Boston Student Loan Lawyer

Law Office of Adam S. Minsky

Student Loan Legislation Update

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There is quite a lot going on right now when it comes to student loans. It seems that every month there’s a new bill or a new rule that could significantly impact student loan borrowers. But keeping track of it all can be a bit overwhelming.

First, a very brief overview of how law-making works. Our legal and political system is multi-layered and may seem complicated, but I’ll break it down for you:

  • Legislation – or a proposal for a new law – must be passed by a law-making body like Congress (at the federal level) or a state legislature (at the state level). Congress, and most state legislatures, have two chambers – the House and the Senate – and legislation must pass both chambers, and be signed by the President (or a Governor) to become law.
  • Regulations (also simply called rules) can be created by executive agencies, such as the U.S. Department of Education. Agencies have broad powers to issue new rules or regulations under existing statutes, which can dramatically impact programs that were already created by previous legislation. When agencies create new rules or regulations, they have to follow a formal process before they can go into effect, but they do not typically require approval by Congress (or an equivalent state legislature).

So, with the above in mind, here’s my overview of the most important developments during the last few weeks.Read More

Four Dark Secrets of Income Driven Repayment

| Articles Income-Driven Repayment Loan Forgiveness Student Loans 101

“Income-driven repayment” (sometimes referred to as income-based repayment) is an umbrella term for student loan repayment plans that allow borrowers to make payments on their federal student loans based on their income. The plans – and there are several, including one called Income Based Repayment – use a formula tied to the borrower’s income and family size, resulting in a monthly payment that lasts for up to 12 months at a time. The borrower must then renew the plan before the end of that 12-month period by submitting new documentation of income. Any changes to income could result in changes to the monthly payment, but after making payments for many years (the repayment term depends on the specific plan), any remaining balance gets forgiven.

Income-driven repayment has enormous benefits to student loan borrowers, as it allows borrowers to have affordable monthly payments, even for large federal loan balances, and thus keep their federal loans in good standing. These plans also do not require full loan payoff, as there is a loan forgiveness “safety net” at the end of the repayment term.

But it’s not all sunshine and roses. There are some potentially serious drawbacks to income-driven repayment, and borrowers considering these plans should be aware of them.Read More

The Supreme Court and Student Loans

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Will the recent news about the U.S. Supreme Court impact student loan borrowers?

This week’s announcement that Justice Anthony Kennedy would be retiring from the Court certainly sent shockwaves through the country. While generally a conservative justice, Kennedy has been widely seen as a swing vote and force of moderation in an increasingly polarized court. With the filibuster for Supreme Court nominees gone, and Republicans maintaining slim but firm control over the United States Senate, most people expect President Trump’s eventually nominee – who will likely be far more conservative than Kennedy – to be confirmed. This could cause a significant idealogical shift for the Court.

It’s difficult to know what this might mean for student loan borrowers. There haven’t been any major recent student loan-related Supreme Court decisions, nor have any new student loan cases been accepted yet by the Court for its next term. But with student loans increasingly becoming a major national issue, I think it’s inevitable that cases impacting student loan borrowers will find their way to the Court. Here’s my take on some of the most likely cases that would impact student loan borrowers during the next few years.Read More

The Latest Student Loan Servicing News

| Articles Current Events Income-Driven Repayment

There’s always a lot going on when it comes to student loan servicing, and it can be hard to keep track of everything. Here are some of the latest developments impacting student loan borrowers:

Great Lakes Higher Education and NelNet. Last year, Great Lakes and Nelnet – two of the largest student loan servicers in the country – announced that they would be merging (Nelnet purchased Great Lakes for $150 million). The merger should be completed this year, and in the meantime, I am already seeing some Great Lakes accounts being migrated over to Nelnet. If you are a Great Lakes customer, you will likely be switching over to Nelnet before the end of this year, so just be ready for that. Borrowers may have to re-establish their payment arrangements (such as auto-debit).Read More

BREAKING: New Details on Expanded Student Loan Forgiveness

| Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

A couple of months ago, Congress passed new legislation expanding eligibility requirements for Public Service Loan Forgiveness (PSLF). That legislation gave the U.S. Dept. of Education 60 days to create formal notice and a procedure for evaluating applicants requesting forgiveness under this expanded program. We haven’t known what the procedure would be, and how or when borrowers could gain access to this program – until now. And, unfortunately, I think it’s going to be a mess.

First, a recap of PSLF. To get your student loans forgiven under the program, a borrower must make 120 “qualifying payments.” A “qualifying payment” is one that is made (1) on the right type of federal student loan, which is a Direct loan; (2) under the right type of repayment plan – which is either an income-driven repayment plan or the 10-year Standard plan; while (3) working in qualifying employment. Read More

Do Student Loans Have a Statute of Limitations?

| Articles Default Loan Forgiveness Private Student Loans

A “statute of limitations” is a period of time within which someone must bring a legal claim or file a lawsuit in court. These time periods are set by law, and they vary in length depending on the subject matter. There are statutes of limitations for charging someone with a crime, for suing someone for breaching a contract, and for seeking recovery from someone who caused an injury. If someone brings a legal action or files a lawsuit after the statute of limitations has run (meaning, after the requisite time period has passed), the action could be dismissed, and then they wouldn’t be able to prevail on their claims.

In the student loan context, it’s usually student loan creditors who are suing borrowers to collect on defaulted student loans. In some cases, if the creditor waits too long, collection of the debt could be “time-barred” by the statute of limitations. If the borrower raises this as a legal defense in response to the lawsuit and prevails, the creditor’s lawsuit would be dismissed, and the debt would effectively become uncollectible (although it doesn’t necessarily just cease to exist).

But when it comes to student loan collections, understanding the statute of limitations can be challenging. How long does a lender have to sue someone to collect on student debt? The length of that limitations period – and whether there even is one – depends on a number of key elements including the type of student loan, the status of that loan, federal law, state law, and the loan’s history. It can be complicated; let’s break it down.Read More

Here’s a List of Rollbacks to Student Loan Protections

| Articles Current Events For-Profit Colleges Income-Driven Repayment Loan Forgiveness Policy & Reform

The Trump/DeVos administration has been busy during the past 18 months, rolling back significant protections for student loan borrowers and their families. Just in the past couple of weeks, there have been two new developments that curtail regulation of predatory schools, lenders, servicers, and debt collectors.

First, the Consumer Financial Protection Bureau (CFPB), now under the leadership of Trump appointee Mick Mulvaney, effectively eliminated its student loan division by rolling it into a different department that has no investigatory or enforcement power. Previously, the CFPB’s student loan division had issued comprehensive, data-driven reports on the atrocious state of federal student loan servicing. It had also brought numerous enforcement actions and filed several lawsuits against predatory companies, including Navient, returning upwards of $750 million to student loan borrowers and other consumers harmed by unfair or harmful business practices. It looks like we can no longer count on the CFPB to do this work. Read More

5 Reasons Not to Refinance Your Federal Student Loans

| Articles Cosigners Default Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Private Student Loans

Student loan refinancing has been a hot topic during the past several years. Trendy new companies – like SoFi, Earnest, LendKey, and CommonBond – have been offering slick refinancing products to entice borrowers. Major banks and credit unions have also jumped in, sometimes offering tantalizingly low interest rates. The best loan products are generally marketed to doctors, lawyers, and other high-income professionals who tend to have large amounts of federal student loan debt, but great earning potential and excellent credit.

A lower interest rate is often the central reason to explore refinancing; after all, a lower interest rate will save you money in the long run, and could lower your monthly payments, as well. But that’s not the only thing borrowers should be considering. Turning federal student loans into private student loans through refinancing can have major, irreversible consequences, and it’s important to know what you might be giving up in exchange for that lower rate.Read More

MA Senate Passes Student Loan Bill of Rights

| Articles Current Events Policy & Reform

This week, the Massachusetts State Senate unanimously passed the Student Loan Bill of Rights – powerful legislation that would enshrine new state-level protections for student loan borrowers in the Commonwealth. I was proud to testify at the State House last year in support of the bill, and I am thrilled to see it pass the State Senate with bipartisan support.

The bill still has to pass the House and be signed by Governor Baker before it becomes law. But this is a major first step. If it becomes law, the legislation could do a lot to protect student loan borrowers. Here’s how:Read More

BREAKING: Expanded Eligibility for Public Service Loan Forgiveness

| Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

Last week, Congress passed – and the President signed – a major spending package that touches nearly every element of society. Buried deep within the 2,200 pages of legislation are some interesting provisions regarding the Public Service Loan Forgiveness (PSLF) program, which allows borrowers to get any remaining balance on their federal student loans forgiven after 10 years of “qualifying payments.”

First, a recap of the PSLF program. It’s not so much about “10 years” of qualifying payments as it is 120 individually qualifying monthly payments (which, if made consecutively, add up to 10 years). A “qualifying payment” is one that is (1) made on Direct federal student loans, (2) under a qualifying repayment plan – which is either the 10-year Standard plan or an income-driven repayment plan, while (3) working full-time for a qualifying public service employer.Read More