By: David Gourley, CSLP®
This is an excerpt from David's weekly newsletter that was delivered to recipients on 6/20/2023. If you find this content valuable and would like to see more like it and on financial planning for teachers in general, you can subscribe to the newsletter below: Sign Up
It seems as though the student loan landscape changes every few weeks…
So, it’s time for an update!
Before we jump into it,
I wanted to share something with you…
*Hopefully so you feel inclined to share this with others!*
Every week I meet with 6-12 people for student loan consultations.
I would say 75% of those I meet with are eligible for IMMEDIATE forgiveness.
Here’s what is crazy about that…
We went through the PSLF limited waiver,
Which allowed teachers (and other public servants),
To count previous credits towards the 120 needed for loan forgiveness.
There was a BIG push to get everyone in by October 31st,
When the limited waiver ended.
By the time the dust settled…
It was estimated that only 15% of eligible public servants took advantage of it.
Now, we have been given another amazing opportunity.
It’s actually considerably better than the PSLF limited waiver.
This one is called the IDR waiver.
The IDR waiver is pretty much everything that the PSLF limited waiver was…
Plus, it potentially adds in months of forbearance and deferments
(Depending on your situation).
So here we are in June of 2023…
Almost 2 full years after the PSLF limited waiver was announced…
And I still meet with that many people who qualify for IMMEDIATE forgiveness!!!
We’ve got a lot of work to do.
So, I’ll ask once more that you share this email with your teacher (or public service employee) network.
People are sitting on their own golden tickets and don’t have a clue.
If you are (or know) a teacher who has been teaching for 10+ years…
With student loan debt…
There is an awfully good chance I can help you/them out.
Schedule a call to talk through your loan situation here:
Ok, let’s get to the update on student loans!
1. Interest on federal student loans will start accruing on September 1.
Payments will start likely at the end of September.
Please, please, please…
Start figuring out where the money is going to come from now.
Most people haven’t paid on a federal student loan since March 2020…
Your lifestyle has likely changed in the past 3 years,
As well as inflation increasing by insane amounts.
2. Your repayment plan will impact your monthly payment.
If you graduated in the past 3 years,
You are likely going to be started on the standard repayment plan.
This method will pay off your loans in a 10 year period.
If you have a large family or a lower income…
You might consider an income-driven repayment plan.
There are currently 5 to choose from.
It can get pretty confusing.
3. The supreme court is scheduled to rule on the $10,000/$20,000 student loan forgiveness this coming week.
The impact of this will likely not impact anyone who is going for PSLF… directly!
However, there are potential side effects.
The top one being that some believe if cancellation is blocked,
Then the Biden administration will go even harder on the new repayment plan.
We’ll see what comes from the ruling first.
June 22nd is the date to watch for this ruling.
4. Let’s talk about that new repayment plan.
We are calling it the modified REPAYE.
Right now the talk is that it will be set at 225% of the federal poverty guideline…
And 5-10% of discretionary income based on how much of your loans were from undergrad and how much were from grad school.
If the Supreme Court rules against the blanket forgiveness…
Some think the Biden administration will go up to 400% of the federal poverty guideline.
This might mean very little to you,
But it would mean extreme savings for a lot of people!
I’ll keep you updated when I hear more.
For now, we need to focus on what we can control…
As there is a whole lot we can’t control.
So what can you focus on is:
- Making sure you understand your repayment options.
- If you are working towards PSLF, get in the lowest repayment option.
- Build the payment into your budget now!
- Consolidate, if needed, before the end of 2023.
- Get employer certification forms signed and turned in to Mohela.
- Talk with other teachers who have loans to see if they’ve reached out for help.
- Send any teacher with questions to schedule a call with me below:
I will continue to update you as I learn more.
As always, You Teach, We’ll Plan, You Retire!
David Gourley, CSLP® is a Financial Planner with Teach Plan Retire, an independent financial planning firm specializing in finance for teachers. He served for eight years as a high school mathematics teacher before transitioning into the financial services industry. He joined Teach Plan Retire in 2022 and his passion for serving as a fiduciary for teachers and a student loan planning expert runs deep, as his wife and several other family members have served as educators for years. He's a proud member of the Financial Planning Association of Greater Kansas City.