Student Loan Forgiveness Updates

The Supreme Court struck down the president’s student loan forgiveness plan. What does that mean for your loans?

Though President Biden announced intentions to find another path to loan forgiveness, it’s wise to plan for repayments to resume on schedule on October. Keep in mind that interest begins accruing again on September 1.

What Should You Do About Your Loans?

Here are 4 specific recommendations:

Get Updated Details On Your Loan At Studentaid.gov

Since the government paused federal loan payments in early 2020, some specifics about your loan servicer or your personal information may have changed.

You’ll want to check and update your account information as needed to be sure that future payments go where intended.

Determine Whether You’re Eligible For Any Special Programs

Though the Supreme Court blocked a significant loan forgiveness program, you may qualify for loan forgiveness or special repayment terms under current programs.

Programs such as the Saving on a Valuable Education (SAVE) plan, Public Service Loan Forgiveness, Teacher Loan Forgiveness, or other federal or state-sponsored programs may allow you to lower your payments and even get some or all of your loans forgiven if you’re eligible.

Studentaid.gov is a good place to gather information about any programs you might qualify for.

Decide On A Payment Plan That Works For You

You may have several payment plans available to you with different terms. Decide which one fits your current financial needs and consider setting up automatic payments (some loan servicers offer a discount if you do).

Note: I’d generally recommend against refinancing your loans right now as rates are high, but I’m happy to review options with you.

Start Setting Aside Monthly Payments Now

You’re not alone if you’ve gotten accustomed to using your loan repayment budget elsewhere.

Once you know how much you’ll be paying each month, I’d strongly recommend setting that amount now so you can get used to the change in your budget.

Systems may be overwhelmed around October 1, so plan ahead to avoid technical issues.

Sources:

1. https://www.cnbc.com/2023/06/30/supreme-court-biden-student-loan-forgiveness-plan.html

2. https://www.cnbc.com/2023/06/20/its-official-student-loan-payments-will-restart-in-october.html