In the Black: May 2024

Please Forgive Me: Student Loan Edition

How to get in on the action

Most people can get their student loan payment reduced, through the SAVE plan – which cuts undergraduate loan payments in half or to zero, ensures balances don't grow from unpaid interest, and cancels debt for low-balance borrowers more quickly.

  • The SAVE Plan is an Income Driven Repayment (IDR) plan, so it bases your monthly payment on your income and family size.

  • The SAVE Plan lowers payments for almost all people compared to other IDR plans because your payments are based on a smaller portion of your adjusted gross income (AGI).

  • The SAVE Plan can also help with interest: If you make your full monthly payment, but it is not enough to cover the accrued monthly interest, the government covers the rest of the interest that accrued that month.

  • Beginning in February 2024, the SAVE Plan will give borrowers who originally borrowed $12,000 or less forgiveness after as few as 10 years.

  • More elements of SAVE will go into effect in summer 2024 and will lower payments even more for borrowers with undergraduate loans.

Now on FORGIVENESS. You’ve likely heard talk in the news about student loan forgiveness. So how does it really work and who’s it for? I’ve attached specifics below but you’ll likely qualify IF you work for the government or not-for-profit organization, through the PSLF Program.

  • The PSLF Program forgives the remaining balance on your Direct Loans
    after you’ve made the equivalent of 120 qualifying monthly payments under an accepted repayment plan, and

  • While working full-time for an eligible employer.

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WHO?: Teachers, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher​

WHO?: Government employees, folks who work for nonprofits, doctors/nurses/ medical professionals, folks who’ve been repaying for 20/25 years https://studentaid.gov/pslf/
​WHO?: Folks who went to schools that closed https://studentaid.gov/manage-loans/forgiveness-cancellation/closed-school or misled them https://studentaid.gov/borrower-defense/
​WHO?: Folks with disabilities, https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge
​HOW?: Apply https://studentaid.gov/pslf/ https://studentaid.gov/manage-loans/forgiveness-cancellation​
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Taxes and Student Loans

A great number of folks had their student loan on pause for the last few years, and now payments have resumed. To that end, here’s some reminders about how taxes and these payments are interrelated:

Graduated repayments and filing separately: If you are on graduated repayments and you are married and filing jointly, your payments will be based on household income. Even though it usually saves money on taxes to file together, you may want to consider filing separately to bring those payments down.

Max student loan interest deduction : We can write off up to $2500 in student loans interest each year. You CAN’T write off the principal payments.

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The New FASFA and Self Employed Parents: how to answer the Businessvaluation question

If you have a child applying for college (or currently enrolled in college) this year then you have likely already encountered the new FASFA form. For parents who are self employed, you may have been puzzled by the question regarding your small business valuation. I was also puzzled!!!! Here’s some guidance on this from the feds:

  • If you own/control less than 50% and or have more than 100 Full Time employees, the value of the business should include the market value of land, buildings, machinery, equipment, inventory, etc. Please reach out to us if this applies to you, and you need help with this calculation.

  • If you or your family own/control more than 50% and the business has less than 100 full time employees - you don’t need to enter anything (that’s most folks!).

PURE TRANS JOY

Speaking of college, our middle daughter is graduating this year and about to head off to an engineering program in the Midwest and I couldn't be more proud. In case you don’t remember, high school is a real sh*tshow… Add to that a global pandemic and coming out as trans – it’s a lot. And here she is on the other side: beautiful, radiant, and headed off to pursue her dreams.

Elizabeth Hanley