November 2011 Financial News Line Items

As part of the Budget Control Act of 2011, beginning July 1, 2012, interest on federal student loans for graduate and professional students will accrue while students are enrolled in school. Currently, interest on subsidized loans doesn't begin to accrue until six months after graduation. To compensate for the elimination of the subsidy, the maximum amount graduate students can borrow will be raised above the current maximum of $20,500 a year.

An Investment Company Institute survey found that in 2010, 3.5% of defined contribution (DC) retirement plan participants took withdrawals from their DC plan accounts, with 1.7% taking hardship withdrawals. Only 2.4% of participants stopped contributing as compared to 3.4% in 2009. And 10.3% of DC plan participants changed the asset allocation of their balances as compared to 11.8% in 2009.

Starting January 1, 2012, financial institutions will no longer sell paper U.S. savings bonds. According to the Bureau of the Public Debt, this action will save the government approximately $70 million over the first five years.

According to a survey by investment firm Devenir, the total number of tax-favored health savings accounts rose to 6.3 million in June 2011, a year-over-year increase of 28%. The average account balance increased 12.5% from $1,640 at the end of 2010 to $1,845 in 2011.

_{The general information in this publication is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purpose of avoiding tax penalties.}