Increasingly, private student loan companies are stepping up collections activities in Massachusetts against borrowers who are in default on their private student loans, including by filing lawsuits against borrowers in Massachusetts state courts. As a result, many borrowers facing collections lawsuits are looking for a student loan lawyer for counsel or representation.
Federal student loan collections activity remains paused due the ongoing Covid-19 moratorium. The student loan pause has suspended most federal student loan payments and interest and stopped collections activity since March 2020. That relief is currently set to end later this summer.
But private student loans are not covered by this federal debt relief. And unlike federal student loans, private student loan lenders typically must resort to a collections lawsuit in state court to try to force a borrower to pay on an unpaid loan. That’s because private lenders do not have the same administrative powers that federal student loan lenders do, such as Administrative Wage Garnishment (garnishing wages without a court order) or Treasury Offset (which can seize a borrower’s federal tax refund or a portion of Social Security benefits). Private student loan lenders need a judgment, and to get a judgment, they have to file a lawsuit.
Here’s what’s going on.Read More