Boston Student Loan Lawyer

Law Office of Adam S. Minsky

5 Steps to Start Tackling Your Student Loans

| Articles Default Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Private Student Loans Student Loans 101

It’s time to start liberating yourself from your student loan debt.

We’ve got a true student loan crisis – there’s over $1.4 trillion in student debt, and that number keeps on rising. The average undergrad leaves college with nearly $40,000 in student loans, and over 7 in 10 recent graduates are in the red. Twenty-five percent  of student loan borrowers are in distress – meaning they are in a suspended status, behind in payments, or in default. And things only seem to be getting worse.

With this as a backdrop, it’s easy to become paralyzed. The loan balance figures and payment amounts can be distressing. Figuring our your repayment options can be overwhelming. It doesn’t help that loan servicers often provide incorrect or misleading information. It’s easy to feel like you’re lost.

But ignoring the problem isn’t going to make it go away; student loans don’t just disappear. Even if there are only imperfect solutions out there right now, it’s important to take stock of your situation, figure out what your options are, and optimize your student loan management approach. Only then can you start getting on the path to student debt freedom. Here’s how you can get started.Read More

Paying Off Your Student Loans the Right Way

| Articles Income-Driven Repayment Private Student Loans Student Loans 101

If you have multiple student loans, all with different loan balances, interest rates, and lenders, it can feel overwhelming to manage. Should you pay just your minimum monthly payments, or should you pay extra when you can? Which loan should you pay off first? How do you prioritize?

Here are some general rules to consider.

Private Student Loans Before Federal

On the whole, federal student loans have a lot more repayment options and many more consumer protections compared to private loans. Federal loans have discharges available due to death or disability; there is a right to cure federal student loan default; and federal loans typically have flexible repayment options, including income-driven repayment. Private student loans typically don’t have these options or protections. So even if the interest rates on your federal student loans are relatively high, it still might make more sense to pay off your private loans first. You never know what could happen in the future, or when you might need those federal student loan protections.Read More

BREAKING: CFPB Goes After Major Private Student Loan Holder

| Articles Current Events Default Private Student Loans

This is a developing story.

The federal Consumer Financial Protection Bureau (CFPB) has reached a major enforcement agreement with National Collegiate Student Loan Trust, the holder of hundreds of thousands of student loan accounts, about its debt collection practices. This agreement has the potential to impact thousands of student loan borrowers across the country.

Background

National Collegiate Trust (“NCT”) is a collection of individual trust entities that purchased hundreds of thousands of private student loan accounts from commercial lenders (mostly banks) through securitization. In other words, banks bundled many private student loan accounts together, and then sold the bundles to NCT. When student loan borrowers with NCT-purchased accounts became unable to pay, NCT aggressively pursued these borrowers through private debt collectors and litigation.Read More

Who Is National Collegiate Trust?

| Articles Default Private Student Loans

National Collegiate Trust – formally known as National Collegiate Student Loan Trust, or NCSLT for short – is one of the biggest players in private student loan litigation. But you may never have heard of them. And you may not even realize that they claim to be the owner of your student loan.

Who, or What, is National Collegiate Trust?

NCSLT is not a student loan company; it’s not even a single organizational entity. There’s no call center, no corporate headquarters. Rather, NCSLT is a catch-all term used to describe dozens of individual trusts (the trusts are usually designated by a year and a trust designation – for example, “National Collegiate Student Loan Trust 2006-2”, or “National Collegiate Student Loan Trust 2007-1”). The NCSLT trusts contracts out student loan servicing operations and debt collection to various third parties (such as American Education Services, or AES), so you’ll probably never actually deal with one of the trusts directly.Read More

Student Loan News Summary – June 2017

| Articles Current Events For-Profit Colleges Loan Forgiveness Private Student Loans

Happy summer, everyone. With all the big national news going on lately, there’s a lot of developments in student loan law and policy that are flying a bit under the radar. Let’s bring everyone up to speed.

Credit Report Changes Will Help Student Loan Borrowers Who’ve Been Sued

Starting July 1, the three major credit bureaus (Equifax, Experian, and TransUnion) will no longer report civil judgments on people’s credit reports. There have been ongoing concerns about credit reporting errors for judgments, since a judgment is often not linked to a person’s social security number. This is a significant change that will have a direct, positive impact on borrowers who have been sued by their student loan lenders.Read More

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

5 Tips When Facing a Student Loan Lawsuit

| Articles Private Student Loans Student Loans 101

If you default on your federal student loans, the consequences can be pretty severe, but it’s generally unlikely that you will be sued. That’s because the federal government has enormously powerful tools to pursue defaulted federal student loan borrowers without the need for a court order. Federal lenders and debt collectors can garnish wages, intercept federal tax refunds, offset Social Security benefits, and seize federal income streams – all without stepping foot in a courtroom. While the feds do sue borrowers in some cases, especially when a borrower is not otherwise “reachable” through its normal collection methods, it’s not particularly common (at least in Massachusetts and New York, where I practice).

But private student loans are another story. Private student loan lenders do not have the same powers as the federal government. They generally cannot do anything to you without obtaining a court judgment first – and that requires that they file a lawsuit against you. But suing you is only the first step in the process.

Facing a private student loan lawsuit can be overwhelming and terrifying. If you find yourself being sued, there are some steps you can take to protect yourself.Read More

How (Not) To Use Forbearance

| Articles Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Private Student Loans Student Loans 101

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

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

New Student Loan – Mortgage Refinancing Product

| Articles Current Events Policy & Reform Private Student Loans

houseThe ability to refinance student loans is a big topic right now. Currently, there are no options to refinance federal student loans at lower interest rates while remaining in the federal student aid system (which I believe is problematic). There are an increasing number of private student loan refinancing options available, but these programs are generally geared towards high-income borrowers and carry their own set of risks and concerns.

SoFi, one of the major new private student loan refinancing companies, recently announced a new refinancing program involving mortgages. Specifically, SoFi has partnered with Fannie Mae to offer a mortgage refinancing program that can also be used to refinance student loan debt. In other words, borrowers who own a home could potentially take out a new mortgage at a lower interest rate to pay off their current mortgage and their student loan debt, too.

This student loan-mortgage combo refinancing package has some clear benefits. First of all, because a mortgage is a “secured” debt (meaning the debt is backed by an asset – in this case, a home), there is less risk to the lender, and so they are willing to offer a lower interest rate. Furthermore, mortgage interest rates are at historic lows at the moment. So homeowners can take advantage of the current interest rate environment to lower their rates on both their mortgage debt and their student loan debt. Depending on the borrower, this could lead to substantial savings.

However, this type of refinancing product also carries some risk. First of all, if borrowers are refinancing federal student loans into any type of private student loan, they may forever lose out on the unique consumer protections offered by the federal student loan system such as income-driven repayment, profession-based loan forgiveness, and discharges upon death or disability. Even more problematic, however, is the fact that with this specific type of refinancing product, borrowers would be turning an “unsecured” debt (a student loan not backed by any asset) into a “secured” debt (a mortgage backed by the borrower’s home). While defaulting on federal and private student loans is no picnic, defaulting on a mortgage means the mortgage lender can foreclose on the home – meaning force a sale. Is the interest rate reduction worth that risk?

There’s no right or wrong answer here, but I expect these types of refinancing programs to grow in popularity as long as the housing market remains strong. Borrowers who may be in a position to refinance their student loans through these programs should fully understand the potential risks and rewards before entering into any contract.