Boston Student Loan Lawyer

Law Office of Adam S. Minsky

The Student Loan Lenders Most Likely to Sue You

| Articles Default Private Student Loans Student Loans 101

For most types of private student loans, the only way that the lenders can forcibly collect from borrowers is to file a lawsuit in court. That’s because most private student loan lenders do not have the same collections powers as the federal government – they generally cannot garnish wages, put a lien on a home, or seize any assets without first obtaining a court judgment. That judgment then gives the lender additional powers to pursue the borrower if he or she doesn’t start paying.

So you would think that all private lenders sue defaulted student loan borrowers, right? Well, that’s not necessarily true. In New York and Massachusetts (where I practice), let’s just say that some student loan lenders are more litigious than others. The following is based on my own personal anecdotal experiences representing student loan borrowers – it is not scientific, and it is by no means representative of national trends. And if your student loan lender isn’t on this list, it doesn’t mean you can’t or won’t be sued. But, perhaps my observations below can be insightful.Read More

Student Loan Tax Season Tips

| Articles Default Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Taxes

Tax time is a stressful time, I know. And if you have student loans, there’s even more to think about. Here are are some tax-related tips to help guide you.

Deduct Your Student Loan Interest

Some of the student loan interest that you paid during 2016 may be tax deductible, which could lower your tax bill. Watch for a 1098-E statement issued by your student loan lenders, which will show the total amount of interest payments during 2016. Just keep in mind that the amount of this deduction is capped, and it is phased out entirely for higher income earners. Be sure to talk to your accountant to see if you’re eligible for this deduction.Read More

Predatory Student Loan Relief Company is Sued

| Articles Cosigners Current Events Default Site & Practice News

Amy and Josh were just getting started, but they were already struggling. Amy had just completed nursing school, while Josh had just graduated from the police academy. They had two young children, and were struggling to keep up with massive private Navient student loan payments that they could barely afford.

That’s when they got a call from a company called “Consumer Protection Counsel” (CPC). CPC promised that if Amy and Josh simply stopped paying their private student loans – and started paying CPC instead – CPC’s team of experts and attorneys would protect them from Navient, and their private student loans would either be canceled or deemed uncollectible. Their credit histories would be protected and even repaired. All they had to do was sign a contract and pay a monthly fee. The deal seemed too good to be true, but Amy and Josh felt trapped by their student debt, and they didn’t know what else to do. After a series of high-pressure phone calls from CPC, they signed on the dotted line and began sending monthly payments to CPC – and stopped paying Navient.Read More

End-of-the-Year Student Loan News Roundup

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

2016 has been a big year in student loan law. We saw the release of Revised Pay As You Earn (REPAYE), a new income-driven repayment plan for federal student loans, although its rollout and implementation were a bit of a mess. We saw a continued federal crackdown on predatory for-profit schools which resulted in the collapse of ITT Technical Institute. The Obama administration issued final rules on student loan forgiveness and debt relief for students who were defrauded by their colleges and universities. And finally, Donald Trump was elected to be the next President, leading to a great deal of uncertainty about the direction of student loan programs.

There’s never a dull moment when it comes to student loan issues, and as the year comes to a close, there’s still a lot going on. Here are some highlights. Read More

7 Student Loan Protections to be Thankful For

| Articles Current Events Default For-Profit Colleges Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform

turkeyIt’s been two weeks since the election, and there’s still much uncertainty about what the consequences of the election will be for student loan borrowers. While Hillary Clinton had mapped out a series of student loan reform proposals, Donald Trump has been far less specific about how he plans to deal with the $1.4 trillion in outstanding student debt.

In this time of uncertainty, and in keeping with the upcoming Thanksgiving holiday, I think it’s a good time to take stock of what we have and be grateful. If you follow this blog, you know that I frequently write about problems and deficiencies with the the student loan system. And for good reason – student loans are a mess, with inefficient servicing, damaging debt collection, and the potential for life-altering negative consequences for borrowers. There’s a lot to be angry about, and a lot that should change.

But, there are also good elements of the student loan system – programs and laws that keep people in good standing, allow them to repay their loans fairly, and protect them from abuses. As we press forward into this period of change and uncertainty, we may have to do some hard work to preserve what we have.Read More

Student Loan Consolidation Errors Can Be Costly

| Articles Default Student Loans 101

moneyThis 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

7 Reasons Why This Election Matters for Student Loan Borrowers

| Articles Current Events Default For-Profit Colleges Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform Private Student Loans Taxes

DT and HCThe presidential party conventions are over, and what seems like the “election that never ends” will actually be over in less than 100 days.

A lot is being said about this election – that it’s the most important in a generation; that it could fundamentally change the United States and its place in the world; that our core national values are at stake. All of this may be true, and there’s plenty of analysis out there about how big and important it is.

But as a student loan attorney, I can tell you without hesitation that this presidential election is going to have a real, tangible impact on millions of student loan borrowers. It’s going to have significant, lasting consequences. What these impacts and consequences look like, however, will depend primarily on who wins this November. If you have student loans, you should be paying attention. Here’s why:Read More

4 New Debt Collection Rules in New York

| Articles Current Events Default Policy & Reform Private Student Loans

NY State AssemblyNew York State recently implemented new, stronger laws regulating debt collectors – including debt collectors that pursue student loan borrowers. The changes go above and beyond what is required under federal debt collection laws and make New York one of the strongest states in the country for consumer protection.

Strengthening consumer debt collection laws is critical for student loan borrowers. Nearly one in four borrowers are delinquent or in default on their student loans, and that figure has been stubbornly persistent despite the addition of new repayment programs and increasing scrutiny on student loan servicing. It doesn’t help that federal student loan collectors have enormous powers to pursue defaulted borrowers. Private student loan lenders often engage in aggressive tactics as well, and may resort to filing lawsuits against student loan borrowers.

Here’s a summary of some of the major new rules in New York protecting student loan borrowers and other consumers:Read More

The Australian Student Loan System: A Model For Reform?

| Articles Current Events Default Income-Driven Repayment Policy & Reform

Reliefmap_of_AustraliaIf you’re a regular reader of my blog, then I might sound like a bit of a broken record when I say that student loan reform is going to happen. Well, it is.

First of all, there is widespread, bipartisan agreement that our current system is flawed and unsustainable. Furthermore, the U.S. Dept. of Education will soon be selecting (or renewing) contracts for federal student loan servicing and debt collection, two areas that need some major industry-wide changes. Moreover, even now, the U.S. Dept. of Education is in the process of creating new regulations governing loan forgiveness and for-profit schools. And finally, the Higher Education Act (HEA), which is the statute that governs much of the federal student loan system, is up for reauthorization; the process of reauthorizing the HEA has historically been a vehicle for making big changes to the overall federal aid system.

Reform is happening. But what is that reform ultimately going to look like?

There are a lot of proposals out there from presidential candidates, lawmakers, think tanks, advocacy and policy organizations, and many other stakeholders. There are proposals for free public postsecondary education. There are calls to allow borrowers to refinance their student loans at lower interest rates. There are proposals to streamline income-driven repayment plans by combining several confusing plans into one and creating a system of automatic payments through payroll deductions or the IRS tax filing system. There are ideas to better “target” safety net programs like loan forgiveness and discharges (which could mean a variety of things).

If only there was an existing blueprint of a student loan system that generally works, or at least works better than what we have now…Read More

The End of the Worst Student Loan Clause?

| Articles Cosigners Current Events Default Policy & Reform Private Student Loans

 

ContractMany private student loan contracts have a tiny little clause, hidden away in the obscure depths of the fine print. It’s written in formal and somewhat vague language, but it basically says that if the cosigner or the borrower dies or declares bankruptcy, the entire balance of the private student loan is due immediately. This can be true even where the borrower (or cosigner) has been making regular, on-time monthly installment payments and can continue to do so.

I call this the “death and bankruptcy clause.” It’s essentially an automatic default: if you can’t pay the entire loan balance right then, the “accelerated” loan will go into default and collections. Sometimes, borrowers are not even notified of the situation until the loan has been placed with a third-party debt collector and has been reported to national credit bureaus as charged-off or defaulted.

As you can imagine, this leads to terrible situations. Imagine a borrower who has a good job and is making regular payments, when the cosigner (perhaps a well-meaning family member who got into trouble, or an ex-spouse who the borrower hasn’t heard from in years) declares bankruptcy. Suddenly, the student loan is in default. Or how about the situation where the borrower’s mother dies – mom is a cosigner on the borrower’s private student loan, and hasn’t really had much to do with the loan since she originally signed for it. But now, the borrower is going to have to deal with default and a collections agency, on top of the grief of losing a parent.

Absurd, isn’t it?

Well, this little clause from hell might be getting extinguished.Read More