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Christie_1Parent Plus Loans:  Those with Parent Plus loans which have not been consolidated into a Direct Consolidation loan will no longer qualify for income driven repayment or Public Service Loan Forgiveness (PSLF).

If you missed the July 1, 2026 deadline, this leaves access to three legacy repayment plans:  Standard (10 years), Graduated (10 Years), or Extended (25 years).  Graduated payments start lower, and increase every two years.  Extended payments are available for anyone with $30,000 or more in federal student debt – can be either fixed or graduated – but will result in more total interest.  Our advice over the years for anyone choosing Extended Payments is it is a good plan to keep your monthly nut low, but try to pay it down with bonuses and extra funds to keep the interest under control.

Anyone who previously consolidated before July 1, is eligible for Income Contingent Repayment (ICR), and may have the option to switch to Income Based Repayment for a lower payment.  Switching as early as possible is best for a lower payment.  ICR is scheduled to be eliminated on July 1, 2028, at which time anyone remaining on ICR will have the option to switch to IBR.

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Christie_1RAP: The new Repayment Assistance Plan (RAP) began on July 1, 2026, but information about it remains elusive.  Check the online government portal at studentaid.gov for updates.  Remember, while RAP is a 30 year plan for forgiveness, it does offer an elusive interest subsidy that the older Income Driven Plans do not.  Any accrued credits toward an IDR will transfer to RAP.  Also, only on time payments count toward forgiveness.

RAP is not available for those with Parent Plus loans or any Consolidation loan which includes a Parent Plus loan.  Therefore, the interest subsidy provided by RAP does not apply to any Parent Plus loans.

Tiered Standard Repayment Plan:  This plan is no longer based upon a 10 year term for everyone.  It is now based upon the principal of the loans:

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Christie_1To encourage repayment, the Department of Education has announced that it is offering 1% autopay discounts provided the borrower signs up by September 30.

Remember, the payment will be made automatically even if wrong.

Setting up another account and transferring funds to it to cover the auto-payment may be wise as errors are being reported.

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Christie_1We are now past the July 1, 2026 date where the Working Families Tax Cuts Act takes effect which means a lot has changed for the federal student loan repayment system.

The notices are the result of the Department of Education (“ED”) ending the SAVE plan, a Biden-era income driven repayment program that has been bogged down in lawsuits over the past several years.  Borrowers who have remained on a SAVE forbearance where no payment was due will be in for quite a shock when new payment notices are issued.

There are still around six million borrowers on a SAVE forbearance.  Most servicers started sending out 90 day notice letters starting July 1 – but Nelnet is reporting that it will not be able to send these notice letters until March 2027.  If that is your client, there is the possibility that some people will be able to stay in a SAVE forbearance until the summer of 2027.

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arkovich_law-narrowFirst and foremost, if you pay your taxes using a credit card, most credit card companies have coded this into their system so that following a bankruptcy, you would likely receive a bill for the non-dischargeable IRS debt.  So don’t pay with a credit card.

When can taxes be discharged in a bankruptcy?

There are a few rules that apply to allow taxes to be discharged.

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arkovich_law-narrowI noticed today that the interest rates just hit 7% again.  They briefly touched 6% a couple weeks ago.  For anyone who has locked in a rate closer to that 6%, you might want to take advantage of that now.  Word has it that the Fed may actually increase rates once this year, and leave them unchanged the remainder of the time.  Anyone on the fence waiting for a rate reduction may as well give that up and go ahead with their plans if this outlook prevails.  Or give up on purchasing a home right now and see what next year brings.  There are forces pulling all kinds of directions now as to what the future holds.

Anyone who has bought in the past couple years is likely under water.  While Florida still has an overall increase in population, property sales and corresponding values have dropped over the past couple years.  This means that short sales may come back — if someone needs to move now, but their property is underwater, it’s best to try for a negotiated short sale where any deficiency is waived.  This has to be specifically negotiated; it doesn’t happen automatically.  No one wants to be sued for the balance owed years later after you’ve given up the home.  You also don’t want that reporting negatively on your credit.

We work with local realtors to try to get that deficiency waived, buy time to complete the sale etc.  Reach out if you are facing this kind of situation and see what options may exist for you.

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Christie_1While the payment count was removed from the studentaid.gov site, there is a back door you can use to see how many years you have left on an IDR until your student loans are forgiven — if you call your servicer, who knows what answer you’ll get.  If you use this hack, make sure to take a screen shot in case you’ll need later for some reason.  You never know.

Step 1) Log in to studentaid.gov

Step 2) Open another browser tab and go to https://studentaid.gov/app/api/nslds/payment-counter/summary

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