working on mine for when it comes thru Remember dem govt. “entitlement” programs are hard to reverse. think Obamacare
Regardless if it gets shot down what it has taught me it’s best to wait and pay the minimum. Either PSLF or IDR forgiveness will take care of it long term. The Dems will have a non filibuster majority soon enough when the pendulum goes the other way. Of course the negative is interest, but with HYSA/ treasury rates being this high it is a good bet to take.
Just got another payment pause till 6/30 (which counts toward forgiveness time!) Thanks Uncle Joe (and GOP litigants!) Payments have been paused for over 2 years now.
I will only get 1 year out of that thanks to false info from my FFEL processor, but now I’m in the ED govt. boat so automatic pause. My wife will get hers forgiven by PSLF soon too. Would have been close to Jan 1 deadline, but now thanks to the litigation we should be good there too…
According to the press release, student-loan payments will resume 60 days after the administration is permitted to implement the program. “If the program has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that,” the release said. Biden Extends the Student-Loan Payment Pause up to 6 More Months.
I do understand this extension though - it’s the same effect as an injuction to prevent damages from accruing while a case is pending. People shouldnt have to make payments on debt they may later be told didnt exist. It should be limited only to those with approved forgiveness applications - since Biden was so blantant in announcing people have been approved - but that makes it messy and really confusing. (See, while I dislike this program and the ongoing payment pauses, I can still look at it objectively!)
What if the litigation has been resolved by that time? Will the pause also end 60 days after a decision that permanently bars this program?
What is in front of the supreme court right now is the question of whether or not to lift the injunction stopping the dept of ed from paying out the forgiveness. Dollars to donuts the supreme court leaves that injunction in place in the near future. Then the case(s) in which the injunctions have been issued will have to be decided on the merits. The one claiming that all borrowers that weren’t forgiven should have had the opportunity to tell the department of ed why they should have been forgiven though a notice and comment period will probably lose on the merits. But the case where Louisiana (I think) is claiming that the department of ed is costing them money and they don’t have the right to do that via executive edict will probably win on the merits. That will be sometime in the spring. If that happens, the department of ed will appeal straight to the supreme court. Then the supreme court will likely deny certiorari a few months after that. That will be the final decision. So it will depend on how long the lower court takes to put out its decision before we get something final. With the new pause, there’s no rush on any of this. I have no real guess on a timeline.
Meanwhile The years long freeze on payments and interest is expected to cost the government $155 billion though the end of 2022, according to an estimate from the Committee for a Responsible Federal Budget. The new extension will add to that total.
So eventually the pause will get close to forgiveness costs.
If the forgiveness is deemed illegal, the ongoing payment pause should be included in that ruling as well.
I dont think anyone thought that the day following the election, Democrats would say “Naw, we werent really serious about that!” They’ve always been completely behind the handout, the stumbling block has been the legality of trying to get it done by going around Congress. The immediate “carrot” wasnt the forgiveness itself, it was the timing of their decision to move ahead with it despite the same inevitable legal obstacles that have already delayed it this long. They stopped looking for a legal way to do it, and just proceeded while knowing the courts would likely kill it but only after many millions of people had bought into it happening.
The stage is already set perfectly, for all those “The Court makes politically-driven decision as retribution!” headlines instead of “The President tried to do something illegal!”
Without 60 votes in the Senate, they couldnt break the inevitable filibuster. And if I remember correctly, it doesnt fit in a reconciliation bill that bypasses the filibuster. They would’ve passed legislation if they could’ve. What we see now was the only option they had.
On the face of it, asking for blanket loan forgiveness using a law for veterans or those directly impacted by a (covid) national emergency seems pretty far fetched, and the judges have ruled similarly so far.
The nice take I saw on the legal issues around loan forgiveness was in reference to Biden’s approach of using the Hero’s Act instead of the Higher Education Act of 1965. In particular, Warren and Co asked Biden to cancel debt a year ago under the HEA, not HEROES.
So the cynic might say Biden choose the weakest legal basis to push for debt forgiveness right into midterms, knowing it would likely fail and could be recycled, possibly with a better basis, for 2024. Or maybe the same guy who passed the law that made student loan debt not dischargeable in bankruptcy is still the Senator from MBNA and doesn’t want it to succeed at all.
that might be the strategy, if they get a do over. Regardless good bet to take with 2.8% interest.
Irony is I am a Vet that will take HEA or HEROES. Unfortunately most of my service was prior to 2007 so didn’t qualify for PSLF. I might switch from being a state contractor to employee next year, but would mean 7+ yrs b/f forgiveness.
Not sure where you’re getting the idea @jesselivermore that there was ever a chance of a student loan bailout of this magnitude ever making it through a senate that wasn’t filibuster proof. I never saw a single pundit claim it was something that the dems had on the table.
i’m kinda liking these delays now, as long as the outcome is favorable to students. My wifes PSLF application is taking longer to process since ED is doing them manually in batches and they received a TON of applications (like ourselves) given all they hype Biden’s plan brought