Supreme Court cancels student loan waiver. Here’s what borrowers should do now.

Millions of student loan borrowers faced some unpleasant news Friday morning when the Supreme Court announced that they Hitting President Biden’s planned student loan forgiveness program. The decision, ruled by a 6-3 majority of the court, would have cut off relief for nearly 40 million borrowers who could have had as much as $20,000 of their existing debt forgiven.

Specifically, the court ruled that Education Secretary Miguel Cardona does not have the authority to erase existing federal student loan debt under a law known as the HEROES Act.

“We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial aid programs under the Education Act, not to rewrite that law from the ground up,” wrote Chief Justice John Roberts. wrote

More than 26 million borrowers reported to apply About 16 million were approved for the amnesty program before applications were paused in light of legal challenges against the Department of Education.

While forgiveness will wipe out a significant portion of borrowers’ debt — and in some cases leave them with nothing left to pay — there are still options for student loan debt, though not as favorable as full forgiveness.

For example, borrowers with private student loans can still explore their refinancing options, which could potentially lower their interest rates and put more money back in their pockets. Check out private student loan refinancing options here now to see if it can help you.

What should borrowers do now?

It is important to understand that there are two types of student loans: Federal, which is provided by the government, and private, which is provided by private student loan lenders. The former was the kind that would likely be pardoned by the Biden administration but now likely won’t follow the Supreme Court’s ruling. Private student loans, meanwhile, Was not in the race for forgiveness And likely never will.

Private student loan borrowers, however, should strongly consider their refinancing options, especially now that their federal loan debt is permanently dwindling. In this climate, it makes sense to take steps to cut costs as much as possible. By refinancing private student loans, borrowers can secure lower interest rates and pay less interest on their remaining debt. But a lower interest rate isn’t the only benefit of refinancing your personal student loans. Here are two more reasons why it’s worth doing:

You can change the payment terms. If you’re unhappy with your current repayment schedule or want to rework it into something more manageable, a student loan refinance can help. If you have multiple personal student loans on different payment schedules, for example, you can refinance them into a single loan to pay off over a better time frame. Or you can refinance and extend the schedule to lower your monthly payments knowing that you are now expected to pay off the federal loan as well.

You can switch to a different lender. If your experience with your current student loan lender hasn’t been good — or you think you could improve it — consider refinancing your private student loan with a different institution. Other lenders will be interested in your business and may offer you better rates, terms and benefits (such as possible deferments) if you refinance your existing loan with them instead.

Learn more about refinancing your personal student loans here now.

Consider private student loans

While private student loans don’t come with some of the benefits of federal student loans, they do have benefits that can appeal to borrowers, especially now that they know what their repayment future will look like. There are two reasons here Why a private student loan might be worth it to you:

Higher loan limits. College and graduate education can be expensive. And the federal loan may not cover all or even most of the costs. Fortunately, private student loans have higher borrowing limits, allowing borrowers to bridge the gap between what they’re federally approved for and what they still need to finance for the balance of their education.

Fast approval. Although every private student loan provider is different, all private student loans are approved more quickly than their federal counterparts. Fill in those FAFSA for Federal Aid Expect to wait a few weeks for official approval. Private student loan applicants, however, can often be approved within a day or two (again, depending on the lender in question). This can be especially helpful for those who wait until the fall semester to receive their student loan financing.

Learn more about private student loan benefits here now.

Bottom line

While the Supreme Court’s decision may not be good news for many borrowers, there are ways to reduce costs and speed up repayment terms. By refinancing private student loans, for example, borrowers can potentially secure lower interest rates. They may be able to change the overall repayment terms and possibly switch to a lender that is better for them. That said, it makes sense to thoroughly explore private student loan options now following the forgiveness news. In some cases private student loans can help students bridge the gap with inadequate federal student loan support – and they can usually get approved much faster than going the federal route.

Learn more about your personal student loan options here now.