During the past few months, I have seen a fairly rapid increase in new collections lawsuits being filed against student loan borrowers in Massachusetts for defaulted student loans that were previously held by Sallie Mae and/or Navient. This is noteworthy because in my experience, these loans had been predominantly placed with non-attorney third-party debt collection agencies, or out-of-state collection law firms that rarely filed suit. This is a major shift.Read More
7 Ways to Lose a Student Loan Lawsuit
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
Student Loan Law End-of-Year Review
Well, 2017 has been quite an explosive year, hasn’t it? And there’s been a lot going on in the world of student loan law – so much, in fact, that it can be a bit overwhelming to keep everything straight. So as we wrap up this year, here’s an overview of what went down for student loan borrowers, and some hints of what’s to come in 2018.Read More
BREAKING: Major Changes Proposed for IBR and Loan Forgiveness
News outlets are reporting that the House GOP has drafted legislation that could reshape the entire federal student loan system.
The bill is called the “Promoting Real Opportunity, Success and Prosperity Through Education Reform Act,” or the “PROSPER Act.” The full text of the proposed bill has not yet been released, but an outline of the proposal was released to the media. Here’s what we know (and what we don’t know):Read More
BREAKING: Tax Bill Targets Student Loan Borrowers
Late this week, the House GOP unveiled its much-anticipated tax reform bill. The bill makes a lot of reforms to the tax code for both individual and corporate taxpayers. There are some major changes proposed for student loan borrowers.
First, the bill eliminates the student loan interest deduction. Currently, individuals earning an income of up to $80,000 per year (or $160,000 for married couples filing jointly) can deduct up to $2,500 per year in interest paid on their student loans, although the benefit begins to get phased out once an individual hits $65,000 per year in income. There are over 44 million student loan borrowers in the United States, and an estimated 12 million of them claim this deduction. Read More
4 Avoidable Student Loan Forgiveness Mistakes
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
Two Major Student Loan Servicers to Merge
BREAKING NEWS – Two of the largest student loan servicers in the country have just announced a merger. Nelnet will be purchasing Great Lakes Higher Education for $150 million.
Currently, the U.S. Dept. of Education contracts out servicing operations to four primary companies: Nelnet, Great Lakes, FedLoan Servicing (part of the Pennsylvania Higher Education Assistance Authority, or PHEAA) and Navient. These servicers also manage private loans on top of their federal student loan portfolios. Assuming the merger is approved, the combined Nelnet-Great Lakes entity would become the largest student loan servicer in the country.
What is fascinating about this – and, arguably, quite troubling – is that while student loan servicing remains atrocious, Great Lakes generally has the fewest customer complaints of the four major U.S. Dept. of Education servicing companies. Great Lakes is also the only nonprofit servicer of the four. If this merger is approved, Great Lakes will effectively cease to exist, as it will become part of Nelnet. That will leave only three major servicing companies handling Direct federal student loans, two of which are currently subject to major lawsuits for systematic servicing problems (Navient and FedLoan Servicing/PHEAA). Read More
Adam S. Minsky Named “Super Lawyer” and Top Blogger Finalist
For the third consecutive year, Attorney Adam S. Minsky has been named a Massachusetts Super Lawyer “Rising Star” in recognition of his work helping student loan borrowers. This distinction is only awarded to the top 2.5% of attorneys in Massachusetts, and reflects Attorney Minsky’s unique expertise and dedication to consumer rights. Attorney Minsky’s award will be published in Super Lawyers magazine and Boston magazine.
In addition, Attorney Minsky’s student loan law blog was named a finalist for the 8th Annual Plutus Awards. The annual Plutus Awards celebrate the best in financial media. This year, the ceremony will be presented live at the FinCon Expo in Dallas, Texas, on October 28. The Plutus Awards were founded by Harlan Landes and are supported by the Plutus Foundation, a nonprofit organization that provides grant money to support opportunities for the financial media to create, develop, and administer community-based programs that enhance financial literacy, education, and empowerment.
5 Steps to Start Tackling Your Student Loans
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
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
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