PSFL and IDR Plans May Be OVER - Student Loan Debt Relief Update - September 9, 2024

four days ago I posted a video and told every single person that I believed that all of the ID plans that exist were in danger I made a very very very specific analysis in my video where I was talking about the newest lawsuit against the Department of Education the B Administration with regard to student loan debt relief and student loan forgiveness and I made it clear that in my analysis I believed that this was not going to be limited to the save plan right that I believed that because of how everything had been packaged together and the language that was being used that every single IDR plan was at risk that this could potentially mean the end of income driven repayment for all student loans all federal student loans and even if it survived it may mean the end of the forgiven portion of the IDR plans even if you've been paying for decades like you were supposed to this could mean the end of it to where there is no relief and I also stated that I believed the borrow defense could be at risk because of this lawsuit and I explained why because the reality is none of this was new uh this was not this was not anything new that the Biden Administration was proposing all they did was take existing things and repackage them and because of these GOP Le States wanting to attack these quote unquote new things that were just repackaged versions of things that already exist all those things currently in existence could be struck down no one in the mainstream media was reporting on this and I mean no one I even called that out in my video well now 4 days later here you go the mainstream media is finally stating what I said the analysis that I gave that none of them were writing about and we know none of them are writing about because we went through the Articles together no one was saying this and I even called it out I'm going to show you a clip of that video just a minute long and then we'll get into this latest article where they're giving more information now but I called it out and they said no one's reporting on this because this is really important that everyone needs to know that there may be nothing left of any IDR plan at the end of this stay tuned let's get into [Music] it hi everyone and welcome back to reality check with Jess thank you so much for joining me if you're new here please make sure that you like and subscribe and ring that Bell that way you can stay up to dat whenever I post new videos and as always I have my C cash app below Torah blessed if you are able and willing to donate I would absolutely appreciate it I truly truly would so I want to show you guys this clip just a minute long and then we're going to get into this new article but it's just to show you my analysis and me even mentioning that the media was not saying anything remotely similar to this but guess what now they are all right take a look at this you know this is really wild because like I said they've gone after multiple things um in this lawsuit because of how it was packaged together they're now going after income based rep payment they are going after um borrow defense essentially right um they they're going after when I say income based or payment not just being able to pay based on your income right but also the forgiveness at the end of income based rep payment which happens decades after you've been paying so it's really concerning if you think about it um depending on the rulings that could happen and where they can go from there because all of this is attached so I don't think that's anything that anybody has mentioned yet on any video or in any media Outlet there you have it I had called it out then there were no videos stating that there were no media Outlets stating that you know and as always I say this is not legal or financial advice I have to make that disclaimer but this was my analysis and no one else was making the same analysis but now they are minus the fact of they haven't yet mentioned borrower events right um right now they're just saying IDR plans could be at risk but I believe borrow defense is also at risk for the reasons I stated in that video if you're unsure about that go and check out that video you can go to my student loan uh playlist and you'll be able to see it it's my student loan update for September 5th 2024 um so that way you can get the full details right so here goes a new article by Forbes right and just to show you right give you the receipts this article is posted on on September 9th 2024 all right that's 4 days after I made my video and stated what I stated well first things first with this they're stating that now an updated Court briefing schedule suggests that bars could be stuck in limbo well into 2025 so the forbearance that is currently on everyone's federal student loans who's in the save plan was scheduled to essentially end next month and then probably repayment start the month after that's likely how it was going to work out but now they're stating that basically this uh forbearance could last for a year now mind you this is not like the pandemic forbearance none of this time is counted not towards pslf and not towards um uh not towards General forgiveness at all and the sticky situation for people is that there's a variety of outcomes that could happen uh a judge could knock every single thing down every IDR plan the judge could just knock down save plan and then in that point you've lost a year or they could say okay the save plan's allowed to stay but only for people already already enrolled so it's really a tossup of what people want to do right um because I think the only other one right now is icr I'd have to double check but remember they got rid of repaye they already Sunset that they Sunset it before save even really I guess was officially enacted at this point um it's it's uh it's a problem it's a real problem U there's I don't think there's really anyone who can give you advice on what to do because no one knows if someone says they know they're not telling the truth no one knows the government doesn't even know okay and it's their plans they don't know and they're a party to the lawsuits so no one knows what can happen um everyone's really just in limbo and basically losing times towards forgiveness that's the reality excuse me so now they are saying what I have said student loan forgiveness under IDR plans may also now be at risk as courts examine the intent of legislation Congress passed more than 30 years ago right and then and a separate upcoming debt relief program the administration had hoped to begin implementing this fall has now been stopped by another federal court so let's go into it right again confirming what I've already said during the forbearance no payments are due in no interest will acrew but the period won't count towards student loan forgiveness under IDR plans or Public service loan forgiveness this effectively pauses the clock for many borrowers who are pursuing debt relief right so yeah while you have no payments the clock has been paused and it says after the Supreme Court refused to modify a reverse injunction last month the case is back with the ace circuit which will now consider at least some of the underlying legal arguments of the Republican Le challenge not just whether to temporarily halt the program while the lawsuit proceeds the court issued a briefing schedule last week and set a hearing date for October 24th the court will issue a decision sometime after that so we'll see what that decision is at that point um but in terms of saying this won't be fully resolved until 2025 it's because whatever the ruling is now they are correct about this it will likely get appealed again to the Supreme Court and if the Supreme Court moves quickly it could release a final decision in the summer of 2025 likely June at the earliest the earliest that's assuming borrowers remain in the save plan forbearance until then that can mean up to around a year of no payments no interest and no student loan forgiveness credit and that's if both the eth circuit and the Supreme Court move quickly enough to issue a final ruling by then it could take even longer however so it could take even longer right you're saying a year basically at the earliest because of wanting to go to the Supreme Court now here is what I had been saying the Nationwide injunction issued by the a circuit halts all student loan forgiveness under the save plan but the Biden Administration argues that the injunction goes far beyond that this is where we get to that point of my analysis that I had stated that no one else had talked about at the time the a circuit suggested in its August order that it's not just student loan forgiveness under the save plan that's blocked for now it's student loan forgiveness for any borrower enrolled in the save plan potentially including loan forgiveness under other programs that are not being challenged such as pslf so y'all let me read this again for y'all in pslf it's student loan forgiveness for any borrower enrolled in the save plan so if you were enrolled in the save plan okay you're included in this potentially including loan forgiveness under other programs that are not being challenged such as pslf the Biden Administration asked the court to clarify its position but the court declined and the Supreme Court opted not to intervene at this juncture in addition the AP circuit suggested that student loan forgiveness under other IDR plans derived from the same statutory Authority including the icr paye and repaye plans may also be in Jeopardy now mind you repaye is already Sunset that's gone icr and PE are the only really other ones remaining at this point um um and with that and I think ibr I don't think anybody can get under ibr with a B anymore either because that that was another one too um as far as I'm aware but not everyone is eligible for this right for either one of these that's number one um so that that's a problem and of itself it says the outcome of the upcoming legal briefing and oral arguments will determine the scope of the block on student loan forgiveness but in the meantime millions of borrowers will not know where they stand on loan forgiveness for quite some time even if they are seeking relief under other programs that are not directly being challenged through the safe plan litigation and this is I know it's going to upset a lot of people that they're saying well if you are enrolled in the save plan and you are going towards pslf you are included in this lawsuit and they may take away your pslf that's what they're saying that is what they are saying and I don't think this is false alarm Bells because you have to understand how this stuff works a lot of this is built on the same statutory Authority right so if they say well we don't believe that Congress ever intended that this could all be knocked down we don't believe that this forgiveness should happen because once one part is challenged it's like well what about this other program this looks just the same with a different name or with a different requirement it doesn't matter what they promis it doesn't matter if you agree or disagree or you say hey well a person should have this because of whatever reason every single thing is being challenged right now like I said they didn't mention borrow defense in this but I feel like borrow defense is being challenged also or at risk because the part that they were trying to quote unquote create where if you went to an institution and that institution um did not basically when you graduated you didn't get earnings that were essentially worth what you paid at that point right that's basically borrow defense where you felt like you were scammed right or you were misled you were promised hey you're going to have certain earnings after this and this is you know what it could lead to and now you know you're stuck in a $100,000 debt making $10 an hour due to no fault of your own that's borrow defense so I think all of this is at stake personally and now they're just starting to catch on because they were not reporting this before it up so yeah and funny that's actually just what was getting to um it says separately a different federal court blocked yet another student loan forgiveness initiative last week the Biden Administration Was preparing to launch a new program this fall that would have provided debt relief to 30 million borrowers who first entered rep payment 20 or 25 years years ago experienced runaway interest acral or attended low value schools but before the rules had even been finalized Republican L States including many of the same states that sued the administration to block the save plan launched a preemptive lawsuit arguing that the education department Was preparing to implement loan forgiveness before the final regulations were even published last week a Georgia federal court blocked that program and ordered the administration to not Implement any debt relief even though the new program technically does not even exist yet this is a temporary order and the court will consider whether to modify or maintain the order after a considers further legal arguments briefing is due to be completed this week but whatever final decision the Georgia Court makes will most certainly be appealed as well ensuring the student loan forgiveness under Biden's new plan or program will similarly be stuck in limbo possibly for a year or longer now it says they're talking about how upcoming elections could change the timelines for the safe plan and student loan forgiveness outcomes so it says while the courts will move at their own pays there is one wild card in the timeline for the legal challenges over the save plan and student loan forgiveness the upcoming elections in November whether former president Donald Trump or vice president kamla Harris wins the presidency could determine the fate of these programs Trump has expressed hostility towards Biden's student debt relief efforts and could take steps to undermine or overturn these new programs meanwhile Harris who as the California attorney general took steps to protect student Lars def Fred by their schools has promised to continue implementing debt relief the makeup of Congress following the elections will also be critical one party control of the White House Senate and House of Representatives could lead to sweeping changes one way or another ranging from the complete elimination of loan forgiveness under IDR and pslf as suggested by project 2025 to the codification and statute of the current Biden programs which would likely insulate them from pending challenges divided government could yield compromise or continued gridlock so here's the deal basically with these courts what they're deciding is whether these programs not are good or bad but legal in terms of the authority that's been given to whoever is implementing them and the language that they're using and if they're able to actually do it okay that is really the main thing here so essentially Congress needs to do their job Congress needs to do their job period divided congress not divided Congress I don't care guess what honey we're not in Congress that's not it's not our job to figure it out we're the customers we're the clients we are the constituents here it's not our job to figure out how they get it done but they need to get it done because if they don't get it done it's the continuation as they have been for decades with all of us car it on the stick I'm going to be honest about these politicians they don't actually want to solve problems because if they solve a problem they don't have a platform to run on they like problems because that's why you elect them they say there's a problem elect me to fix it they don't say elect me because everything's great even the incumbents say well there's this other problem or this this other side is doing that elect me to fix it they all do this but I think that everybody deserves to know the truth the truth is is that every single plan related to income driven repayment pslf borrower defense all of that is right now at risk so this time next year we don't know if there will be any IDR plans in existence anymore we don't know if pslf will still exist anymore we don't know if bber defense will still exist anymore heck maybe we won't even know next year maybe it'll be the year after next because there's no telling how long this will go on so what Congress needs to do is essentially cify what what is going on I mean you want to be able to have an opportunity for these plans to be able to change right as necessary and develop and whatnot but these things need to be set in stone that these plans exist for people and also the powers very clear make it clear what the who what the Department of Education has the power to do but then you have to be careful with that too because then what if you get another Betsy DeVos you give them so much power that they can shut it all down just like she wanted to do so where's the balance how to y it make sure borrowers are safe how they do it is not our problem they just need to get it done let me know your thoughts on this one guys and I'll speak to you on the next one [Music]