Biden's bill was rejected

Author

Stanley Tate
June 30, 2023

Disappointing news from the Supreme Court today.

Biden’s plan to cancel up to $20k of student loan debt was rejected. And the 44 million borrowers this was set to benefit…well, this is a sad day for them.

Remember, there are two cases. One from Texas and the other from Missouri.

In the Texas case, the justices ruled the parties lacked standing. But in the Missouri case, the vote is 6-3. Kagan dissents, joined by Sotomayor and Jackson. The justices agree with the states that the HEROES Act does not authorize the debt forgiveness plan.

The Education Department has not yet mentioned the proposed plan B yet.

But don’t worry—there’s still hope.

We’ll have a deeper dive into the Court’s opinion in next week’s newsletter when I’m back from vacation. But for now, let’s talk about other options to deal with your loans.

⏭️ So, what happens now?

If you were counting on this forgiveness, I’m sorry. And I share your frustration.

But look—there are other ways to reduce your federal loans or get rid of them for good.

We just gotta get creative.

Here’s what you can do:

🔎 Explore other forgiveness options

Read my complete forgiveness guide here. It includes a deep dive on each of these forgiveness programs:

  • Public Service Loan Forgiveness (PSLF): If you work for the government or a non-profit

  • IDR (Income-Driven Repayment) Forgiveness: If you’ve had your loans for 20 years or more

  • Disability Forgiveness: If you have a permanent disability

  • Borrower Defense: If your school lied to you

  • Teacher Forgiveness: For teachers in low-income areas

  • School closed cancellation: If your school closed

If you’re not sure which forgiveness program suits you best, let’s jump on a call, and we’ll go through it together.

🙏More help is coming

Biden administration officials are working on strategies to soften the blow as millions of Americans are set to resume their student loan payments this fall after a pause lasting over three years.

  • Servicers are being instructed to give borrowers a 'grace' or 'safety net' period of 3 months, during which missed payments won't be marked as delinquent, though interest will keep accruing. There's potential for an extension of this grace period.

  • In a few weeks, the administration will roll out new income-driven repayment regulations and quickly put them into action. The focus of these proposed regulations is to revise the current REPAYE plan. The new plan is expected to be renamed as SAVE, an acronym for Saving on a Valuable Education.

  • While reporting on this matter isn't fully clear, there is anticipation that the new SAVE plan will replace the existing REPAYE. This change would mean borrowers already in REPAYE would automatically transition to SAVE, which holds notable advantages over the existing REPAYE, without needing to switch plans manually.

Take care,

Tate