Boston Student Loan Lawyer

Law Office of Adam S. Minsky

6 Ways to Beat Student Loan Default

| Articles Default Loan Forgiveness Private Student Loans Student Loans 101

Defaulting on student loans can be terrifying, damaging, and costly. Federal student loan lenders have enormously powerful tools to pursue student loan borrowers in default. For example, the federal government and federally-backed guaranty agencies can garnish a borrower’s wages, offset a borrower’s Social Security benefits, and intercept a borrower’s tax refund, all without a court order. Private student loan lenders don’t always have the same powers, but they can file lawsuits against borrowers in state courts, and then try to attach assets to satisfy any resulting judgments. Defaulting on both private and federal loans can lead to financial penalties and significant credit damage, as well.

But it’s not all doom and gloom. Borrowers in default on their student loans have legal rights and options. And they may ultimately have the ability to fix their defaulted student loans.

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We Need A Student Loan Servicing Enforcement Unit

| Articles Current Events Income-Driven Repayment Loan Forgiveness Student Loans 101

Last week, the New York Attorney General’s office reached a $9 million settlement with ACS – one of the country’s major student loan servicers – for systematically harming student loan borrowers by misinforming them, misleading them, misapplying payments, and more.

As far as I can tell, no one who works with student loan borrowers is surprised. The types of problems that the New York Attorney General’s office found are widespread, and by no means limited to ACS. The Consumer Financial Protection Bureau (CFPB) has reported extensively on rampant student loan servicing problems throughout the industry. Major lawsuits brought by other state attorney general’s offices are still ongoing against giants such as Navient and the Pennsylvania Higher Education Assistance Authority (PHEAA), which also runs FedLoan Servicing. Even smaller servicers such as ECSI have been under investigation.

Why is Student Loan Servicing a Mess?

It doesn’t take a rocket scientist (or a student loan expert) to understand what’s going on here: the federal government outsources the servicing and day-to-day operations of its entire student loan portfolio to a handful of private companies. And it pays them handsomely; one servicer, Nelnet, made more than $200 million in profits in 2016 alone. But there is virtually no oversight of these companies, and no accountability. It’s often up to individual states (usually via proactive attorney general offices) to try to protect borrowers, leading to a patchwork of enforcement actions that can sometimes get results (like we just saw in New York) but doesn’t always lead to systemwide change.

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How Bad are Parent PLUS Loans?

| Articles Income-Driven Repayment Student Loans 101

When I talk about being a student loan lawyer, most people assume that my clients are all about 22 years old, fresh out college, dealing with crippling student loan debt. That’s actually not true at all. A large number of my clients are older folks who took out a particular type of federal loan called a Parent PLUS loan, for the benefit of their children. And many of them are struggling.Read More

Student Loans and Wage Garnishment

| Articles Default Private Student Loans Student Loans 101

After years of working with student loan borrowers, I can safely say that one of my clients’ biggest fears is that lenders will garnish their wages – seizing money directly from their paychecks. This is particularly troubling for folks who are living paycheck to paycheck. Wage garnishment can represent a very real financial danger.

Is this a legitimate fear? Yes. Student loan wage garnishment can and does happen, all the time. But as with so many issues when it comes to student loan debt, it’s a bit more complicated than just a simple “yes” or “no” answer. A lender’s ability to garnish wages – and a borrower’s rights to limit or stop it – really depend on the type of student loan, its status, and the intersection of federal and state law.Read More

4 Reasons to Think Twice About Cosigning a Student Loan

| Articles Cosigners Default Private Student Loans Student Loans 101

Private student loans and federal student loans don’t have a lot in common, and one of the key differences is the role of cosigners. The vast majority of federal student loans don’t have a cosigner (the exception to that rule are spousal consolidation loans – which haven’t been issued in over a decade – and certain federal PLUS loans in rare circumstances). For private loans, however, cosigners are ubiquitous, and often required.

A lot of my clients over the years have been cosigners, and some of them didn’t fully understand what they were getting into when they agreed to cosign a student loan for their friend or family member. If they had, they could have avoided years of stress and financial trouble. If you’re thinking about cosigning for someone else’s student loan, make sure you understand the potential consequences – before you sign your name on that contract. 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

7 Ways to Lose a Student Loan Lawsuit

| Articles Default Private Student Loans Student Loans 101

Getting sued on a defaulted student loan can be overwhelming and terrifying. In my experience, most people who are brought to court by student loan debt collectors have never been sued before, so they don’t know what to expect. And dealing with debt collectors, attorneys, court personnel, and judges can be intimidating and embarrassing.

However, being sued does not mean all is lost. The initiation of a lawsuit is the beginning of a legal process, not the end. You have rights, and you may have some options. The lawsuit could end in any number of ways ranging from a dismissal of the case, to some sort of negotiated agreement, to a judgment against you. While no one (not even me) could tell you with any certainty what the final outcome of a student loan lawsuit may be, I can tell you that doing certain things may ensure that you lose.Read More

4 Avoidable Student Loan Forgiveness Mistakes

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

Student loan forgiveness is not a myth or a fairy tale. There are actual, legitimate programs that can provide partial or full forgiveness of your student loans – if the right conditions are met.

But it’s those conditions that often trip people up. A recent New York Times article provided real-world examples of student loan borrowers who thought they are on the path to loan forgiveness, only to find out later that they weren’t at all. I see this all the time in my practice, and it’s usually because people don’t fully understand the required criteria for student loan forgiveness programs (mostly due to the fact that these programs tend to be complicated, and student loan servicers do a pretty terrible job explaining them).

It’s important to take the time to understand these programs and determine whether or not you meet their requirements – because if you don’t, you may be in for some major disappointment later on. Here are the most common mistakes I see people make when it comes to student loan forgiveness. Read More

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