ATLANTA — President Biden has vetoed another attempt to block his student loan forgiveness plan, setting the stage for a potential Supreme Court ruling that could impact millions of borrowers. With uncertainty looming, financial expert Bradley Rosen advises borrowers to be proactive and take early steps to prepare for potential changes.
"With the 60 days that we have left before this is going to start, you need to start obviously saving more money to put aside for your student loan," Rosen said.
Rosen emphasizes the importance of knowing one's financial situation and suggests identifying areas where expenses can be cut down. He points out that the recent changes in the federal budget, including the debt ceiling deal, indicate that loan payments will need to be restarted soon unless there is a major emergency. This means borrowers should expect payments to resume 60 days after June 30.
The Department of Education is also prohibited from extending the pause any further. These developments mean that millions of Americans, who have been relieved from making loan payments during the pause, will now face a different financial landscape.
"Part of the debt ceiling deal was to have this be the last time we have this kind of freeze on loans unless there was a major emergency. But otherwise, payments needed to be restarted," Rosen said.
Rosen acknowledges that rising inflation has made money tight for many borrowers, underscoring the need for early action. He advises reaching out to loan servicers, either through online tools like StudentAid.gov or by contacting the loan company directly. By doing so, borrowers can work out the best repayment plan for their budgets. Rosen also warns against waiting too long to resume payments, as late penalties and accumulated interest can be disastrous for those on fixed budgets.
Regarding the pending Supreme Court decision on Biden's student loan plan, Rosen highlights the need for borrowers to start planning regardless of the outcome. The uncertainty surrounding the court's ruling makes it even more crucial for individuals to take control of their financial situation and be prepared for potential changes in student loan forgiveness policies.
As the Supreme Court prepares to rule on the matter, Rosen said for borrowers to be proactive. He encourages borrowers to assess their finances, explore repayment options, and initiate contact with loan servicers to avoid potential penalties and financial difficulties in the future.