7.23.2023 I Student Loan Forgiveness: What's Next?

Your Money Radio

• In late June, the Supreme Court of the United States (SCOTUS) struck down the Biden administration’s plan to forgive student debt
• The Biden Administration has vowed to move forward with loan forgiveness under separate legal authorities

What's Next?

• The SCOTUS decision follows a three-year pause in loan repayments for millions of American students that began in March 2020
• If you have federal student loans, interest will start accruing on Sept. 1, 2023, and the first payments are due in October, according to the US Department of Education
• Given the high expected volume of calls to loan servicers, now is the time to get organized to restart your student loan payments
• What if your loans were in default before the loan pause began in 2020?
• Average total published charges for full-time undergraduates at four-year US colleges and universities, 2022-23:

o Total tuition, fees, room and board at public in-state: $10,940

o Total tuition, fees, room and board at public out-of-state: $28,240

o Total tuition, fees, room and board at private in-state: $39,400

Education Planning Options for Parents

• Consider funding 529 accounts for kids or grandkids
• Custodial accounts give the child more control over the money
• Set up a Coverdell Education Savings Account for simpler needs
• Take advantage of federal tax breaks

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