Student loan court ruling is a ‘one-two punch’ for clients

investmentnews.com:

A Supreme Court ruling Friday adds urgency to budgeting and financial planning decisions for clients who owe money on student loans, investment advisors said after the court released its decision.

The high court struck down a Biden administration plan that would have provided up to $20,000 in loan forgiveness for borrowers who make less than $125,000. The court held, 6-3, that the Education Department exceeded its authority with the program.

The decision coincides with the lifting in October of afreeze on student loan payments that has largely been in place since the advent of the coronavirus in March 2020. The confluence of events poses a financial challenge for borrowers and the advisors who are helping them.

“People are going to have to figure out where in their budget these payments are going to come from,” said Ryan Frailich, founder of Deliberate Finances. “It’s going to be very difficult for some people and very easy for others.”

Some clients may have seen an increase in their compensation over the last few years or taken advantage of the loan payment delay to retire other debts and meet other financial obligations. But others may have lost their jobs, experienced a decrease in income or taken on new caregiving responsibilities.

“It’s a one-two punch,” Ethan Miller, owner of Planning for Progress, said of the resumption of loan payments later this year and the Supreme Court decision Friday. “It’s a load of bricks on millions of borrowers who were counting on this relief. It’s going to be really, really tough for a lot of people.”

Brittany Brinckerhoff, a financial advisor at Hilltop Wealth Advisors, had been expecting the Supreme Court to kill the Biden administration’s loan-relief program. As she and her clients