September 2023 Student Loan Updates

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Sep 18, 2023

Introduction To Income Driven Repayment Plans

Student loan headlines have been abundant this year, particularly regarding Income Driven Repayment (IDR) plans. Whether it’s the new SAVE plan, the IDR One-Time Account Adjustment, or enhancements to the Public Service Loan Forgiveness program (of which you need an IDR plan to utilize), there should be no doubt in any borrower’s mind this is a big deal. It is critical for any borrower with Federal student loans to understand how these plans work, what each person’s options are, and what changes are taking place. While we’ve worked hard to keep our readers updated on the recent changes, we’re offering a new helpful resource this month: this 30-minute video thoroughly breaks down all of the plans, compares the differences between them, and lays out the changes which are taking place over the next year. Because this is so important, we’ll follow-up with a complementary video in the next couple of weeks showing how to strategically navigate the plans in order to maximize savings.  

Latest Servicer Debacles

A few months back, I mentioned that Congress and Department of Education did not approve their request for a budget increase, which effectively dealt them a budget cut. This led to slashed call center hours and reduced staff. Now combined with the rather short notice from the Biden administration regarding the new SAVE plan (we can also thank SCOTUS for that), you have a perfect storm.

Servicers are struggling to switch borrowers to the new SAVE plan and get the payments properly calculated. There is a huge issue with borrowers being put into the 10-year payment plans right now, which are typically resulting in much larger payments being due in October. The only way to fix it is to call in and ask for a manual payment plan adjustment, which they cannot seem to do in real time. So, they tell you it will be fixed within 5 days (insert your favorite skeptical meme here). The result is eye-popping hold times like I have never seen. We are getting regular reports of 4, 6, and even 10-hour hold times! One borrower told us they spent a total of 14 hours on the phone with their servicer over the course of a week, just simply trying to get off the 10-year plan and back onto their IDR plan. We can only hope this will be resolved soon. The only remedy I have at this time is to call your servicer as soon as they open, or within an hour of closing. Those seem to be the shortest wait times. Do not call around lunch time! While we unfortunately cannot make these calls on your behalf, we can help you determine which repayment option is best. And we wish you the best of luck when you do start dialing! 

Sofi Is at It Again!

We generally don’t advertise for companies. But when we see value, we like to bring it to your attention. Refinancing rates are high right now, and in many cases, higher than your Federal loan rates. But our partners at SoFi are working hard to offer our clients the best possible savings, and we’ve recently updated the terms of our referral agreement with them. Instead of getting a $500 cash bonus when you use our link, you will now receive a .25% rate discount. If you’re not a math whiz, let me show you why this is a big deal: if you have a $200k loan, the .25% discount saves you an additional $500 interest in the first year alone, and it continues to save you money over the life of the loan. In most cases this will generate thousands of dollars in additional savings. Furthermore, they are offering an additional .125% for all of our clients through 12/15, and an additional .5% for physicians and dentists through 12/1. That’s a whopping .875%, and in the finance world, that’s huge! So, if you’ve been waiting to refinance, use our link to do a quick rate check to see if these offers can generate savings for you. Better yet, schedule a free call* with us to guide you through the refinancing considerations and process.  

Biden’s Next Loan Forgiveness Initiative

Those of you who were disappointed (to put it mildly) when SCOTUS shot down President Biden’s loan forgiveness plan certainly took note when he came out the very same day and said another plan was in the works. We previously reported that this new plan would follow a different, more procedural approach, in the hopes of passing legal scrutiny in the courts. We’re happy to share that the process has begun. The Negotiated Rulemaking (Neg Reg) process recently kicked off by soliciting comments and panel members. Before any new student loan rule can be formally introduced, the Department of Education must first allow the public and industry experts to weigh in on it. If you’re on “Team Forgiveness”, you will be happy to know that the Department of Education can roll with whatever rules they want at the end of the Neg Reg hearings, regardless of the comments. And we all know where Secretary Cardona stands here. The not-so-great news is that the procedural rules dictate that the final plan must be announced by November 1st in order to go into effect the following July. I’ll stop short of saying that’s an impossible timeline, but it would be unprecedented.  

We will keep you up-to date on these and other stories. If you’d like your student loan news more often than monthly, please follow us on our social media sites below. And if you haven’t signed up for a student loan consultation to review your loan repayment strategy, I recommend doing that ASAP. 

As always, thanks for your time, and ‘til debt do us part!  

*For debt levels of $50k and above. 


  • Brandon Barfield

    Brandon Barfield is the President and Co-Founder of DWOQ, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.

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