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College Loan Forgiveness Struck Down: What Now?

College Loan Forgiveness Struck Down: What Now?

July 03, 2023

On Friday, the Supreme Court struck down the Biden administration's student loan forgiveness plan and borrowers will have to start repaying federal student loans in October for the first time since the pandemic began in 2020. This ruling is heartbreaking for some who were counting on the forgiveness and leaves many asking, "What next?" 

As much as many could have benefited from this forgiveness plan, it was clear it would be challenged since it was first announced. As such, this outcome should have been on borrowers' radars, regardless of their opinions on the plan. We value civic engagement here at Bergenn Financial Group. Still, we also understand that when it comes to our money we must think critically and act with the best information available at the current moment. Right now there is one apparent reality: borrowers have to immediately develop a financial plan that includes paying off their student loans.  

Here are some next steps every borrower should consider:

  • Understand your payment options (the Dept of Education has a website to calculate or estimate at studentaid.gov)
  • Consider other loan forgiveness eligibility such as Public Service Loan Forgiveness, also known as PSLF.
  • ´╗┐Develop a plan to pay back loans and consider how it will impact all of your other financial planning.
  • ´╗┐Understand how provisions of the Secure Act 2.0 may impact your ability to pay off loans and save for retirement at the same time. 

Unfortunately, like all financial decisions, there is no magic pill here.  It's essential to understand the opportunity costs of all options and how they will be impacted by factors like interest rates, cash flow needs, investing vs. paying off loans, and the best order to pay off different loans.  Also like other financial decisions, the best thing to do may change as other factors in your life change. If you'd like to schedule a time to sit with an advisor, you can visit our Contact Us page and call, email, or use the scheduling feature to book a time.  You can also use our Contact Us page to send a message to provide us with some feedback.