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☕ DrinkCoffeeAndProfit
Smart money moves before breakfast
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· · · Partner Message · · ·
Of Elon Musk’s latest genius invention.
It’s an AI agent…
Perhaps the most powerful ever created.
Elon himself believes it could 70x your money… in a short period of time.
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Inspiration Quote for the Day
“In any moment of decision, the best thing you can do is the right thing. The worst thing you can do is nothing.”
— Theodore Roosevelt
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The Morning Ritual
The 90-Day Student Loan Clock Most Families Will Ignore
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My brother called me Saturday morning. Not panicked. Confused. He had just opened an email from his student loan servicer. The subject line was something generic about “repayment plan changes.” He almost deleted it. The email said he has `90` days to choose a new repayment plan. If he does nothing, the government picks for him. The most expensive option.
He is not alone. `7.2` million people got the same email this week. Most of them will do exactly what my brother almost did: close it and forget.
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In One Sip
► `7.2` million borrowers enrolled in the now-defunct SAVE plan are receiving 90-day notices starting this week. If they do nothing, they get auto-enrolled into the Standard or Tiered Standard Plan, which calculates payments based on balance, not income.
► For a single borrower earning `$50,000` with `$40,000` in loans, that could mean payments jumping from `$110`/month to as high as `$460`/month. That is `$4,200` more per year.
► A new `1%` interest rate reduction is available for borrowers who enroll in auto-pay before September 30, 2026. It costs nothing. It takes three minutes. Most will not claim it.
► Parent PLUS loans are now capped at `$20,000`/year and `$65,000` total per student, effective July 1. Parents already holding PLUS loans must consolidate before July 2028 to keep income-driven repayment access.
► The new Repayment Assistance Plan (RAP) launched July 1. It is income-based, reduces payments by `$50`/month per dependent, and shields borrowers from runaway interest. But you have to choose it. Nobody gets it by default.
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Why It Matters for Your Money
The problem is not the new plans. The problem is that doing nothing is the default. And doing nothing is the most expensive option.
If you are enrolled in SAVE and ignore the notice, your servicer will automatically place you into the Standard Repayment Plan or the new Tiered Standard Plan. Both calculate fixed monthly payments based on your total balance, not your income. For someone with `$40,000` in loans, Standard means roughly `$460` a month for `10` years. The income-driven RAP plan would base payments on what you actually earn, potentially cutting that to `$210` or less.
That is a `$3,000` annual difference. For doing nothing.
And here is the part nobody mentions. The Education Department just announced a `1%` auto-pay interest rate reduction for any borrower who enrolls before September 30, 2026. The old auto-pay discount was `0.25%`. This one is a full `1%`. On a `$40,000` balance, that saves roughly `$400` a year in interest. Free money. Three minutes to set up. And it expires June 2028.
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The Wealth Angle
Parent PLUS borrowers have it worse. Starting July 1, new Parent PLUS loans are capped at `$20,000`/year and `$65,000` total. But the bigger issue is the loans already on the books.
Right now, the only income-driven plan available to Parent PLUS borrowers is Income-Contingent Repayment (ICR). ICR is being eliminated by July 2028. If you hold Parent PLUS loans and want to keep any income-driven option, you need to consolidate and enroll in IBR or RAP before that deadline.
The quiet risk: a `58`-year-old parent carrying `$80,000` in PLUS loans who misses the consolidation window could end up on a fixed plan that demands `$900`/month through retirement. That is not a student loan problem. That is a retirement problem.
And roughly `3.7` million parents hold federal PLUS loans right now. Many of them do not realize the income-driven escape hatch is closing.
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☕ Key Insight:
Ignoring the email costs more than making the wrong choice. Every available plan is cheaper than the one the government picks for you when you do nothing. Open the email. Log into StudentAid.gov. Choose a plan before the `90` days run out.
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Coffee Break Move
If you or anyone in your family has federal student loans, do three things this week.
First, check the plan. Log into StudentAid.gov and see whether you are on SAVE. If you are, the clock is already running. Use the Loan Simulator to compare RAP, IBR, and Standard side by side. Pick the one with the lowest monthly payment you can manage.
Second, enroll in auto-pay. The `1%` rate cut is available right now through September 30. It takes three minutes and saves hundreds per year. If you are already on auto-pay, you do not need to do anything. The reduction happens automatically.
Third, if you are a parent with PLUS loans, call your servicer this week and ask about consolidation. The income-driven window closes July 2028. Once it shuts, it is gone.
My brother made his choice in `12` minutes on a Saturday morning. RAP, auto-pay, done. He said it felt like finding a bill in a jacket pocket he forgot about. Except this one was going to cost him `$3,000` a year if he never checked. Finish your coffee. Open the email.
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