Latest News: August 2024 Financial Update
Parachute Credit Counseling Offers FREE Student Loan Counseling
While June brought good news for student loan repayment when a federal judge gave a largely favorable ruling to a resoundingly political move where 11 states filed lawsuits to halt repayment assistance for student loans—the most recent news is unfortunately less optimistic.
This week, President Biden was forced to formally file an appeal with the Supreme Court, asking the justices to step in and reverse the most recent federal court order challenging his SAVE plan which is his $156 billion student loan debt forgiveness plan that he has spent several years refining.
The president is hoping to reverse the most recent action which negatively impacts not only the eight million Americans enrolled in the SAVE plan, but other borrowers pursuing loan forgiveness and reduced payments under separate programs that aren’t even subject to the current legal challenges.
Student Loans have been a major issue these past ten years, with national student loan debt totaling over $1.7 trillion. An entire generation of young people have been drowning as college costs rose exponentially—as did all living expenses—while salaries have not kept pace. Tens of thousands of local residents grapple with student loan repayment, financially and even more so, in understanding its many rules and complexities as well as its ever changing status. Parachute Credit Counseling, formerly known as Consumer Credit Counseling Service of Buffalo (CCCS), is the only organization in the Western New York region to offer free student loan counseling. Parachute strongly supports repayment assistance like the recently launched SAVE plan.
Under the SAVE plan, 8 million people are eligible for lower payments or potentially full debt forgiveness. The repayment plan calculates monthly loan payments based on income and family size as well as discretionary income. It has lowered the monthly repayment amounts for millions. Around half of the eligible borrowers saw their monthly payments drop to zero if they make/made under $16 an hour.
At present time, in response to the federal appeals court order, the Biden administration has placed more than eight million borrowers into an administrative forbearance. No payments are due during the forbearance period and no interest will accrue, but the forbearance will not count toward student loan forgiveness, including under Public Service Loan Forgiveness — an entirely separate program clearly authorized by Congress. And the Education Department has had to take down its online Income Driven Repayment (IDR) and Direct consolidation applications and pause IDR processing, even for borrowers not enrolled in SAVE, to update its systems and comply with the new court directive.
These latest actions are unwelcome and unhelpful for all, creating “widespread confusion and uncertainty,” according to Justice Department attorneys in their Supreme Court brief. “Indeed, as the Eighth Circuit acknowledged, this is unambiguously worse for all involved.”
Despite this forced “pause,” Parachute Credit Counseling continues to provide free student loan counseling and encourages WNY residents to use this time wisely by making an appointment for free counseling and working with a counselor to create a solid repayment plan—or even better, a plan for ongoing financial stability.
For many months, while all student loan news has focused on various court battles, it was recently announced that there will soon be even more news.
New Student Loan Forgiveness Plan Coming
This major new student loan forgiveness initiative is coming soon through an entirely separate program, expected to be released this fall. It is entirely separate from the SAVE plan, and will target relief to four categories of borrowers, including those who have experienced runaway interest and borrowers who first entered repayment at least 20 or 25 years ago.
There is no doubt that detractors will oppose this plan as well, but the president has not backed down on his promises to forgive student debt.
There is Good News
As previously mentioned:
Western New York residents are eligible for Free Student Loan Counseling at Parachute Credit Counseling.
Parachute Credit Counseling recommends that borrowers contact their office to enroll in the free Student Loan Counseling program, available to all residents of the eight counties of Western New York. Parachute’s Certified Financial Counselorshelp WNY residents consolidate their student loans and review other potential relief options and assistance with existing programs available to help borrowers reduce or eliminate their debt as well as help them in making payment plan arrangements. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information on our Student Loan Counseling Program.
Parachute also provides many other financial counseling services, from budgeting help to credit repair to buying a home. Nationally Certified Parachute counselors offer expert strategies for attaining financial stability, working with their clients every step of the way. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for information on financial counseling services.
