Borrowers could face a double whammy this summer if the Supreme Court rules against the debt-forgiveness plan, as the court's decision is likely to land just before the pause on debt repayment lifts in September. The court is scheduled to release its next decisions on Thursday morning. In the worst case scenario, borrowers will face restarting their loan payments in September without any debt relief, experts note.
The dispute has placed student borrowers in a bind and raises questions about how they should prepare for both the Supreme Court's ruling as well as theBorrowers"need to protect themselves and be prepared for whatever may come," said Michele Shepard, senior director of college affordability at The Institute for College Access & Success, an advocacy group for affordable higher education.
For instance, an income-driven repayment plan, or IDR, can be helpful because they peg borrowers' payments to their monthly income. About one-third of all borrowers are enrolled in an IDR, according to Pew Research. at the Federal Student Aid site to figure out which plan is best for them. "The only real downside is because your monthly payments are lower, you could pay more over the life of the loan because your interest will be accruing," she noted. Lastly, experts say to be ready to act if the Supreme Court rules in favor of debt forgiveness, as at least some Wall Street analysts speculate it might.
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