The Senate's Megabill: A Disturbance in the Student Loan Force

A Senate Bill Awakens... My Displeasure

The Senate has passed a spending megabill a move that frankly I find disturbing. The House now aims to pass it before your… Earth holiday July 4th. But whether those Republicans can secure the votes remains to be seen. It seems the ability to pass legislation is insignificant next to the power of the Force… or in this case political maneuvering. This bill attempts to reduce federal spending and increase tax revenue. Ambitious but let's see if they can avoid the fate of the Jedi Order.

Loan Changes: Execute Order 66... Repayment Plans

This bill if passed will bring significant changes to federal student loans. These changes may not affect those already in repayment but they will impact future borrowers and those awaiting action on the Saving on a Valuable Education (SAVE) income driven repayment plan. Only two repayment options will be available for those with loans dispersed on or after July 1 2026 and those currently enrolled in the SAVE plan—a standard repayment plan and a new income driven plan known as the Repayment Assistance Plan (RAP). It is as if millions of voices suddenly cried out in terror and were suddenly silenced... by debt!

The SAVE Plan: A Trap! (Maybe)

The SAVE plan currently in administrative limbo due to federal court intervention might force borrowers to choose another plan anyway. From July 2026 to July 2028 borrowers will have to choose a new plan. After July 1 2028 they'll be automatically moved into the income based repayment plan. The Force is not strong with this one. It is clear this plan has been set up to fail as if it were a Rebel base on Hoth.

Standard Repayment: The Dark Side's Efficiency

The new standard plan will give borrowers fixed monthly payments to pay off their loans in 10 to 25 years depending on the loan size. The current standard plan has a 10 year term regardless of the amount borrowed. Efficiency is paramount. Just as I prefer the efficiency of the Death Star over the bumbling incompetence of the Republic fleet.

RAP: A Smaller More... Disappointing Hope

The Repayment Assistance Plan will calculate monthly payments between 1% and 10% of a borrower's discretionary income down from the current 10% 15% or 20%. However some analyses suggest monthly payments could spike by hundreds of dollars compared to the SAVE plan. A smaller hope indeed. Like trying to blow up the Death Star with a T 16 Skyhopper.

Embrace the Dark Side... of Home Ownership?

They offer advice on buying a house from CNBC? Perhaps they will teach you to rule the galaxy with real estate. It is as Luke once told me: "There is good in you Father.” There is good in buying a home as well. This is the way.