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I have been amazed at the frequency at which I am running into physicians who have decided not to pay any more toward their student loans than they have to because of some ideas floated by candidates for president including Senators Elizabeth Warren and Bernie Sanders. Here are a few examples:
From Twitter:
From the WCI Forum:
From the WCI Facebook Group:
I usually try to avoid wading into politics on this blog, but this really needs to be addressed because at the rate this idea is mushrooming, it is going to cost thousands of doctors thousands of dollars in interest. That sum total is certainly worth my time to write this post and your time to read it and point your colleagues to it.
How a Bill Becomes a Law
Let's start with some basics that I would have hoped most of you would have learned in elementary school.
For those of you unfamiliar with the song, we have three branches in our federal government.
Legislative Branch
This is composed of a House of Representatives and a Senate. The House generally operates on a “majority rule” philosophy where the majority party pushes its way around like a bully and passes whatever bill it wants to. But a bill must also pass the Senate before becoming law, where more compromise is the norm. Thanks to a “filibuster” provision designed in some ways to protect minorities (not talking about race here) from being run over roughshod by the majority, a bill really needs much more overwhelming support in order to pass. Generally 60% of Senators must support its passage, meaning it must have support from individuals in both major parties.
Executive Branch
This branch is charged with enforcing the laws. Its power, however, has grown over the decades under the control of both parties and now it can influence a lot of things simply by setting enforcement policy. However, there are limits to this influence.
Judicial Branch
Judicial Branch is charged with determining whether the laws passed by the legislative branch are constitutional and striking down those which are not.
At any rate, my point with this simple discussion of civics is that the president, by himself or herself, cannot pass laws. In fact, the usual case is that at least one part of Congress is controlled by the opposite party as the one controlling the White House. So the only laws that ever pass are compromises that people in both parties can agree to. Only on rare occasions are both houses of Congress and the White House controlled by the same party. When that happens, pretty dramatic things can happen (for better or for worse), such as the Patient Protection and Affordable Care Act (Obamacare) or the Tax Cuts and Jobs Act (Trump Corporate Income Tax Cut).
Don't Expect Big Changes
For those not paying attention right now, the Senate and the White House are controlled by the Republicans and the House is controlled by the Democrats. So don't expect any big changes. However, this is an election year. Come next January, control of any of those three things could potentially change. However, most political observers doubt there will be any change in who controls the House or the Senate. In fact, it is also more likely than not that our president in 2021 will still be President Trump, despite current impeachment proceedings. So the most likely thing is that the status quo will continue. Which means that most of the laws we have right now will still be the law for at least several more years.
The conclusions any rational person will make from this discussion about student loan forgiveness are as follows:
- Trump is probably going to win the election, the House is probably going to be controlled by Democrats, and the Senate is probably going to be controlled by Republicans. Since the Republicans generally aren't very supportive of widespread student loan forgiveness, it is unlikely that a law that enacts it is going to be put in place at any time between now and 2023.
- If a Democrat wins the presidency, it may not be one who is supportive of widespread student loan forgiveness. Only two of the leading candidates are in favor.
- Even if Senator Warren or Senator Sanders wins the presidency, they will still be faced with the prospect of getting a bill through a Republican Senate.
- Even if the Democrats somehow both win the presidency and flip the Senate, they are extremely unlikely to have a filibuster-proof majority in the Senate.
If I have not yet convinced you that getting a widespread student loan forgiveness bill through Congress prior to 2023 is little more than a hope and a prayer from some very desperate borrowers, I'm not sure what else I can say. But I'll keep talking anyway, mostly to address those few of you who think I don't know what I'm talking about above and need more evidence that there is no white knight riding in to save you from your student loans.
Make Plans Using Current Law
As a general rule, it is a good idea to do your financial planning using current law. There are two reasons for this:
- The first is that laws don't change very often. They often last years or even generations without change.
- The second is that when change comes, it can go either way. Consider a backdoor Roth IRA. Maybe Congress outlaws it. Maybe Congress allows high earners to simply contribute directly thus eliminating the need for it. It could go either way. A couple of years ago a lot of people thought that both tax rates and interest rates had to go up. Then they went down. Same with student loan forgiveness. Maybe it gets easier to get your student loans forgiven. Maybe it gets harder.
But the point is to make your plan based on current laws and adjust your plan as laws change. Try to get yourself into a financial position that your student loans are not the biggest part of your financial life and then you won't care nearly as much.
Lots of People Don't Like Student Loan Forgiveness
Most medical students, residents, and young attending physicians spend their days surrounded by people that think student loan forgiveness would be the cat's meow. They might be surprised to find out there are lots of people who think widespread student loan forgiveness is a terrible idea, including people who are likely to vote Democrat in the election. Here's one:
This father (and there are lots of people like him) thinks student loan forgiveness is unfair. It rewards those who borrowed lots of money, went to more expensive schools than they could afford, perhaps didn't work very hard, and perhaps didn't pay back their loans as they should have. It also rewards those who received an education they are already presumably being rewarded for in the marketplace.
However, beyond the people who think it is unfair, there is another, perhaps even larger, group of people who just think it is bad policy. They argue that the student loan crisis is caused by student loans. The ability of anyone to get a student loan no matter what they are studying, how they are doing in school, or how likely they are to pay it back has allowed schools to charge higher and higher tuition that they would not have otherwise been able to charge. The general rule with government is to tax what you want to see less of and subsidize what you want to see more of. We subsidized tuition and student loans so we shouldn't be surprised to see more tuition and student loans.
But my point is that there is significant, widespread opposition to the expansion of student loan forgiveness and perhaps even the maintenance of the current IDR and PSLF forgiveness programs. Here's Dave Ramsey's take on Senator Warren and her student loan debt relief proposal in particular:
As you can see, there will be significant political pushback from those who paid for their loans in the event of serious discussion of widespread student loan forgiveness.
[Update after publication: I know those of you who like the concept of student loan forgiveness won't like this section of the post. I don't include this section of the post nor these videos to try to convince you that student loan forgiveness is a bad idea. I'm including them to show you that there are lots of people who disagree with you, making it very difficult for these laws to pass. Don't send me hatemail wanting some sort of balanced political discussion of the merits of student loan forgiveness. That's not what this post is. This post is a very practical argument that student loan forgiveness does not currently exist nor is it likely to exist any time soon and therefore you should include it in your financial plan. That's it. Don't read more into it than that.]
Sander's and Warren's Loan Forgiveness Programs Aren't For YOU
Okay, let's keep going. Even if you are a diehard believer in Democratic presidential candidates and widespread student loan forgiveness as a fantastic public policy, you need to realize that as a doctor or other high-income professional, they are not talking about you. Consider Senator Warren's proposed policy. Here is a good summary:
Did you catch all that? $50K TOTAL of forgiveness. That isn't going to move the needle for most docs who are interested in 3-10+ times that amount of debt being forgiven. And only those who earn under $100K are even going to get that. In fact, if you have an average single physician income ($275K), you aren't going to have anything forgiven.
Senator Sanders has put out a proposal to forgive student loans for everyone which has gotten lots of indebted docs really excited. But how likely is that to pass when the second most likely senator to support the proposal thinks it should be limited to $50K for those who make <$100K? He also wants to make college completely free. If you thought there was opposition to forgiveness, you haven't seen anything yet. I'm confident the education industry has a very strong lobby.
I'll give you a tip. When people are feeling bad about people with large student loans, they aren't thinking about doctors. Nobody cares that most doctors in their early 30s have a negative net worth. They see that you are making $150-500K+ and don't see any need to give you a “handout.” When you tell people you are a doctor they think you are rich, whether you are or not. Nobody is ever going to feel bad for you and your financial problems. Get used to it. It hasn't changed in the 2+ decades since I started medical school and it probably never will.
Consider the greatest current loan forgiveness program out there for doctors, Public Service Loan Forgiveness. Many people think the inclusion of doctors and similar high earners in this program was a historical accident. President Obama's budget proposals repeatedly urged Congress to limit the amount of money forgiven to just $57K. That's not a doctor size student loan forgiveness program. And if that's the way the Democrats feel about it, how do you think the advocates of a smaller government on the other side of the aisle will feel?
Can Warren Forgive Loans Using an Executive Order?
Now some of you who really follow the news closely might object to my analysis above on the grounds that Senator Warren says she can forgive all student loans without going through Congress simply by using an executive order. It turns out this is a pretty flimsy statement when you really look into it. Adam Minsky, a student loan lawyer writing in Forbes says:
Senator Warren, however, has just announced that she plans on bypassing Congress altogether and enacting her proposal through executive authority. Her argument is that the Higher Education Act — the legislation that governs the federal student loan system — already provides authority for the U.S. Department of Education to compromise student loan debt. In other words, Congress has already allowed the federal government to cancel student loan debt, and the Department of Education can simply exercise its existing compromise authority to enact widespread student loan forgiveness.
Currently, that compromise authority is only extended to federal student loans in default, however. And even in cases of defaulted federal student loans, the Department defers to U.S. Department of Treasury regulations, which severely limit the extent to which federal student loans can be reduced or forgiven. Senator Warren is proposing a dramatic reinterpretation and expansion of this compromise authority to allow for the mass cancellation of student debt.
While her proposal would allow a future Warren administration to bypass Congress to enact her student loan forgiveness proposal, the plan is not without some potential problems. Consumer advocates have argued that using existing executive authority to cancel student loan debt is perfectly legal. However, other stakeholders (such as student loan servicers and debt collectors) could potentially challenge such a sweeping reinterpretation of federal regulations in court, arguing that it goes beyond what Congress intended when it wrote the Higher Education Act. If there is a legal challenge, any student loan forgiveness could potentially be halted by injunction until there is a final decision by a federal court.
Furthermore, the Higher Education Act only governs federal student loans, not private student loans. This means that Senator Warren would be unlikely to mandate private student loan forgiveness solely via executive order. Congress would probably have to step in for that.
Doesn't sound like such a “gimme putt” now does it? And besides, this is the lady who is proposing limiting forgiveness to just $50K for those making < $100K anyway.
Get Your Mindset Right
Mindset matters. If in your heart of hearts, you take responsibility for your financial situation (including student loans), take control of it, and start taking positive steps toward correcting it, you are very likely to be financially successful. If you passively accept your situation and simply hope somebody will come along to help you, then you are far less likely to ever be financially successful. Those of you hoping for a white knight riding in to save the day and forgive your student loan debt need to WAKE UP. The cavalry isn't coming. You'll need to summon the courage to climb out of that foxhole and storm the ridge yourself.
The Bottom Line
If you want to drag out your student loans because you're going for PSLF, I think that's reasonable.
If you want to drag out your student loans because they are only charging you 1-2% in interest and you have better uses for your money right now like paying off higher interest rate debt, maxing out retirement accounts, or even investing aggressively in stock index funds or real estate in a taxable account, I think that's reasonable.
But if you want to drag out your student loans because you think a white knight is going to ride into the White House in January 2021 and save you from your student loans, I think you're making a big mistake. Make a real student loan plan that involves obtaining Public Service Loan Forgiveness while building a PSLF Side Fund or refinancing those loans and paying them off quickly by living like a resident.
If you haven't refinanced lately, it may be time to do it again. More of your payment going to principal instead of interest and a few hundred dollars cash back will help speed up the day when you can scream I'm Debt Free! Here are the best deals on the internet for refinancing your student loans:
† Bonus includes cash rebates and value of free course. Borrowers who refinance more than $60,000 in student loans using the WCI links will be enrolled in The White Coat Investor’s flagship course, Fire Your Financial Advisor for free ($799 value). Borrowers will still receive the amazing cash rebates that WCI has negotiated with each lender. Offer valid for loan applications submitted from May 1, 2021 through March 15, 2024. Free course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/RefiBonus.
Student Loan Refinancing Disclosures
What do you think? How likely do you think doctors are to get their student loans completely wiped out in the next 3 years? Why? Comment below! [Limit your discussion to the topic at hand, avoid ad hominem attacks, and in general be pleasant or your comments will be deleted.]
Amen. I’m glad I dont waste any of my time on twitter or Facebook. It would have really annoyed me to read posts like you pointed out above (docs cheering for their loans to be forgiven by Bernie). Doctors don’t need student loan forgiveness. If you cant afford to pay off your loans making 250k+ per year, then you need financial education, not a handout from taxpayers. Maybe Warren or Bernie should propose free financial education for those making a doctor’s salary and still carrying a balance on their loans after a certain number of years post training? 😉
My “favorites” are the docs who make snarky claims they’ll send a bill to the govt if there’s ANY kind of forgiveness if they paid off a large amount in the past. Don’t whine. Be grateful you were in a position to pay off in the first place. Know that you’re blessed to be a high earner. But complaining is quite a common addiction this day and age, sadly.
I’m grateful we could repay our student loan debt for medical school.
That doesn’t mean I wouldn’t complain if our tax bill goes up to fund other physicians’ medical school costs.
Instead of receiving a payment for repaying our debts, how about voucher for discounted future healthcare that physicians who received loan forgiveness would be mandated to honor?
“Generally 2/3 of Senators must support its passage, meaning it must have support from individuals in both major parties.”
I’m all supportive of trying to educate people on how our government works but this sentence above unfortunately will further lead people to the wrong conclusion. This is not true. To overcome a filibuster, 60 senators, not 67, need to vote in favor of ending the filibuster under current senate rules. The ACA got through the senate because 60 senators voted to end the filibuster of that bill that Republican senators (then the minority party) had put up. We need to further educate all readers about the rules of government
Don’t forget reconciliation, which is how the ACA and the Trump Corporate Tax Giveaway were passed. That only requires 50 votes to pass.
I don’t think anyone feels strong enough about student loan forgiveness to attempt that.
Thanks for the correction. Will fix. Doesn’t change the argument.
totally agree. thanks!
This week I posted on Sermo about this topic with an article about parent who scrimped, worked overtime and a student (his daughter) who worked since age ten, saving all her money for college.
The fellow was at a campaign event for Warren and said, in effect: “ Your proposal is blatantly unfair to those of us who saved and did the right thing while coworkers of mine who made more money spent their money on vacations and toys while we worked extra and saved.”
He said: “You are laughing at us.”
There is a solution. Make the loans subject to partial discharge in bankruptcy. Then you get a case by case review that has a consequence. “Forgiveness” is the wrong word. Partial cancellation due to financial hardship makes more sense.
Making college more affordable and rewarding accountability as to costs and success rates for graduates also makes sense. Pre-loan counseling has failed. Making these loans harder to get also makes sense. Businesses have to have a workable pro forma to get a loan. Students should have to have one also.
I borrowed $60,000 from 1984-1990. My wife borrowed $40,000 for her MSW. My first year wage was $170,000. My wife’s degree paid less than her loan amount in first year wages. There need to be caps based on earning potential.
I’ve never understood the argument of “how dare someone else have it better than me.” So what? Today I wanted one scoop of ice cream. If tomorrow I find out that the shop charged people who had two scoops for one only, how does it make it unfair? You didn’t want those loans in the first place…
[Response to deleted comment deleted.]
The difference is if the ice cream shop started charging everyone else who doesn’t eat ice cream or already paid for the ice cream more in taxes to pay for the people getting the second scoop for free.
I would just say that you are woefully underestimating the number of people voting that are banking on free stuff. I think it is unlikely, too, however, November isn’t far away. I wouldn’t rush to pay them off super quickly until you see what happens then. Do you really want to be the chump that paid them off right before they were forgiven? Warren’s video proves you’re out of luck for doing the right thing. You’re not losing a ton on interest until November, and if there’s no change then definitely pay them off.
Great article. I’m not a doc, IT guy and I do not have any student loans but my wife does. I served and was able to take advantage of the GI bill. This article reflects my position on the “forgiveness” of student loans and I typically vote democrat. Its a populist move for votes and completely unfair as it is currently presented. I do agree that something needs to be done to curb the ability of people to get ridiculous loan amounts for degree paths that will never return a salary sufficient to pay them back. Seems a lot similar to the subprime mess we went through.
It is inconceivable that an enormous loan forgiveness program will get passed into law, for all the reasons you point out. It is clearly foolish to manage your personal finances around campaign rhetoric.
But I think what is important about the positions Warren and Sanders are taking is they are both saying, “The enormous student debt burden in this country is a huge problem, and it will continue to act as a drag on economic growth and wealth accumulation for younger Americans, and it causes angst and unhappiness for a great many people, and we should be thinking of ways to improve that because it is a widespread systemic problem with education funding and lending practices in this country.” That’s really all they are saying with these proposals. And I think recognition and prioritization of the problem is far better than ignoring it, which has been the modus operandi of politicians for too long. So they should be commended for trying to shift the debate from inaction towards action. We can argue about the details later.
I agree people are unhappy and that it is a huge problem. But that’s very different from telling people to basically ignore their loans in hopes of forgiveness.
Agree, which is why I don’t think this will happen. My point was that one argument for proposing bold policies is to move the Overton window for that topic, thereby changing what might be possible in the future. So in this case maybe we could go from nothing to something on the issue with some kind of compromise legislation if the public and their representatives are given a sense of motivation by response to the debate.
I agree and I learned a new term (Overton window). I’ve always thought that was a reason for proposals like this, but never knew the term.
There are definitely behavioral problems with student loan “forgiveness” and even the idea of it. However, in my case and many other physician’s case, it is a simple math and betting problem. It is about odds vs return. The odds of any student loan forgiveness for me is very very small as you have pointed out. However, the risk of waiting is also extremely small. I lose only an extra 400 bucks or so waiting to find out who is elected in November….in all branches. The risk of losing a few hundred bucks vs the reward of getting 70K in student loan debt forgiven is worth it….especially when I can just write a check at the end of the year to pay it all off if all this political rhetoric goes up in smoke. So there is definitely no reason to be in a rush to pay it off for me. Others, with 500K in student loans at 10% and >300K salaries should be paying down as much as possible now regardless of what the politicians are saying. Too much interest lost in waiting. So I understand the argument and agree with it as a whole, but there are situations where waiting seems prudent.
It’s not worth it when the odds are essentially zero. That’s what I’m saying. Even if it is only $400, you’re pissing away $400.
But 3% a year of $70K is a whole lot more than $400.
Should have clarified….70K is at 1.75% and I am making 1.25-2.00% in my money market holding the money. So I estimated about $400 using 1.75% -1.25% = 0.5% on the 70K. It’s almost even money either way.
You’re beating 1.75% AFTER tax with cash? Seems unlikely. Gotta adjust for taxes. So you’re coming out behind with that strategy. Either invest more aggressively or pay off the loan.
Thanks for stating this. I am also seeing too many doctors postponing paying off their student debt while they wait for a “savior.” I’m adding this to my Fawcett’s Favorites on Monday.
In principle I agree w you. But IMO what we have learned is that rules don’t matter since the only court that matters now is public opinion. Warren can issue an executive order to simply forgive all loans. Doesn’t matter whether it’s legal or not. Let it get tied up in courts forever, and if you lose then litigate whether back pay of interest is due when you have an expectation of forgiveness (the president said it!)
If it sounds like the slippery slope is that no rules matter and that’s bad for the economy, I agree. I think the next recession is one that comes with a complete loss of faith in governance. I’m not sure where to allocate my money when I’m not convinced it can’t be pilfered by a conman in government.
FWIW, despite being a “rabid lib” I agree w you now that I have every incentive to avoid taxes. Every America has already paid a dollar directly into the presidents family coffers from their luxury travel alone.
Let’s not forget that not only is there a virtually zero percent chance of student loan forgiveness happening (especially for high income earners), but there is a virtually zero percent chance that Trump will not win re-election. Anyone foolish enough to hold off paying off their loans for these very real odds, deserves to pay extra, unnecessary interest on their loans. I work in middle America and take care of pretty much nothing but Trump supporters. They still freaking love him. In fact, more now than before. He’s getting re-elected. Just accept that fact now and November won’t seem so bad.
[Politically inflammatory comment deleted]
[Response to deleted comment deleted.]
I agree with your first point, but not your second. The oddsmakers (see the link in the post) are giving Trump a 58% chance to win right now. But they also predicted a Clinton victory in 2016…
[Primarily political comment deleted.]
And I agree with WCI, outright student loan forgiveness is extremely unlikely. What’d be nice would be more options and larger dollar amounts for forgiveness through service to underserved areas, military, etc. Myself, I have a large med school debt and I am going back into the military reserves in an understaffed position, which will give me a large chunk of money for loan payback, for every year I serve.
Also, these guys usually give good predictions… https://fivethirtyeight.com/tag/election-results/
Sanders and Warren are also proposing Medicare plans that would double income taxes on all citizens and cut medical reimbursement by 40% and still not pay for themselves according to Mercatus. If that happens, who cares about student loans? We are all screwed. Back to work, sefs.
Doctors will be 100% excluded from any loan student forgiveness guaranteed. I made the mistake of getting excited for the recent Tax Cut legislation (especially when across the board corporate tax cuts were promised). Unfortunately, high income professionals such as doctors with corporations (such as S-Corp, like mine) were specifically excluded from those cuts. Bernie and Warren are very socialist in their policies and like it or not, as doctors WE are the rich people they want to go after. They will do all they can to redistribute wealth from the rich (in other words, doctors) and give it to the middle class. I wouldn’t be surprised that doctors not only do NOT get forgiveness but may also have additional taxes placed on them to help subsidize the loan forgiveness of the middle class. Sorry, that’s reality. We as doctors are rich and we are the ones that will be paying (not benefiting) from these type of policies.
Docs were excluded with or without an S Corp.
I think those currently in PSLF will get it if they otherwise qualify.
https://www.reddit.com/r/whitecoatinvestor/comments/etfaei/to_payoff_debt_or_invest/ffgk75q/
I didn’t even make it into a screenshot😢
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.” ― Alexander Fraser Tytler
I’m afraid he’s right.
Tytler quotes above… UBI, M4A, and Bloomberg rants on the forum… this post… White Coat is really turning into a politics site as of recent… personally, I’m not a fan. Stick to the money.
Stay out of the lounge on the forum. Anything that touches politics ends up in there. Skipping the blog comments might help too. I try to avoid it as much as I can while still touching the important financial issues in the blog. This post is about as close as it gets.
When the government is the majority consumer of your product (healthcare) and is your biggest single expense (taxes) any serious financial discussion will at least touch on political matters.
Essentially forgiving student loan debt is transferring that debt to another generation. Those who end up paying off the student debt may not have attended college/university themselves or perhaps they didn’t have any children. I like to ask those who are in favor of this plan, “How many students’ debts are you willing to pay off?” What’s fair? For each student to pay off their own debt. In 20 years, the college students of today will be paying off other students’ debts if this plan goes through.
Thanks for this, tough pill to swallow, but I needed to hear that.
there is bipartisan support that the filibuster (which is NOT in the constitution) has been used more and more in recent decades to obstruct real work getting done in Congress. It’s lead to executive overreach in both parties via executive order basically taking the place of the legislative branch. Not something to be praising.
Trump and Warren both support elimination of the filibuster: https://www.google.com/amp/s/thehill.com/opinion/white-house/458664-strange-bedfellows-oppose-the-filibuster%3famp
A little history ok which “minorities” the filibuster is actually protecting – spoiler alert, it’s not religious or racial minorities: https://youtu.be/3y1QA6OeAcQ
Those of us who grew up in the states with tiny populations are extremely grateful for the protection provided by the Senate with its filibuster. Otherwise we would have been completely instead of just mostly ignored.
https://www.forbes.com/sites/adamminsky/2020/05/04/widespread-student-loan-forgiveness-is-more-likely-now-than-ever-before–heres-why/#104f344b432b
Does the current situation with the pandemic/high unemployment make you think it’s any more likely that loans will be forgiven? After all, they did just go to 0% interest for 6 months. To be clear, I’m not arguing that people ignore their loans and pray for a miracle. But it seems like there are some possibilities here. Even if loans aren’t completely forgiven, the zero percent interest period could get extended. There was even a proposal in congress recently that would forgive student loans for “frontline healthcare workers.” If the unemployment rate gets high enough, loan forgiveness could get bipartisan support.
Anything could happen, but I make my plans based on current law. If law changes, I change my plans. Otherwise, you’re just praying for a miracle.
So after reading that article, you still think there are docs who should refinance federal student loans this summer? What is a hypothetical scenario where it makes sense to refinance federal loans right now?
Impossible to know whether docs should or shouldn’t without knowing the future. Certainly, under current law, I expect lots of people to be applying to refinance in September so their new rate goes live on October 1.
But if rates are higher in October than they are now they could come out behind waiting to refinance. The longer they carry their loans and the larger the difference, the more likely they could come behind for waiting.