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EOTM: Massive (Good) Student Loan News in the Senate!
Published 16 days ago • 3 min read
Eyes on the Money Newsletter
Helping ODs master their money, career, and practice one email at a time
Big News in Congress for Current Student Loan Borrowers
Good news for optometrists with student loans! A recent development in Congress may protect your current repayment options from (proposed) chopping block.
For a while now, we've all been watching two sources of uncertainty looming over student loan borrowers:
Ongoing court cases for the SAVE plan
Current proposed legislation making its way through Congress
The proposed legislation - part of Trump's comprehensive tax bill often called "The One Big, Beautiful Bill" - tackles a wide range of topics.
From a financial planning perspective, extending tax rules that are set to expire this year is an important part of it.
Both versions out of the House and the Senate included big changes to student loan repayment options that impacted both future and current optometrists - and not in a good way.
Specifically, for current borrowers, it would:
Eliminate PAYE, New IBR, and SAVE, and
force you into either a version of the Old IBR plan or the newly created Repayment Assistance Plan (RAP). See this newsletter for details on this.
For future borrowers taking loans after June 2026, the only options would be a Standard Repayment plan or the RAP plan.
This leaves current borrowers with worse options, and frustratingly ignores the terms you agreed to with the government when you signed your loan agreements.
We'd like for both our government and private lenders to hold to loan terms we agree to in contracts signed. Imagine a mortgage lender increasing the interest rate on a fixed rate mortgage a few years in!
Plot Twist in the Senate!
So, with the outlook not looking too promising, there was a plot twist in the Senate that gives us some hope for current borrowers!
While the Senate was preparing to vote on their version of the bill, the Senate Parliamentarian - a sort of "referee" to the Senate for lawmaking rules - put a roadblock for these provisions in the bill.
Specifically, she advised that these provisions would require a 60-vote supermajority in the Senate to pass, rather than the easier simple majority.
This would make it much harder - some argue entirely unlikely - for the current Republican majority to pass the bill as it is.
As Dikembe Mutombo used to say on the courts...
"No no no...Not in my house!"
Of course, the Senate can ignore this and move forward, but it seems unlikely. If that's the case, we are much more likely to see current borrowers grandfathered into your current repayment plans!
Anything is possible, but this is a positive development for graduated ODs with current student loan balances.
There are still the ongoing SAVE court cases - it's very likely this will lead to the end of SAVE, and it's possible that they impact PAYE as well.
But for now, we'll go into the weekend on a happy notes and keep a close eye on this law as the Senate likely works to rewrite their version to keep its other legislative priorities (like taxes) intact.
If you have any questions on this, or want to review your own student loan game plan and how it fits in with the rest of your financial life, reply to this email or feel free to click here and schedule a time to chat.
I've been considering doing more regular (weekly or bi-weekly) live streams to educate on different topics and answer questions in real time. It's likely student loans will be among the first topics to tackle. If this is something that'd be helpful to you - please let me know.
Have a great weekend!
Evon Mendrin CFP®, CSLP®
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