When you’ve got student loan problems, there are lots of choices to be made. From repayment options to dealing with private lenders, you’re facing a dizzying list of tasks to accomplish.
Luckily, you’ve also got a number of places you can turn to as resources. As the amount of education debt has skyrocketed over the past decade, more companies have begun offering services to help borrowers.
Before deciding how to tackle the problem, look into your needs and which solution is the best fit. Here are four ways to get help for your student loan debt.
When it comes to federal student loans, the web is your best starting point for information and procedures. The U.S. Department of Education maintains an excellent web resource, as does the Consumer Financial Protection Bureau.
Other sites such as FinAid, and podcasts dealing with student loan issues, are useful for the depth of information they provide. Beyond that, there are some excellent books you can pick up to gain an understanding of your choices.
These do-it-yourself resources are excellent if you’re dealing only with federal student loans and are comfortable with solving your problem. For issues concerning private student loans or getting your federal loans out of default, you’re likely going to need the analysis that only a seasoned professional can provide.
For-Profit Student Loan Counselors
By far, the most visible resource is the for-profit company offering to help get you out of default and into a loan forgiveness program. Hint: just because they are visible doesn't mean it's a good thing...
These companies, often with slick websites and vaguely official names, shuttle borrowers into federal student loan consolidation and one of the many income dependent repayment options. They thrive on providing little if any information and charge unnecessary fees for completing forms that are readily available from the U.S. Department of Education at no cost.
Lately, for-profit student loan counselors have started telling borrowers that they can get their private loans wiped out based on nebulous claims of fraud and misrepresentation. Though many private loans suffer from the same lack of proper documentation and robo-signing that plagued the mortgage industry during the Great Recession, the argument is one that’s best brought up in the context of a lawsuit - something a counselor can’t legally handle on your behalf.
Many of these companies have been sued by the government for defrauding borrowers. In two high profile cases, the CFPB and Florida’s Attorney General shut down student loan debt relief company College Education Services and, separately, filed a lawsuit against Student Loan Processing US for running illegal debt relief services that, “exploited vulnerable student loan borrowers, made false promises about their debt relief services, and charged illegal upfront fees.”
The CFPB, in a letter dated June 22, 2015, alerted Google that, “student debt relief scammers may be targeting student loan borrowers through the company’s search products.” The government watchdog urged the search giant to, “work closely with federal and state agencies to ensure your search products are not being used by individuals and companies seeking to prey on the most vulnerable student loan borrowers by implying an affiliation with the federal government.”
For that reason, you should be very wary of hiring a private company or you may end up being scammed out of your hard-earned money.
Financial Planners And Coaches
Over the last few years, many financial planners (see: accredited by the CFP board or similar) have taken a speciality in student loan debt. In fact, there is even a new certification called the CSLP - Certified Student Loan Professional. If you're going to look at a financial planner, make sure they fully understand student loans and work as a fiduciary for you.
Financial coaches are people who may or may not have any formal training in helping you with your student loans, but offer insights on budgeting and money management. Some financial coaches may also have a working knowledge of student loan matters. Robert shares a great list of student loan coaches in this Forbes article.
Though most financial coaches aren’t lawyers, the right one may be able to help you work through your problem from the angle of better money management. They won’t be able to represent you in court, but the right financial coach may be able to provide valuable insights into ways to keep your student loans on track.
Student Loan Lawyers
The field of student loan law is relatively new, with attorneys incorporating not only a knowledge of federal regulations but also debt collection, credit reporting, and bankruptcy issues. Though some attorneys limit their practice solely to one type of student loan issue, the most skilled will be able to look at your situation from all angles to be able to advise you in the most complete manner possible.
There are 5 major reasons for you to work with a student loan lawyer.
A complete analysis of all loans - not just Federal ones. A student loan lawyer can fully analyze your federal and private loans to advise you of the best way to minimize your payments or get out of default. With so many programs available, it can be difficult to make those determinations on your own.
Review collector behaviors. A student loan lawyer can help determine whether you have a reason to file a lawsuit against a collector for violation of federal or state debt collection laws. The rules that govern debt collection are complicated, and collectors who run afoul of the law can be forced to pay you money damages as well as cover the costs of your lawyer.
Ensure proper credit reporting. There are also federal and state laws governing how a creditor or collector can report your debts to the credit reporting agencies. As with debt collection laws, those who violate these laws can be forced to pay you money damages as well as your legal fees.
Defend student loan lawsuits. The stakes go up when a student loan company files a lawsuit against you, so it’s important to have the specialized guidance that only a student loan lawyer can provide. If you don’t defend the case - or worse, miss important legal arguments - you’ll have to deal with a judgment against you and consequences that may include wage garnishment and liens on your property.
An attorney who understands the unique world of student loans can give you the edge you need. Issues such as the relevant statute of limitations, proof of chain of ownership of the loan, and proper accounting can help tip the odds of a favorable result in your favor.
You’re allowed to represent yourself in court, or you can hire a lawyer to do it for you. In some states, you can hire an attorney in a more limited role and have the freedom to represent yourself while also having the benefit of legal advice.
Consider whether bankruptcy is an option. Though your ability to wipe out your student loans in bankruptcy are limited, it’s not impossible. Even if you aren’t a candidate for a discharge, bankruptcy may help you restructure your student loans, discharge other debts that hamper your ability to make payments, or to simply give you some breathing room...
Finally, some loans that look like student loans may not be considered educational debts under the bankruptcy laws at all. In those situations, getting out from under your student loan obligations may be a relatively simple process.
A student loan lawyer with experience in bankruptcy can help you decide whether this may be a way to relieve some of the financial pressure. In addition, only a lawyer can properly advise you about your eligibility to file for bankruptcy, whether you’ll be able to keep your belongings, and the impact a filing will have on your life after the case is over.
Protect Yourself By Making The Right Choice
As you can see, you’ve got a lot of choices when it comes to getting help with your student loan problems. By understanding the benefits and risks associated with each one, you’ll be able to make the best decision so you can protect yourself and your financial position.
Have you ever considered seeing a lawyer about your student loans? Ask your questions about it below!
Jay S. Fleischman is a student loan lawyer who consults with borrowers nationwide. He is a nationally recognized speaker on the subject of student loans as well as the host of The Student Loan Show, a weekly podcast providing news and information about managing your educational debt.
Editor: Robert Farrington