Valued Clients and Readers,
We hope this finds you all doing well… and not having to moonlight for gas money. Student loan debt has taken a backseat in national headlines as of late, but rest assured there’s still plenty of activity for us to update you with:
First, White House Chief of Staff Ron Klain suggested last week that the Biden administration is considering extending the student loan payment pause…again. Also, a recent story from Politico suggests the same. Inflation remains prevalent, gas prices are at all-time highs… and hey, mid-terms are coming up. All of these would justify an extension.
Klain also mentioned that before payments resume, the White House will make a final decision regarding any mass loan cancellation. President Biden has consistently said he only favors $10,000, and does not want to do it unilaterally. So we are not optimistic, but we’ll definitely keep you posted.
Until changes are announced, the best course of action is to still plan on repayment resuming after May 1st. Here’s how:
- Repayment Plan: Are you in the right one? If you’re pursuing PSLF, does the IDR plan you’re currently in maximize this benefit? Does your latest tax filing position you to keep your payments as low as possible when payments resume? Typically, if your marital status hasn’t changed and your income has been steady or increasing over the past 2 years, you can remain in the IDR plan you were in before the pandemic and simply await notification from your servicer that it’s time to renew.
- Refinancing: You may be riding out zero interest and no payments, but planning to refinance once payments kick in or rates start going up. While the restart of payments may be up in the air, we believe the rise in interest rates is about to begin. The Fed has indicated they will raise rates this month, and 2-4 times this year. We suggest you (at a least) get your low rate locked in now. We can show you a few tips to hold off on closing the loan until after May 1st in order to hedge your bet! Click here to meet with a member of our team at no cost, and get a jump on your refinancing strategy!
- PSLF: If you’re pursuing PSLF and have held off on completing Employment Certification, we suggest getting those forms into Fedloan soon to ensure your time spent in the CARES halt is counted. This is particularly important for those who also have action items related to the PSLF limited waiver which expires in October. If you missed it, check out our recent blog regarding the PSLF Waiver and Overhaul.
Finally, we’ll be hosting several webinars for 2022 medical, dental, pharmacy vet, and other health professional graduates this spring. These sessions are always free for borrowers to attend, so feel free to join us for a refresher on the market, or share this with peers who are in need of advice. They’ll thank you for it, we promise… https://slplive.wpengine.com/webinars/.
Brandon Barfield is the President and Co-Founder of Student Loan Professor, 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.