When you're struggling with student loan debt, it can sometimes be hard to know where to go to find help. While you can do most things with your Federal student loans for free on StudentLoans.gov, many borrowers opt to find "professional help". And while there are services that can help you with your student loan debt, how do you know when that's not enough? How do you know when you might need a lawyer for your student loan debt?
The fact is, most issues with your student loan debt doesn't require the services of a lawyer. For many things, such as changing your repayment plan or applying for student loan forgiveness programs, you can fill out the paperwork or online form yourself.
However, there are scenarios where it can be very beneficial to pay a lawyer for help with your student loans. For example, what if your lender is suing you because you defaults? That's a situation where you definitely want professional legal help.
Here are some other scenarios where you might consider a lawyer for your student loan debt. Plus, we answer some common questions with the help of a real student loan debt lawyer.
The Difference Between An Attorney And Other Student Loan Debt Assistance
First off, it's important to distinguish between paid help for your student loan debt, and legal help for your student loan debt. Many borrowers who need help fall into the first category - they are just looking for professional advice for their student loan situation.
And there are companies that you can pay to help you with this. Just make sure that you fully understand what you're paying for. When hiring for any professional service that has to do with your finances, you want to be clear about what's expected, what the payment is, and follow up to ensure everything is done correctly.
If you do pay for help, do your research to avoid student loan scams. Sadly, there are a lot of companies the prey on borrowers seeking help for their student loans, so make sure you're not taken advantage of. Here is a guide we wrote to determine if a student loan assistance company is a scam, and big red flags to look for.
If you need more than just assistance determining your repayment plan, you might need legal assistance. Let's look at when legal assistance might make sense.
When Does It Make Sense To Find A Lawyer For Your Student Loan Problem?
It's important to remember that every situation is different, and whether you contact a student loan lawyer really depends on your unique situation.
According to Adam Minsky, an experienced student loan lawyer, finding representation could be helpful in the following situations:
- If you're dealing with a difficult or complex issue like a dispute with a loan servicer, or you’re being harassed by a debt collection agency.
- If you've been sued in court and want legal advice and representation.
- If you're not sure of your options or legal rights regarding a particular student loan issue, such as eligibility for a student loan repayment or forgiveness program, or what your options and strategy might be regarding a defaulted student loan.
- If you're feeling overwhelmed by a student loan issue and want some guidance to make sense of it all.
A good rule of thumb to follow is asking yourself whether you can do it yourself, or do you feel you need an advocate to work on your behalf to resolve the issue.
What Can A Lawyer Help With Your Student Loans?
So, now that you know when it might make sense to speak to a lawyer, what can a lawyer actually do for you that you can't do yourself?
First, according to Adam Minsky, it's important to remember how attorneys are different that student loan assistance companies. Attorneys are a regulated profession, overseen by state licensing boards (called the "bar") and held to strict rules about confidentiality and obligations to serve their clients. In other words, attorneys are accountable not just to you, but also to their state bar. This provides you with a lot of protections and recourse if you get mistreated or defrauded, as compared to unlicensed companies and organizations.
On the other hand, some non-attorney consulting companies may be able to provide some generalized assistance, especially when it comes to standardized forms and applications for the most popular federal student loan programs. But they may not always be equipped to understand the nuances of the student loan system, troubleshoot a situation when there’s an error or unexpected problem, or advise their clients appropriately when there are unique circumstances. Consulting companies also are much more limited in terms of what they can do for borrowers who are in collections or are being sued, since it is a crime for non-attorneys to engage in the practice of law.
According to Adam Minsky, a lawyer will typically help with the following when it comes to student loan debt:
- Advice and counsel regarding your legal rights and options for your student loans.
- Direct representation and advocacy in communications with student loan lenders, servicers, debt collection agencies, credit bureaus, dispute bodies, and other relevant entities.
- Negotiations with student loan lenders, servicers, and debt collection agencies to obtain a desired resolution.
- Assistance in the preparation, completion, and review of student loan-related documentation such as program applications, letters and correspondence, and contractual agreements (such as student loan rehabilitation or settlement agreements).
- Representation in court to defend you against a student loan collections lawsuit or to pursue companies that have harmed you.
How Much Does It Cost?
This can be the scariest part of potentially working with a lawyer for student loan borrowers. How much are you going to have to pay and is it worth it? Given that student loan borrowers are already in debt, many feel that paying a lawyer for help simply doesn't make sense.
However, it's important for borrowers to know that there are a variety of fee structures and ways to pay a lawyer so that it can make financial sense.
According to Adam Minsky, there are four basic fee structures for working with a lawyer.
1. Consultation Fee: You might be able to pay an attorney for a limited session to obtain advice or counsel, or to get assistance with a specific issue (such as reviewing a settlement agreement or looking over a credit report). The fee would depend on the location, length of the consultation, and the attorney’s pricing.
2. Hourly Fee / Retainer: This is the most traditional type of attorney-client fee arrangement and involves paying for the attorney’s time at that attorney’s hourly rate. The client usually pays an initial “retainer” – also known as an advance fee deposit – to cover a certain amount of billable time up front (say $5,000 or $10,000). The attorney then draws from that retainer as he or she completes the relevant asks. If the retainer doesn’t get used up when the matter is completed, the balance gets returned to the client. If the retainer gets depleted, the client may have to replenish the retainer. The size of the retainer and the number of billable hours for a case really depends. For example, defending a collections lawsuit may take significantly more billable hours than assisting with a loan consolidation application.
3. Flat Fee: Some attorneys provide specific services for a set fee, no matter how long it takes the attorney to complete the service. This is also known as project-based work. This can provide some protections for the client, so that if something takes longer than expected, the client isn’t on the hook for additional fees. But the fee would likely only cover a specific task or set of tasks that the attorney has been hired to perform. A good example of this might be completing an income-driven repayment application.
4. Contingency: For certain types of cases, a lawyer may be able to take a case on a contingency fee basis – where he or she only takes a fee if they prevails in a case through a judgment or a settlement. A contingency fee arrangement is only available for specific types of cases, such as consumer rights lawsuits against third-party debt collectors or other similar companies for violations of specific laws. Often, those are laws that allow for something called “fee shifting,” where the losing side is legally required pay for the winner’s attorneys fees. An attorney is only going to take a case on a contingency fee basis if there is a solid claim under one of these laws and he or she believes that there is a strong likelihood of succeeding in court.
How Can You Find A Reputable Student Loan Debt Attorney?
So, if you think getting a lawyer is the best route for your student loan situation, how do you go about finding a reputable one? This can be especially challenging given that many borrowers aren't familiar with the law and how the process works.
Furthermore, there are sadly so few lawyers that are experienced in student loan law. Minsky recommends that borrowers looking for a lawyer for their student loan debt do the following:
- Check the directory for the National Association of Consumer Advocates (NACA). NACA is a bar association for attorneys who only represent consumers and borrowers, and you can search for local attorneys who have listed “student loans” as an area of practice.
- Contact your state bar association for a referral (many state bar associations have referral services).
- Search for attorneys on a platform like Avvo, which has attorney profiles. Avvo also provides a record of client reviews and peer endorsements, which can be helpful in selecting an attorney.
- Once you find an attorney you might want to work with, cross-reference the attorney with your state bar association to see if that attorney has any record of public discipline.
- Do a Google Search of that attorney to see if their name comes up in a good way (for example, through press or publications) or in a bad way (such as being sued by a government agency or regulatory body for misconduct).
Final Thoughts
Dealing with a difficult student loan situation can be tough. It's not only financially draining, but it can be extremely hard emotionally.
If you find yourself wanting professional help for your student loan debt, make sure you consider whether a lawyer is the right choice. Depending on your situation, it can make a lot of sense to seek out a lawyer for your student loan debt.
Have you ever received help from an attorney for your student loan debt?
Tony Quart says
I personally have been sued by a collection agency back at 2010 because of my student loan. They have even called me numerous times within a month before it. I talked to my father about this matter and then he brought me to Lemberg law to consult about this. The lawyer then helped me through all the court process until I won the lawsuit. I think we really need a help from lawyer or attorney to do these legal actions. Don’t let your student loans make your life uncomfortable.
Robert Farrington says
Thanks for sharing your story!
dave says
That was an interesting post. It is the first time that I have ever read about having to retain an attorney because of student loans. The current student loan situation in our county has gotten out of control. It is bad enough having to pay back a high student loan balance, but now it could be worse if you have to retain an attorney if are sued by the lender.
Uma Kelleher says
I was in the loan Forgiveness program back in 2015 to 2016. Now they send me to renew contact every year. And they want my husband signature too. And he not event on the laon with me. And I think is unfair to the spouse. My ex boss and my ex coworkers , told me that they never goes on the Forgiveness program. And they never let it brother them”.
I’m not sure, they make as a home or not. It’s bother me when I have no job now.
I’m so depress, don’t know what to do next.
Robert Farrington says
Your spouse signing the form doesn’t mean anything except that he acknowledges that your joint income is going to be considered unless you are separated from your spouse or you’re unable to reasonably access your spouse’s income information.
Katie says
Ok so I have an odd situation, I was given a check in 2007 that I did not request, I did not cash it after being told not to. I recently found that check in an old textbook and double checked my history and sure enough they charged me for the loan (even though it was never utilized) that particular loan (originally 666$) has now been consolidated into a much larger loan of 67,000. Accruing 7% interest. I am ahead on payments, never defaulted. And sadly everyone with law experience doesn’t even know what to tell me. Any advice would be greatly appreciated! I would think a lawyer would be the way to go but where I live I can’t seen toe find anyone with experience to tell me if it’s worth fighting.
Robert Farrington says
A lawyer with student loan debt experience is what you need. Look at the links at the bottom of the article and get connected with one in your state. Sadly, there aren’t many nationwide.
Hallie says
I took out loans as a student, about $34,000. This was about 14 years ago. I lack one credit hour of getting my bachelor’s. After college, I was unable to pay on the loans–I couldn’t find a job for a while and when I did find a permanent job, it was as a waitress. I wasn’t making much money, just enough to keep myself fed and pay the rent and the essential bills. I even rode a bike everywhere and took public transportation because I couldn’t afford a car or insurance. No medical coverage, either, because I couldn’t afford it. Needless to say, I got scared of those loans and I ran from them for years. I admit I was in the wrong, both for taking out so much and for running from them. Now, they are coming after me for about $72,000. Is there any way I can go about getting the interest and the penalties knocked off of this so I can just pay down the original amount? I’m willing to pay down on the original amount but $72,000 is too much!
Robert Farrington says
What type of loans are they? If they are private you might be able to negotiate, but if they are Federal, no.
Soraya says
Here’s my situation. I defaulted on my loan, it was sent to collections. It hit my credit.. I was then no longer dealing w/the college itself. I dealt w/the agency. I was set up on a payment plan, and after a couple of years of paying this agency (being in “good standings”), my case was reviewed at court /with a judge as it was “up for re-newal”. After noticing my auto-deductions stopped, I contacted the collection agency, and was told that my case had been dismissed; I was explained I no longer needed to make payments (hence the stoppage of the auto-deductions) . That was about a year ago. Recently (a week ago) I received an email from the school saying I don’t only owe them a balance, but that I was past due! (what is also questionable to me is, that when I called the school & they verified my info – I updated them w/my demographics (which collections had, had). I questioned where the balance came from, since that per collections, the amount owed had been dismssed. They advised that all they know is that, they hadn’t received any payments from me since 2017. I confirmed that is correc – I was TOLD NOT I NO LONGER HAD TO PAY. When I spoke to “my” loan officer (from the school ) She admitted to “dropping the ball” as they should’ve contacted me (14 months ago…) She described that she “reviewed” my case and it showed CLOSE, however she also stated it had it been “closed in error”. Per her contact from the same collection agency, the loan was closed ( but not dismissed?). * I am getting conflicting stories!* I called the collections again, and was advised the school should NOT be billing me. However I was also told that the amount they have (noted in their system) and the amount the school is asking for are not the same. * THINGS AREN’T MATCHING UP * YES, this is a private loan. * Should legal assistance is sought out? * THANK YOU
Robert Farrington says
Sounds like consulting a lawyer would make a lot of sense here – at least for you to figure out what happened and what your options are.
Morgan says
Like a previous post, my original loan amount was $34,000. That was in 1997. Now the amount is $77,000. I haven’t been very successful on getting a decent paying job, They said I will have to pay the full amount, and can’t forgive the interest accrued.
Anyway, I’m now on the income driven forgiveness program, which started in 2009. I am being told that my program started when I consolidated my loans in 2016, not 2009, or my original time, 1997? Is this true?
Robert Farrington says
Your forgiveness timeline started when you started your payment plan, which would have been when you consolidated (because the consolidation loan is a brand new loan).
The good thing is, if you stick with that plan, your balance is forgiven after 25 years. Not great, but at least it’s something.
Larry Taylor says
I have an Navient loan that keeps growing even when I make their regular scheduled payments. They won’t give a good explanation. I’m thinking about making the minimum payment to keep from going into default and that’s it. It’s a lot cheaper than what I was paying.
Jeannine says
I have a Navient student loan from attending the Art Institute which had a December 13, 2018 Lawsuit ruling for “defense to repayment discharge ruling”. I would like to get my student loan discharged according to this ruling. I don’t know if I should seek legal assistance or fill out the Public Service Loan Forgiveness forms myself, and I am not sure what the difference is between the student loan being discharged or forgiven. Also my Mother said that if the loan is forgiven that I might have to pay taxes on it, and that the interest may not be forgiven.
Robert Farrington says
So, you go about this two ways.
You first apply for Borrower Defense To Repayment. Here you go: https://thecollegeinvestor.com/18752/understanding-borrower-defense-repayment/
Second, that can take a year! Until then, you need to take action on your loans and make sure you’re making payments. Also, if you’re eligible for PSLF, I suggest you apply as well. If your Borrower Defense claim is denied, you’ll want to have the PSLF option already going.
And yes, some discharges are considered taxable (including Borrower Defense). PSLF is tax free. Learn more here: https://thecollegeinvestor.com/16568/taxes-and-student-loan-forgiveness/