ORLANDO, Fla. – One in 5 U.S. families hold student loan debt in the U.S., according to recent data from the Federal Reserve Survey of Consumer Finances, and those families are hoping that long-term debt will “go away” very soon.
Within the next 24 hours, the U.S. Supreme Court could issue a ruling to decide the fate of that debt and the families who owe a record median of $22,000 in student loans.
The impact for Floridians is compelling, as an estimated 2.623 million people hold student debt, giving our state the distinction of having the third highest number of borrowers in the country.
Jacob Channel, senior analyst with LendingTree.com, said he is not making predictions but anyone facing student loans should assume the worst.
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“Look at how much student debt loan you have, assume that it is not going to be forgiven,” Channel told News 6. “(Ask yourself), ‘What would my new monthly payment be? Can I make the payment?’”
Channel said he is not making predictions but if the court rules against the loan forgiveness plan, you should expect to start repaying the loans again this year.
“I don’t know if they will or won’t be forgiven,” Channel said. “But if we assume they won’t be forgiven by the end of this year at the latest, you should be expecting to make your student loan payments, but probably sooner, closer to the end of summer.”
The court heard oral arguments at the end of February for two of the legal challenges launched to block Biden’s plan to erase up to $20,000 per student loan coast to coast.
The court’s June decisions are usually issued on Thursdays, which means a decision could be announced at 10 a.m. Thursday.
In terms of financial impact, the Biden plan holds a hefty price tag of roughly $400 billion in loans, making it one of the most expensive presidential actions on record.
The decision comes down to the president’s power to implement the debt forgiveness policy.
Most observers feel the court will rule against Biden’s plan.
If that happens and you know you cannot meet the monthly note, Channel urges you to call your lender now.
“The truth is your loan servicers don’t actually want you to default. It’s much more work for them when you’re not making your payments,” Channel said. “The more proactive you are right now, the easier it will be for you in the future.”
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