Page 12 - August 2023 Issue.indd

DOLLARS AND SENSE by Tolbert Rowe

Supreme Court rejects student loan forgiveness program!

The Supreme Court rejection (about $4,900 per person in the US) relief for workers in public service jobs
of President Biden’s student need to prepare financially to begin like teaching, nursing, law enforcement
loan forgiveness program put a making payments on their student non-profits and state and federal
sledgehammer to one of the pillars of loans in September. About half of these government employees. If you are in
his election platform. Young voters borrowers owe less than $20,000 and one of these professions and make less
used the possibility of having their have been conditioned not only to not than $100,000 per year, you may be
student loan debt expunged as a reason making monthly payments but also had eligible for some kind of forgiveness.
to support Joe Biden. With the slim been looking forward to being relieved Also, income driven repayment plans
margins of victory in several key states, of any repayment at all. were revamped under the Revised Pay
had this promise not been made, the
It is estimated that nearly 40 million of as You Earn Plan which is now called
result of the election could have been
the 43 million holders of student loan the “Saving on a Valuable Education
diff erent.
debt would have qualified for some relief Plan” (SAVE). You may be eligible for

The Supreme Court, in a 6-3 decision by a reduction of their loan balance. 16 some relief based on your income and

found that although Education million of the 26 million borrowers who family size. You could pay as little as 5%
Secretary Miguel Cardona holds some applied for the forgiveness program of your discretionary income monthly
power to “waive or modify” the terms of were approved in the few months the with elimination of up to $12,000 of
student aid programs, he does not have program was open. Needless to say, the the outstanding balance at the end of
authority to “rewrite that statute from Supreme Court’s action is a huge kick ten years.
the ground up” as stated in Chief Justice in the pocketbook for a lot of people.
The calculation of “discretionary
Roberts opinion. The Chief Justice
Moving forward, what should you do if income”, which is what is left after
even quoted former speaker Nancy
you have student loans? First, don’t stick paying taxes, everyday expenses and
Pelosi who said at a press conference in your head in the sand thinking that household bills, is being changed so that
2021 that although the president could your lender will forget about you, they those whose income is less than 225%
postpone student loan payments, only
won’t! President Biden has promised of the Federal Poverty Level may not
Congress had the authority to cancel

that he will find another way, and with have to make any payment. This is up

the debt outright.
progressive Democrats screaming in his from 150% previously and makes more
Not only did the Supreme Court rain ear he will be pushing every button he people eligible. Additional information

on President Biden’s parade, the former can find to make it happen. My advice... about the SAVE plan can be found at
Speaker of the House of his party didn’t don’t count on it. www.studentaid.gov.
even provide an umbrella of support to
Currently here are two established Right now, the most important thing
cover his actions.
programs that may provide some relief. you need to do is contact your loan

Bottom line, 43 million Americans with The Public Service Loan Forgiveness servicer, assuming that you know
student loan debt totaling $1.6 trillion Program, or PSLF, streamlined debt who they are. Millions of student loan
holders have graduated from college
since 2020 and have never made a
“Your Mortgage Consultant Since 1985”
payment or been notified of who is

servicing their loan. They owe but do
Purchase or Refinance not know who to pay.
Millions of others have had their
accounts moved to diff erent servicers
especially those whose loans were
serviced by Navient who exited the
115 E Dover St. Ste 3 - Easton, MD student loan business several years

tolbert@baycapitalmortgage.com C. Tolbert Rowe, ago. The Consumer Finance Protection
www.baycapitalmortgage.com NMLS Vice President/Lending Bureau estimates that as many as 40%
182844
of borrowers will have a new servicer
410-819-3005 / cell 410-310-3520 when payments resume.
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