A “forbearance” allows student loan borrowers to temporarily postpone payments on their student loans. It’s a great – and important – option available to people who cannot afford their regular monthly payments, because it allows you to stay in good standing on your student loan and avoid default. But forbearance is not without its consequences, and when used improperly, it can cause major problems.Read More
Happy New Year! I hope everyone had a wonderful holiday season. For better of for worse, it’s the time of year for New Year’s resolutions. We’re all going to exercise more, eat better, and call our long-distance relatives more frequently, right? (Well, for at least a month or two).
But financial New Year’s resolutions can be just as valuable as the more “cliché” promises we are used to hearing in the beginning of January. And I encourage everyone to consider some student loan resolutions to help manage your student loan debt more effectively. Here’s my list of some student loan New Year’s resolutions that I hope you will consider.Read More
The following is a guest article by Jon M. Luskin, a fee-only CERTIFIED FINANCIAL PLANNERTM (CFP®) at Define Financial.
If you’re spending less money than you make, give yourself a pat on the back for being frugal! But, how are you going to handle that extra cash: pay off your student loan debt, or invest?
Why would anyone with a student loan balance invest in the stock market? Because you’re hoping that the investment return will be greater than the interest rate on your student loan.
Investment Return > Student Loan Interest Rate
Notice that the keyword is “hope.” Will your investment return actually be greater than your student loan interest rate? Maybe. It depends. On what? A few things. Read on to find out! Read More
This month, I’m wrapping up two cases that involved major federal student loan consolidation errors by the U.S. Dept. of Education and an assortment of student loan guaranty agencies, servicers, and debt collectors. These errors were massive, complex, and entirely not the borrower’s fault. They also took months of effort and coordination to resolve. I am ecstatic that we obtained good outcomes for my clients and got the errors fixed, but unfortunately these problems are not exactly uncommon. It really shouldn’t be this difficult for student loan borrowers, but sometimes, it is.
If you’re thinking about consolidating your federal student loans through the federal Direct consolidation program, there are potentially many benefits: streamlined repayment (one combined loan, one servicer, one monthly bill); simplified interest (if you are converting variable-rate loans to the fixed, weighted-average interest rate provided by the Direct consolidation program); default resolution if you are including defaulted federal student loans in the consolidation; and conversion to the Direct loan program through which you can access some additional student loan forgiveness and repayment programs.
But when things go wrong – especially due to mistakes outside of your control – it can be a mess to untangle. Here are some things to watch out for.Read More
I’m excited to announce several upcoming events where I’ll be presenting on student loan law topics. Check it out:
- September 15, 2016, “Student Loans: Debt and Forgiveness 101,” Association for Behavioral Healthcare, Natick, MA.
- September 18, 2016, “Student Loan Intensive: A full-day workshop for financial advisors,” 2016 Conference, XY Planning Network, San Diego, CA.
- October 5, 2016, Student Loan Management for Attorneys and Law Students webinar, North Carolina Bar Association Center for Practice Management.
- October 6, 2016, Student Loan Management for AmeriCorps Members webinar, AmeriCorps Legal Advocates of Massachusetts.
- October 7, 2016, Student Loan Management for Financial Planners, Financial Planning Association of Massachusetts, Quincy, MA.
- October 21, 2016, “Developing a Student Loan Practice,” Consumer Rights Litigation Conference, National Consumer Law Center and National Association of Consumer Advocates, Anaheim, CA.
If you’re a recent graduate from college or graduate school, you probably have a lot on your mind – employment, housing, bills, maybe even professional licensing examinations (I’m still traumatized from the bar exam). If you took out student loan debt to finance your education, you should be thinking about your student loans, too, even if you don’t want to.
A lot of people have advice and suggestions for what recent graduates should do with their student loans immediately after graduating. However, I have the unfortunate position of seeing what happens when borrowers don’t do the right thing – they may make a seemingly innocuous error or oversight, which can come back to bite them later in a very big and damaging way. The system shouldn’t be so tricky to navigate and so riddled with land mines, but unfortunately, that’s the student loan landscape that we currently have to work with.
Here’s what you should be doing and thinking about as a recent graduate with student loans:Read More
I am thrilled to announce the release of my new book, The Student Loan Handbook for Law Students and Attorneys, published by the American Bar Association. It’s the first and only book of its kind: a concise student loan management guide geared specifically to lawyers and soon-to-be law grads.
Here’s what the ABA has to say about the book:
Getting student loans is remarkably easy – but dealing with student loan repayment can be a nightmare. And as student loan debt continues to grow and repayment programs get even more complicated, it’s no wonder that so many borrowers feel lost. The typical college graduate takes on an average of over $30,000 in student loans, and the numbers are even more staggering for law school graduates. Considering the combined cost of an undergraduate and law school education, the average law school debt burden can easily exceed $100,000. With the many challenges unique to new lawyers, it can be difficult to create an effective plan for managing student loans while studying for the bar exam, searching for a job, and adjusting to a new work environment.Read More
It’s no surprise that student loan scam operations have been cropping up all over the country. Given the exponential increase in student loan debt burdens, the complete disaster that is our student loan servicing system, and insufficient oversight by the federal government, it’s no wonder that people are looking for help anywhere they can get it. And whenever there are people in need, there are others who are looking to take advantage.
Luckily, we’re beginning to see law enforcement crack down. Just last week, the Massachusetts Attorney General announced a settlement with several major student debt “assistance” companies that charged excessive fees and engaged in overly aggressive and deceptive marketing practices.
I’ve already written several articles about predatory tactics that these scammers have been employing. These approaches include direct mail that uses official-looking letterhead (making it seem like it’s coming from the government); anonymous, non-credentialed staff selling services that borrowers can obtain for free; and advertising that references the Obama administration to make the services seem more “official.” Once a borrower makes contact and engages with the company, they are often charged excessive fees for services that can otherwise be done completely for free – and in the process, the companies sometimes mess up, make misrepresentations, fail to deliver, or they provide inadequate counseling, leaving borrowers in an even worse position than they otherwise would have been.
I’ve continued to monitor the operations of these companies, and lately I’ve been seeing some new marketing tactics that I wanted to share with you all:Read More
Income-driven repayment plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) offer millions of federal student loan borrowers the opportunity to have a uniquely tailored monthly payment based on their income and family size. The programs also offer forgiveness of any remaining loan balance at the end of their respective repayment terms (20 or 25 years, depending on the program). Although far from perfect, for many borrowers these programs are the only thing standing between them and default, as “regular” repayment plans based on the loan balance would be unaffordable.
Income-driven repayment plans can be complicated to navigate, however, and not everyone knows some of the features that can provide even more relief. Here’s a short list of the most glaringly lesser-known programmatic features of income-driven repayment:Read More
I am pleased to announce that my book, Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans, has been re-published to reflect recent changes in student loan law. This second edition contains critical new updates about federal student loan repayment plans, forgiveness programs, and federal default resolution programs.