For the last two months, I've had the exact same student loan balance - $20K in my Aidvantage account.
I'm one of millions of student loan borrowers awaiting a decision on the legality of President Biden's student loan forgiveness program. The legal battle begins this week when the Supreme Court prepares to hear arguments on the fate of the program.
I'm not feeling as hopeful as I was in last August, and that hasn't changed now that we are well into 2023. What has changed is my approach to my current balance. In my last article, here was my Q1 2023 plan:
January - March 2023: Aggressively save approximately half of the $20K balance. If the Supreme Court shoots down the forgiveness plan (or a decision is still pending after March 31), use the savings accumulated during Q1 2023, along with other savings, to completely pay off the balance.
At the end of 2022, the above seemed like a sound plan. However, I've seen how the recession has impacted my tech-centric city of Seattle as well as the global logistics industry, which I've worked in for over 15 years. In an uncertain business environment, a good friend advised it's not wise to be cash poor. So, my aggressive plan to use a good portion of savings to pay off my student loan balance may not be wise, especially since no interest is accumulating on my balance. And the funds I continue to save can accrue interest in a high-yield savings account.
Even though I'm eager to pay off my balance, I need to make sure my financial decisions are not rooted in anxiety and fear. I was so adamant that I would not carry this debt beyond March, but that was largely based on my disappointment that I didn't achieve my debt free goal at the end of 2022.
I have to remind myself time and time again, that it's ok to pivot, then plan accordingly. I hope this is a timely reminder for you, too!