January 2023 Student Loan Updates

We hope this update finds you healthy and happy as the New Year is in full swing. The student loan marketplace is similarly back in action in 2023, continuing to evolve with new details regarding Income-Driven Repayment (IDR) plan options and Biden’s quest to deliver broad loan cancellation, the latter of which has run into as much resistance as the TCU offense against Georgia in the college football National Championship… but we digress. (Ok, as a lifelong Georgia fan, this author will try to resist the opportunity to further gloat…)

Income-Driven Repayment (IDR) Plan Overhaul

The new repayment plan previewed by the Biden administration back in August was rife with attractive features, such as lower payments and the elimination of interest accrual. That said, we needed the fine print to really see if this plan would be a good option specifically for you, our graduate health clients and readers.

We finally got those details last week and were pleased to learn that the overhaul will actually be a revamp of the REPAYE plan, essentially making it a new plan. There will also be increasing limitations around using some of the other existing IDR plans. Ideally, the new plan will deliver economic benefits that outweigh all other plans, thus compelling most borrower into it. Check out our dedicated blog to get all the details and find out if this “new plan” might be a good fit for you.

Latest on Supreme Court Showdown

The administration recently filed its brief for the upcoming Supreme Court case, which laid out the same two arguments we’ve been hearing from the beginning:

1. The administration DOES have the right to cancel student loans in mass.
2. The plaintiffs have not properly demonstrated they were harmed by the policy, and therefore have no right to sue. (If you want to see a clear-cut case of harm, go back and watch the replays of Georgia sacking the TCU quarterback. I can’t help myself.)

The popular opinion among pundits is that the Supreme Court will uphold the injunctions and ultimately block the policy, though many are saying the case laid out in this brief is compelling. We’ll refrain on forming an opinion on which way these cases will go. Unlike the Georgia outcome, this could go either way (don’t hate me).

Is Refinancing Still Available or Appropriate?

Alas, refinancing rates continue to rise as the Fed raised interest rates seven times in 2022 in an effort to fight inflation. Recent positive signs in the economy indicate a slowdown of this trend. While we work with multiple lenders, we must spotlight our friends over at Sofi, who have been diligent in their quest to deliver rates lower than federal student loans, and are offering “stackable” discounts for some borrowers. Depending on your profile you may able to reduce their already great rates by an additional 1.375%! Be sure to let one of our experts work with you on this, as not everyone qualifies for every discount. Plus it’s a free service, so why not?

Tax Season is Nigh

Nothing kills the joy of starting a new year like having to file taxes. For those who are married with student loans, we know your repayment strategy adds an extra layer of complexity onto you tax filing considerations. But this latest extension of the CARES Act (resulting from the Supreme Court case) gives you another year that you may not have to file Married Filing Separately, as it’s possible you may not have to recertify at all in 2023. Even if payments were to resume by June 1^st, only 1 in 12 borrowers  would need to recertify this year. That’s better odds than (wait for it…) TCU had against Georgia! If you’re not clear on the rules regarding recertification dates, check out earlier blog here.

That’s enough announcements and football fun for now. As always, check out dwoq.com or reach out to our team at help@slplive.wpengine.com if we can be of any assistance. Or connect with your assigned advisor if you’re already an annual client.

Disclaimer: The football opinions expressed above are held solely by the Director, and do not necessarily reflect the beliefs of all DWOQ team members. If you ever see our theme colors change to red and black, then you’ll know I’ve won them over. GO DAWGS!

Brandon Barfield

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.