The Court just struck down affirmative action this morning, and the Chief Justice said that tomorrow (June 30) will be the final day of the term.
That means we'll know the student debt cancellation decision by about 10:30am ET tomorrow.
If it goes through, it will be based on a technicality that none of the groups suing have shown an economic injury.
If it gets blocked, which is the more likely outcome, Biden will feel enormous pressure from the progressive wing of his party to try and cancel debt through the Higher Education Act (HEA).
Several members of the Congressional Progressive Caucus (CPC) have also urged Biden to extend the pause again even though the law says he must restart payments by August 30.
I do not believe we are going to see anything resembling a new pause.
At best, Biden might allow a one year forbearance period that anyone can opt into to soften the blow of payments restarting.
But unlike the Covid forbearance, this forbearance would not count towards forgiveness and interest would continue to accrue.
There might be a strategic case to be made for opting into this if your payment is expected to plummet when New IDR (Income Dependent Repayment) comes out in 2024.
But that's putting the cart before the horse. We'll have a ton of analysis about what they decide to do, whatever it is.
I'll probably have an update for you tomorrow too given how long many folks have been waiting to know this decision one way or the other.
Also, the CFPB (Consumer Financial Protection Bureau) is warning that the end of the student loan pause could be disastrous. I think it will be for lower income individuals and for those who don't know their options. But with strategic forbearance, new income driven options, and the waivers going on, you have a lot of tools at your disposal to minimize the pain as much as possible!
Remember we have a ton of year end deadlines like the IDR waiver as well as the New IDR plan to consider.
And we'll be here to help!
Shoot us an E-mail if you would like to discuss your options