone in this situation:

  • RAP launched July 1, 2026. The Repayment Assistance Plan, created by the One Big Beautiful Bill Act, is a new income-driven plan that qualifies for PSLF — and satisfies the TEPSLF 12-month test if you’re enrolled for your final year. Borrowers can now apply for RAP online at StudentAid.gov. Going forward, IBR and RAP are the qualifying IDR plans, with PAYE and ICR phasing out by 2028.
  • The SAVE plan is gone. After the courts struck down SAVE, remaining enrollees are being moved to other plans in 2026. Time spent in the SAVE litigation forbearance didn’t count toward PSLF — which is pushing more borrowers to look at PSLF buyback and TEPSLF to fill gaps.
  • The new employer eligibility rule was blocked in court. The Department finalized a rule in October 2025 allowing it to exclude employers found to have a “substantial illegal purpose,” but a federal judge vacated it on June 30, 2026 — hours before its effective date. The existing qualifying-employer definition remains in effect, though the Department could appeal.
  • PSLF buyback is an alternative for some. If your issue is non-qualifying months (forbearance, deferment) rather than a non-qualifying plan, PSLF buyback — not TEPSLF — is likely your path.

TEPSLF FAQ

Is TEPSLF still available in 2026?

Yes. Congress appropriated roughly $800 million total, available until expended on a first-come, first-served basis. The Department of Education hasn’t announced that funding has run out, but it doesn’t publish a running balance either — so apply as soon as you’re eligible.

Do I need to file a separate TEPSLF application?

No. The PSLF and TEPSLF applications were combined into one form. If you’re denied PSLF because of your repayment plan, you’re automatically considered for TEPSLF.

StudentAid.gov shows I have 120 qualifying payments. Why haven’t my loans been forgiven?

A few possibilities. If some of your 120 months were on a Graduated, Extended, or Consolidation Standard/Graduated plan, those months only count through TEPSLF — which means you also have to pass the final 12 payment rule. Processing backlogs are another common reason. And if any months show as “eligible” rather than “qualifying,” you still need to certify employment for those periods.

What exactly is the final 12 payment rule?

The amount you paid 12 months before applying for TEPSLF, and the last payment you made before applying, must each be at least as much as you would have paid under an income-driven repayment plan. The simplest way to guarantee you pass: spend your final 12 months on an IDR plan.

How do I find out what my IDR payment amount would have been?

Ask your loan servicer directly, use Loan Simulator at StudentAid.gov, or estimate it with our student loan calculator. If you’re paying an amount close to the IDR figure, round up to be safe.

I was denied TEPSLF because my recent payments were too low. Am I out of options?

No. The denial isn’t permanent. Keep working for a qualifying employer, make the next 12 months of payments at or above your IDR amount (switching to an IDR plan is the easiest way), then reapply.

Do FFEL, Perkins, or Parent PLUS loans qualify for TEPSLF?

No. Only Direct Loans qualify. FFEL and Perkins borrowers can consolidate into a Direct Consolidation Loan to become eligible going forward, but talk through the payment-count implications first. Parent PLUS loans don’t qualify for TEPSLF even after consolidation.

Is TEPSLF forgiveness taxable?

Not federally. A few states may tax forgiven debt, so check your state’s treatment.

Should I use TEPSLF or PSLF buyback?

They solve different problems. TEPSLF fixes months where you paid on the wrong repayment plan. PSLF buyback fixes months where you made no qualifying payment at all — like time in forbearance or deferment. Some borrowers with SAVE forbearance gaps plus old Graduated/Extended plan history may need to think through both — here’s which payments and periods count toward PSLF and buyback.

How long does TEPSLF processing take?

Longer than it should. Since PSLF processing moved from MOHELA to the Department of Education, backlogs have been common — plan on several months and keep records of your form submissions.

Editor: Clint Proctor

Reviewed by: Chris Muller

The post Guide To Temporary Expanded Public Service Loan Forgiveness (TEPSLF) appeared first on The College Investor.

US musicians union urges court to reject Universal and Warner bid to dismiss lawsuit over Suno and Udio deals

globalinvestmentstrategy.com
-
0


The American Federation of Musicians (AFM) has urged a New York federal court to let its lawsuit against Universal Music Group and Warner Music Group proceed, rejecting the majors’ effort to dismiss the case over their AI licensing deals with Suno and Udio.

The union says the deals triggered the “new use” provision of its collective bargaining agreement with Universal and Warner, which it argues requires the labels to compensate members whose recordings were licensed to the AI companies.

It argues that this “new use” provision is contained within Article 21(a) of the Sound Recording Labor Agreement (SRLA) – something the two major music companies dispute.

At issue is whether the musicians who performed on those recordings are owed a share of the revenue flowing from the majors’ settlements and licenses with Suno and Udio.

In its response to the labels’ dismissal bids, filed on Friday (July 17) the AFM told Judge Edgardo Ramos that Article 21(a) of the Sound Recording Labor Agreement (SRLA) “is ambiguous and susceptible to more than a single interpretation.”

The union argued in the letter, which you can read here, that Article 21(a) imposes “an independent, mandatory payment obligation” – the company “shall pay” – and that any reference to other AFM agreements goes to how much is owed, not whether payment is due.

The provision applies to “all new uses,” the union said, “not simply those with a rate already established in another AFM agreement,” and it called the contrary reading “nonsensical.”

“Past practice confirms this: For example, when companies first licensed music for video games, no AFM agreement had set a rate for that use, yet the parties treated it as a new use for both notification and payment purposes.”

American Federation of Musicians 

“Past practice confirms this: For example, when companies first licensed music for video games, no AFM agreement had set a rate for that use, yet the parties treated it as a new use for both notification and payment purposes,” the AFM wrote.

Even if Article 21(a) requires that a rate already exist, the union argued, likely AI uses fall under rates the SRLA already sets.

“Since the SRLA sets rates for streaming, an AI recording on a streaming platform would be covered,” the AFM said.

“Other likely AI uses – video games, sampling, commercials – are similarly subject to express SRLA rates.”

The union’s response follows separate bids by Universal and Warner to have the case thrown out, each filed as a letter requesting a pre-motion conference ahead of a motion to dismiss.

In its July 7 letter, UMG argued that Article 21(a) “is a rate conversion provision, not an open-ended royalty provision,” covering only new uses for which another AFM agreement already sets a rate.

Warner, in a letter filed on July 10, argued that the union brought the lawsuit “in an improper attempt to place a judicial thumb on the negotiation scales,” as previously reported by MBW.

The company argued that Article 21 “merely points to other agreements” and “does not itself confer legal rights,” and that because no AFM agreement covers AI licensing, the provision “has nothing to point to, and there is no entitlement to payment.”

Both majors also asked the court to pause discovery while their challenges are decided, a request the AFM opposed, telling the court that “a stay of discovery is the exception and not the rule in this District.”

The AFM also said in a separate letter that it would amend its complaint to name Warner Records, Inc. as the defendant rather than Warner Music Group Corp., after Warner argued that the parent company was not a proper party.

The AFM sued Universal and Warner in the US District Court for the Southern District of New York on June 5.

Its complaint alleges that the two companies breached the SRLA by licensing recordings made by its members to Suno and Udio without compensation or credit.

In that complaint, the union stated that the “use of sound recordings in generative AI software models is not a purpose covered by the SRLA” – a line Warner has cited as a concession that AFM members have no claim.

Universal settled its copyright case against Udio in late October 2025, announcing a compensatory settlement and a license agreement for a new AI music platform.

Warner reached its own settlement and licensing deal with Udio in mid-November 2025, and days later became the first major to settle its copyright case with Suno, with the AI company acquiring Warner’s Songkick platform as part of that deal.

Sony Music, which has not settled with either AI company, is not a party to the AFM case.

The three majors first sued Suno and Udio in 2024, in a case coordinated by the RIAA that alleged “mass infringement” of copyright.

The AFM and the labels are negotiating the next SRLA, with AI at the center of the talks.

Judge Ramos has yet to rule on whether to let the majors move to dismiss or to pause discovery.Music Business Worldwide

Walmart: VIZIO 65-Inch Quantum 4K QLED TV on Sale for $196.80

globalinvestmentstrategy.com
-
0
Walmart: VIZIO 65-Inch Quantum 4K QLED TV on Sale for $196.80


Walmart: VIZIO 65-Inch Quantum 4K QLED TV on Sale for $196.80

Walmart is offering the VIZIO 65″ Quantum 4K QLED HDR Smart TV (VQD65M-08) for $196.80, down from its regular price of $298.00. That’s a savings of over $100 and one of the best prices we’ve seen on a 65-inch QLED TV.

The TV features a 4K UHD resolution, Quantum Dot (QLED) technology, HDR support with Dolby Vision, built-in VIZIO OS with popular streaming apps, Wi-Fi connectivity, and access to free channels through WatchFree+.

Highlights

  • Price: $196.80 (was $298.00)
  • 65-inch 4K UHD display
  • Quantum Dot (QLED) technology
  • Dolby Vision HDR support
  • Built-in VIZIO OS with streaming apps
  • Free shipping

BUY NOW

Guru’s Wrap-up

At under $200, this is an excellent value if you’re shopping for a large TV on a budget. While it won’t compete with premium OLED or Mini-LED models, it’s hard to beat a 65-inch QLED TV at this price.

Republicans tout Federal Home Loan Banks’ liquidity role

globalinvestmentstrategy.com
-
0
Republicans tout Federal Home Loan Banks’ liquidity role



  • Key insight: Republicans highlighted the Federal Home Loan Banks’ role as a reliable liquidity backstop for member institutions.
  • What’s at stake: Discussion drafts considered at a House Financial Services Committee hearing would ease capital rules for the banks and designate FHLB advances as “core” deposits.
  • Forward look: The discussion drafts set the stage for potential changes down the line, but have dim prospects for passage in the 119th Congress. 

WASHINGTON — House Financial Services Committee Republicans praised the Federal Home Loan Banks’ role as a provider of liquidity, putting forward a number of discussion drafts of legislation that would bolster the system’s ability to do so. 

Processing Content

“For decades, the federal home loan bank system has served as a reliable source of liquidity,” said Rep. William Timmons, R-S.C. “By ensuring these institutions have dependable access to funding, the system has helped support local lending and expand access to credit for families, businesses, and communities. Much of this important work has taken place by making it easy to overlook the critical role the system plays in maintaining the strength and stability of our financial system.” 

At a subcommittee meeting in the House Financial Services Committee to consider reform to the FHLBanks, Republican lawmakers asked both how to bolster the banks’ role as a lender and to ease the way for more housing liquidity. 

“The Federal Home Loan Banks serve important and related dual roles,” said Rep. Mike Flood, R-Neb., chairman of the subcommittee on housing. “They provide short-term liquidity to member institutions that can be used to provide more loans at the local level, and they provide direct assistance through grants in the Affordable Housing Program to communities across the country.” 

Read more:

The committee posted a number of discussion drafts of potential legislation ahead of the hearing, including one bill that would classify FHLB advances as “core” deposits. 
Those discussion drafts, however, have little chance of being developed into formal legislation that could be enacted before the end of the 119th Congress, after which time control of either chamber could potentially change hands after this fall’s midterm elections. Even so, they could serve as a starting point for future legislation, particularly if Congress decides to revisit housing affordability in the wake of the bipartisan inroads made by the housing package that recently passed into law. 

During the Biden administration, the Federal Housing Finance Agency released a report that outlined a range of changes for the FHLB system, many of which were aimed at fulfilling the system’s original role of helping Americans afford homes. The liquidity role came later and has periodically  sparked criticism. 

A few Democrats touched on those dynamics during the hearing. Rep. Ritchie Torres, D-N.Y., asked witnesses at the hearing whether the FHLBs have any disincentive to lend to a failing bank, especially when the costs of those advances might ultimately be borne by the Federal Deposit Insurance Corp. 

“I do feel like there’s a problem of moral hazard here,” he said. “It could be the case that the cure is worse than the disease.” 



Billionaire Mike Bloomberg warns Trump’s AI ownership plan would make ‘George Orwell blush’

globalinvestmentstrategy.com
-
0
Billionaire Mike Bloomberg warns Trump’s AI ownership plan would make ‘George Orwell blush’



The initial deal behind the American AI boom seems to be: private investors would help finance it, taking on the risk; private companies would initially own the benefits of the breakthroughs, then distribute them t​​o public markets later; and the government would help regulate the industry after the fact. In China, by contrast, the deal is that companies still have to compete for investment and customers, while the government provides the compute.

That bargain is showing signs of collapse — on the U.S. side. As costs soar, Chinese competitors gain ground and Washington increasingly considers AI to be a national-security asset, President Donald Trump is considering taking a governmental stake into AI companies. While both the populist left and the right, and the AI companies themselves, have lauded the proposal, one person isn’t cheering: Billionaire Michael Bloomberg.  

In an opinion column published in Bloomberg Opinion on Monday, the media company’s founder attacked the proposal, arguing that it would turn Washington from an industry regulator into an investor with incentives for profit, leading to “cronyism.” 

“Somewhere, Karl Marx is smiling,” Bloomberg wrote of the centrally planned economy on offer, while the propaganda possibilities would “make George Orwell blush.”

The former New York City mayor argued that Americans do not need their governments to own AI companies in order to share in the technology’s gains. For one, once they go public, they could just buy shares. But also, consumers and businesses already benefit from AI through fraud detection, medical research, bookkeeping and other helpful applications, he wrote, while the resulting economic growth could eventually generate more tax revenue for public services.

If AI companies are failing to contribute enough to the public, Bloomberg argued, Washington should fix the tax code to serve the public; not buy them. Ultimately, he predicted, federal shareholders will likely lead to corruption as the market will transform into a “smoke-filled backroom.”

Subscribe to Fortune Gulf Brief. Every Tuesday, this new newsletter delivers clear-eyed, authoritative intelligence on the deals, decisions, policies, and power shifts shaping one of the world’s most consequential regions, written for the people who need to act on it. Sign up here.

Do you need alternative investments in your mutual fund portfolio?

globalinvestmentstrategy.com
-
18
Do you need alternative investments in your mutual fund portfolio?



Do you need alternative investments in your mutual fund portfolio?

In this exclusive episode featuring Edelweiss Mutual Fund’s MD & CEO Mrs Radhika Gupta, we deep-dive into the needs and benefits of alternative investments in your mutual fund portfolio. People can invest in mutual funds with very low amounts. There are also multiple categories of mutual funds which cater to multiple financial needs. However, mutual funds are not very flexible. However, there is no use of derivatives in mutual funds. Now, SIF falls in the middle of mutual funds and AIFs. It brings the advantages of mutual funds and the flexibility of AIFs. Don’t chase narratives. Understand your needs as finance is personal. Have a shopping list and choose funds based on your needs. The Mutual Fund universe is very big and you can’t buy everything. So always invest in mutual funds as per your financial needs.

00:00 Highlights
01:09 Introduction:
03:25 Do you need alternative investments in your portfolio?
07:20 What are SIFs and how do they work?
11:54 What are the risks and returns of SIFs?
15:27 What are the different SIF strategies?
20:53 Does one really need SIFs in their portfolio?
23:47 What should be your time horizon for equity-oriented SIFs?
25:39 Learn about Mrs Radhika Gupta’s investment journey
28:40 How many mutual funds does one need in their portfolio?
29:56 Which AMCs have different investment styles than Edelweiss Mutual Fund?
31:27 How often does Mrs Radhika Gupta check her portfolio?
33:16 Mrs Radhika Gupta recently noted a ‘frothy element’ in the markets. What are its implications on investors?
35:35 What would Mrs Radhika Gupta tell a 25-year-old who is just starting their financial journey today?
36:52 Rapid Fire Round
40:06 Key Learnings

Subscribe to Groww Mutual Fund Channel :

About Groww

Groww is India’s Best Investment App and the Largest Stock Broker.

Find us here:

Android app:
iOS app –
Website –

RA Disclaimer Link –

We also have a Kannada, Tamil, Telugu & a Malayalam channel
Please subscribe here:
👉 Groww Kannada –
👉 Groww Tamil –
👉 Groww Telugu –
👉 Groww Malayalam
👉 Ipo review by Groww –

Follow us on:
Facebook:
Twitter:
Instagram:
LinkedIn:

#groww #mutualfund

Disclaimer: These are not any recommendations for any funds or stocks and are meant only for educational purposes.

If you have any concerns with respect to Groww, please feel free to write to us at support@groww.in or you can call us at +91 9108800000.

source

Everyone Is Talking About Context for AI. Here’s What Most Companies Still Miss.

globalinvestmentstrategy.com
-
0
Everyone Is Talking About Context for AI. Here’s What Most Companies Still Miss.









Everyone Is Talking About Context for AI. Here’s What Most Companies Still Miss. – SPONSOR CONTENT FROM CELONIS




























Skip to content


BiggerPockets’ Summer 2026 Rent-to-Payment Report

globalinvestmentstrategy.com
-
0


Foreword by Dave Meyer

In a new era of real estate investing, the old rules of thumb no longer work.

Back in the day of cheap homes and high rents, you could confidently use rent-to-price ratios (one month of rent divided by the purchase price) to estimate cash flow. If you hit the magical 1% target for rent-to-price or at least got close to it, you were good to go.

Unfortunately, in today’s era of higher interest rates, insurance costs, taxes, and pretty much higher everything, those metrics no longer cut it. We need new metrics to identify good deals, so I created one and ranked the largest U.S. cities by it. I’m calling it the Rent-to-Payment Ratio, and the formula is to divide one month’s rent by one month’s total mortgage payment (principal, interest, taxes, and insurance, aka PITI).

By comparing your total payment rather than purchase price, you better account for interest rate changes and how much insurance costs and taxes vary by state.

After ranking every metro by rent-to-payment, we can establish new benchmarks for cash flow estimates here in 2026, and the gold standard is still around 1.0. Anything that hits 1.0 or higher should have strong cash flow, but 1.0 is not some magical number.

According to my analyses, anything with a rent-to-payment ratio of 0.75 or above should still offer cash flow opportunities, and any market with a rent-to-payment ratio below that number will make cash flow difficult but not impossible to find.

The rankings are meant to identify cash flow potential but should not be seen as the be-all and end-all of cash flow evaluation. Remember that even in a city that averages 0.6 rent-to-payment, by rule, half the properties still have a rent-to-payment above that number!

These are averages on a metro level, not an evaluation of individual properties. It’s your job as an investor, no matter the market, to find deals that exceed those averages whenever possible.

One other reminder: Rent-to-payment ratios, my ranks, or any other rules of thumb are not meant as proper deal analyses. These are tools to help you narrow down your potential markets or deals. You still need to run a proper analysis before buying anything, which you can do with the BiggerPockets calculators.

All that being said, I find these results encouraging! There are multiple cities in the U.S. with rent-to-payment ratios above 1.0—which is great—and plenty of others with strong income potential for investors.

So, get to it! Take a look at the list, find some great cash-flowing markets, and then get out there and find a deal.

– Dave Meyer, Chief Investment Officer at BiggerPockets

The New Benchmark: Cash Flow Is Not a Default—It Needs to Be Discovered

Across the 54 tracked metros, the average rent-to-payment ratio is roughly 0.80, with a median of 0.76, meaning that in the “typical” big-city deal, market rent covers only 76%-80% of the full monthly cost of ownership (PITI).

A ratio of 1.0 used to be standard. Now it is the gold standard—where rent covers principal, interest, taxes, and insurance—while 0.75-1.0 remains workable, and anything below 0.75 is an uphill struggle for cash flow that will require either below-market house pricing, above-market rents, or aggressive value-adds to boost rents, which will cost investors.

For sophisticated investors, the hunt is framed not in terms of cash flow but rather in which metros the deal averages close to break-even and where they can use their skills in sourcing, underwriting, and value-add to move the needle.

Where Cash Flow Lives: Midwest and Northeast Workhorses

A pattern exists in many of the “cash-flow metros”: Home prices stayed cheap, while rents either held up or reset higher as national affordability shrank.

At the top of the table, Detroit posts an impressive rent-payment ratio of 1.99, meaning that average market rent is almost double the modeled all-in monthly cost of owning a city-limit property.

Here’s the full top 10, clustered around break-even stats:

Home Values

Detroit has an average home value of about $72,000. However, with a $1,280 monthly rent and modest principal-and-interest payments, along with relatively low taxes and insurance, there is a wide net operating income margin even after expenses. For an investor, the gap between rent and PITI is a buffer against vacancy, capital expenditures, and future tax rate increases.

Midwest markets such as Cleveland, St. Louis, Cincinnati, Indianapolis, Columbus, Chicago, and Kansas City all sit in the workable range—typically between 0.81 and 1.19—with taxes and insurance high enough to make a difference but not so high as to cripple the payment. In these cities, underwriting will depend more on rental amounts, tenant quality, and neighborhood selection than on whether PITI has surpassed the rent ceiling.

What the Data Doesn’t Tell You

What the data doesn’t tell you is what kind of house you are getting for under $80,000 in Detroit—or in any city—and in what neighborhood. Theoretical cash flow is one thing, but real-world experience, factoring in crime and socioeconomic conditions, also plays a part and can devour profit in an instant.

This is where microdata and experienced, trustworthy partners/agents and brokers are essential. Cash flow on paper doesn’t always translate in real life, so don’t take the data as sacrosanct. This is a general overview. Always do your due diligence.

At the Tough End: When Cash Flow Is a Nonstarter

At the bottom of the list, high prices, not weak rents, drive down the ratios. San Jose, with a rent-to-payment ratio near 0.39; San Francisco at 0.52; Los Angeles at 0.49; Seattle at 0.49; and San Diego at 0.56 all show strong rents—but their home values and resulting PITI simply outpace what tenants can reasonably be expected to pay.

Austin—once a pandemic-era hotbed—has joined these low-ratio ranks, with a rent-to-payment ratio of about 0.40, as prices have reset only partially and rents have softened.

In these pricey metros, investors are buying for appreciation and as a safe place to park cash. Thus, buying all cash here is the practical way to go, unless you are an owner-occupant and can cover the mortgage payment. The only other option is a value-add scenario—adding bedrooms or ADUs—to bring cash flow to a break-even point or to flip.

In the modern investment era, price is not everything. Taxes and insurance have soared in recent years, so much so that they can derail what would once have been a perfectly good deal, cost-wise. This is no more evident than in Oklahoma City, where the rent-to-payment ratio of 0.56 is so low in part because homeowner’s insurance alone accounts for roughly 40% of PITI, making it one of the highest shares in the country.

In Houston, Miami, Dallas, and other cities vulnerable to extreme weather—particularly storms and hail—elevated insurance and property tax costs significantly constrain the spread, submerging cash flow uncertainty under the weight of high expenses.

The Regional Divide: Why The Midwest Wins—on Average

One underlying theme is unmistakable from the data: The Midwest is the only region that cash flows, posting a mean rent-to-payment ratio of about 1.01—just above break-even. The Northeast follows at roughly 0.89, the South at 0.78, and the West lags far behind at 0.61. This means that in major western metros, the typical deal is nearly 40% underwater on PITI—even before maintenance and reserves are factored in.

For investors, these regional demarcations clearly have major implications:

  • Midwest: Investors need to drill down to examine submarkets, and sometimes specific streets, property types, and investment strategies, to maximize durable, scalable cash flow from a generally favorable dataset.
  • Northeast: With robust, populous, high-demand cities like New York, Boston, and Philadelphia, the trade-off is lower ratios for tenant demand and tight supply, with most cash flow and stable appreciation.
  • South: The map is uneven, with unglamorous, blue-collar cities such as Memphis and Birmingham giving off strong cash flow. Conversely, more upscale cities with modern businesses, like Austin, Atlanta, Nashville, Tampa, and Houston, are too pricey—like California cities—to generate any cash flow from rents.
  • West: It’s good for parking cash and long-term appreciation, but cash flow, with leveraged debt, is a nonstarter.

Why Payment Beats Price: Underwriting in a High-Cost World

In 2026, a key shift in professional underwriting has been long overdue—because rent-to-price ratios are no longer enough. Taxes and insurance, as we have seen, often constitute a large chunk of an investor’s expenses. By calculating monthly rent-to-payment ratios using the full monthly PITI at 6.5%, a 30-year fixed rate, and a 20% down payment—including city-level taxes and insurance—the dataset captures the true exposure for investors when rates and non-loan costs spike.

The impact is most dramatic when taxes and insurance deviate wildly from national norms. We already looked at Oklahoma City, where insurance is 40% of the payment. In Houston and Miami, high wind and flood risks have driven up annual premiums to an average of $7,860 and $6,000, respectively. Conversely, in places like Birmingham and Indianapolis, very low effective tax rates and moderate insurance keep PITI in check, allowing rent to absorb more of the costs.

For a sophisticated investor, a correlation between your payment composition and your market selection is essential if cash flow is your ultimate goal. There’s more to it, however. Looking at the overall picture holistically, there needs to be an equilibrium between price and non-mortgage-related costs.

Try to select markets where taxes and insurance have scaled reasonably with price, leaving room for rent growth to translate into cash flow. Equally, be wary of markets where policy or climate risk has inflated non-loan costs. In these instances, negotiating a great deal on price may not rescue a weak rent-to-payment ratio profile.

Investor’s Lens: Using the Rankings to Deploy Capital

If you’re building or expanding a portfolio in 2026, this dataset offers a practical investment roadmap but not a definitive guide, as prices and costs often vary by neighborhood.

That said, certain guidelines are helpful:

  • Use high-ratio metros: Detroit, Cleveland, Memphis, Birmingham, Hartford, St. Louis, and their peers are primary cash flow-hunting grounds.
  • Treat mid-range metros: Many in the Northeast and interior South are balanced plays, where cash flow exists, but you are more likely to find a mix of modest cash flow and appreciation.
  • Approach low-ratio metros such as Austin and West Coast cities as specialty markets: These are places where short-term rentals or cash purchases are for long-term equity appreciation and tax write-offs.

Final Thoughts

The optimistic note here is that even at 6.5% interest, high prices, and soaring taxes and insurance in many markets, there are large swathes of the U.S. where cash flow—or at least breaking even—has not disappeared. By using this rent-to-payment guide, you have a realistic tool that is not built on real estate agent or wholesaler hype or misdirection but on concrete numbers that even the playing field.

It’s a good first step—there are many more to take—but at least you’re facing in the right direction.

Editor’s Note: Thanks for reading! As a special offer for our readers, save $100 on your ticket to BPCON2026—BiggerPockets’ annual real estate investing conference—using code MYRE100 at checkout.

Newsletter Options – Instant, Daily & Weekly

globalinvestmentstrategy.com
-
0


There are now three newsletter options that you can subscribe to (for free) and get e-mails. 

Instant

You’ll receive an e-mail whenever a new post is made. There will still be some delay so if you want true instant alerts you’re better off setting up a custom solution using the RSS feed. Delay should be about 30 minutes, sign up below.

Daily

You’ll receive an e-mail at 9:30AM ET with all of a list and short description of the previous days posts. Sign up below. 

Weekly

These are slightly different than the above in that they aren’t automated. You basically just receive the ‘Best Posts Last Week’ post as an e-mail, you can see examples of those here. Sign up below

Our Verdict

There was a small issue with daily subscribers receiving the weekly newsletter, that should be fixed now. Feel free to provide feedback below. 

Warren Buffett Reveals He Was Behind Berkshire’s Decision to Invest in Alphabet

globalinvestmentstrategy.com
-
0
Warren Buffett Reveals He Was Behind Berkshire’s Decision to Invest in Alphabet


When Berkshire Hathaway (BRKA 0.15%)(BRKB 0.40%) disclosed a position in tech giant Alphabet (GOOG 1.47%)(GOOGL 1.39%) last year, many people assumed it was a big sign of a changing of the guard at Berkshire, with Greg Abel about to take over as CEO from Warren Buffett (Abel formally took over at the start of 2026).

Ironically, however, it turns out that Buffett was the one who initiated the move to invest in Alphabet, admitting to it in a recent interview. For investors, it may come as a startling revelation, given that Buffett typically avoids tech and instead invests in businesses that he knows and understands very well.

While the move may be a surprising one, it underscores a larger theme, which is that many top tech stocks have become so large and their businesses are so broad that investors don’t need to have a strong tech background to understand them and be able to confidently invest in them.

Image source: Getty Images.

Buffett has invested in tech stocks before

Tech stocks aren’t exactly foreign to Buffett. For years, Apple has been Berkshire’s largest holding and a business that Buffett has been fond of. To a lesser and smaller extent, Amazon has also found its way into Berkshire’s portfolio.

While these are considered tech stocks, they operate businesses, such as Alphabet, that Buffett and average consumers are highly familiar with. They aren’t incredibly complex businesses, such as those involved in quantum computing, where it may be difficult to understand how they work, why they work, or why they’re likely to succeed. Businesses like these are more relatable and easier to understand, making them more accessible to average investors.

It’s critical for investors to know what they’re investing in

Buffett says, “Risk comes from not knowing what you’re doing.” It’s important, whether someone’s considering investing in one of the “Magnificent Seven” stocks or a highly specialized tech company, to understand the core business and its strengths and weaknesses before buying it. Failing to understand it can expose an investor to risks they weren’t aware of.

Alphabet Stock Quote

Today’s Change

(-1.47%) $-5.18

Current Price

$346.19

Alphabet, a leading tech company, isn’t so specialized that people aren’t familiar with how it works. Google Search and YouTube generate the bulk of the company’s ad revenue. While there are other areas of its business, including cloud computing and robotaxis, its bread and butter centers around those two highly valuable assets. Buffett, recognizing the dominance that Alphabet has in its industry and the strong moat the company possesses, clearly recognized what many tech investors have known for a long time: it’s a great growth stock to own.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

123...856Page 1 of 856

About Us

Get the Latest Insights based on: business, finance, mortgage, credit cards, Investments and better Ways to Make Money Online

Categories

Latest news

Guide To Temporary Expanded Public Service Loan Forgiveness (TEPSLF)

Investments 0
Key PointsTEPSLF lets payments made on Graduated, Extended,...

US musicians union urges court to reject Universal and Warner bid to dismiss lawsuit over Suno and Udio deals

Business 0
The American Federation of Musicians (AFM) has urged...

Walmart: VIZIO 65-Inch Quantum 4K QLED TV on Sale for $196.80

Credit Card 0
Walmart: VIZIO 65-Inch Quantum 4K QLED TV on...

Popular news

Guide To Temporary Expanded Public Service Loan Forgiveness (TEPSLF)

Investments 0
Key PointsTEPSLF lets payments made on Graduated, Extended,...

US musicians union urges court to reject Universal and Warner bid to dismiss lawsuit over Suno and Udio deals

Business 0
The American Federation of Musicians (AFM) has urged...

Walmart: VIZIO 65-Inch Quantum 4K QLED TV on Sale for $196.80

Credit Card 0
Walmart: VIZIO 65-Inch Quantum 4K QLED TV on...

© 2024. All Rights Reserved.