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
May 26, 2017 at 3:11 pmI 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
May 26, 2017 at 9:23 pmThanks for sharing your story!
dave says
May 27, 2017 at 4:39 pmThat 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
May 31, 2017 at 9:56 pmI 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
May 31, 2017 at 10:01 pmYour 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.
Theresa says
March 12, 2019 at 9:23 amWhat if forcing the spouse to sign the form pushes a more-or-less stable marriage toward divorce/separation? For instance, I am now more physically able to begin producing an income after back surgery, loss of a child, and on-going major set-backs. I contacted the U.S. Dept. of Ed., asking for Repay Plan in association to my income since it was my decision to go to school and I’m standing up for my choice. However, they’ve just now simply ignored the paperwork (request and filed household tax) because I couldn’t obtain his signature “in order to process [my] Income Driven Repayment Plan. This notice came in four days ago (03/08/19) with, “You have $775.48 due 03/26/19.” Like, how do we possibly bleed as turnips?
I just received $150, the first verified business income for this year! It just doesn’t make any sense that they can assume I have $3/4 grand to hand over to them, which is why I filed in the first place.
What kind of deal does my spouse’s signature have to do with MY income and MY repayment plan? It does not guarantee MY repayment plan request. Does it guarantee they have the right to go after HIS personal property and barrel right over the top of the student’s presence at hand?
Thank you,
T. Hill
Robert Farrington says
March 12, 2019 at 10:33 amTheresa – certain repayment plans (such as RePAYE) require your joint AGI for calculating your repayment plan amount. As such, your spouse signs the IDR form because he is attesting to the accuracy of his name, SSN, and income documents as well.
He doesn’t become part of your loan, and the government can’t go after him for your loan. This all simply has to do with his income and validation of it.
If you choose to go with another repayment plan, there are other options where you don’t have to include your spouse’s income: https://thecollegeinvestor.com/17807/the-math-behind-married-filing-separately-for-ibr-or-paye/
Katie says
September 5, 2017 at 8:40 amOk so I have an odd situation, I was given a check in 2007 that I did not request, I did not cash it after being told not to. I recently found that check in an old textbook and double checked my history and sure enough they charged me for the loan (even though it was never utilized) that particular loan (originally 666$) 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
September 5, 2017 at 9:50 amA 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
October 19, 2018 at 8:58 amI 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
October 19, 2018 at 9:02 amWhat type of loans are they? If they are private you might be able to negotiate, but if they are Federal, no.
Soraya says
November 1, 2018 at 7:41 amHere’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
November 1, 2018 at 9:13 amSounds 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
November 27, 2018 at 11:00 amLike 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
November 27, 2018 at 1:30 pmYour 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
December 15, 2018 at 1:45 amI 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
January 11, 2019 at 6:56 amI 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
January 11, 2019 at 1:18 pmSo, 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/
Marsha L Denton says
January 16, 2019 at 6:46 pmI am concerned and wonder if I need an Attorney.
In 1998, I took out a Pell Grant and loan for school.
Might have made some payments. Just not sure. Filed Bankruptcy in May 2002. To which I was told could not claim Student Loan on Bankruptcy.
Started a family and was staying at home for many years. I believe I filed a consolidation in 2005. Then placed in forbearance. To where I sat for many years.
When I did have work. Was making a payment of $20 a month. After this payment plan was done. The company sold my debt to another company. To which I could not afford the payment.
In 2015 ($6500) My federal taxes were taken because of Default. To find my taxes are going to be taken again this year. And they still want $5500. Should I consider Contacting an Attorney?
Robert Farrington says
January 17, 2019 at 9:16 amYou don’t need an attorney – that all sounds correct. You have to realize that over time, your loan keeps growing with interest, fees, and collection costs. That tax refund offset probably didn’t even lower your balance – it just went to collection costs and interest.
You need to get out of default and onto a repayment plan. A student loan debt attorney can help, but you can also do it yourself. Here’s an article about stopping offsets: https://thecollegeinvestor.com/20755/stopping-tax-offsets-due-student-loan-debt/
Robert bonanza says
January 23, 2019 at 7:36 amI signed Parent plus loans for my sons while still working. I am now retired with no income. I am 60 yrs old so no SS. I have put loans in FORBEARANCE several times accumulating additional interest that I cannot afford. I have contacted Student Loans requesting to settle this lian by waiving interest or reducing amount. However have been told not a possibility. I am willing to take 2nd mtg on home to do so. I dont understand how some Federal agencies (IRS) will negotiate but others like Federal Student Loan will not. Is there any possibility og negotiating a settlement? I would thing with the Student Loan debt the Gov has that some money wod be better than none. Please advise. Any suggestions wod be greatly appreciated.
Robert Farrington says
January 23, 2019 at 3:57 pmIt’s very rare to settle student loan debt because the money is owed to the US taxpayer, and it’s basically a lien against your income. You must have some income – how do you support yourself. Remember, if you go into default, you can see your Social Security garnished, tax refunds garnished, military retirement benefits, etc.
Here’s a guide to what they can do to settle student loan debt.
Here are the options for your parent PLUS loans: What To Do With Your Parent PLUS Loan. Continuing in forbearance is about the worst thing you can do short of default, so please take action.
Oscar says
February 5, 2019 at 1:06 pmIn 2017 I entered into a repayment plan with the department of education. The agreement I signed said I would pay 115 a month for 9 months on time and I would be out of default. I made all the payments on time and with bank statements as proof. As well as e mailed receipts from the department of education. I called to see why I never recieved the paper I need to sign to be out of default. They said that they needed my tax info again so I sent it now they said that the original agreement in invalid because they want me to pay 260 a month now and they told me all my past payments do not count and I have to start over again. I am a mechanic and I get paid flat rate which means if I’m not working on a car I’m not getting paid. One year I can make 60 thousand the next I can make 32 thousand a year. It’s never a for sure pay check. Do I have any legal standing here since I signed the agreement at 115 a month now they are telling me that it was not enough and the past payments do not count and I have to start over. Any info would be great
Robert Farrington says
February 5, 2019 at 9:35 pmIt doesn’t hurt to consult a lawyer about this, as you should have left the collection agency and resumed payments with your Federal loan servicer.
Lorrie Cline says
February 6, 2019 at 5:16 pmI began repayment of my student loans in 2010 when I consolidated under Direct Loans for the PSLF program, and had electronic debit in place so that I would NEVER miss a payment or pay late. In 2012 I requested a forbearance. They did not deduct payments from February 2012 until they resumed in July 2012. I have never been late, never missed a payment except for during this time of forbearance. I moved my loans over to FedLoan in November 2013 so they would start tracking my payments so there wouldn’t be any delay or issue when I hit 120 payments. FedLoan has calculated my qualifying payments and we have a difference of 16 payments. They are telling me that my previous lender (which I can’t get confirmation anywhere on who my previous lender was….) documented that my forbearance was only for Feb 2012-March 2012 and that I didn’t make payments in April-Jun 2012 and therefore was delinquent. They are saying that when my payments began again in July that from that point until I transferred to FedLoan in Nov 2013 every payment was payment for the month before and therefore none of them count. I am completely baffled by this as all of my payments are taken from my checking account. I don’t “pay them” they “take payment.” I have submitted my bank statements to them but they are sticking with there decision. I have been going crazy trying to contact my previous lender, which was through Direct Loans. Direct Loans is no longer in business so I am getting nowhere.
Robert Farrington says
February 7, 2019 at 1:28 pmHave you spoken to the student loan ombudsman? That would be your first course of action, then consider speaking to a lawyer.
Also, Direct Loans in a program, not a lender. Other than Perkins Loans, all other Federal Loans are Direct Loans.
Tony says
February 19, 2019 at 6:27 amI am an american living in europe and went to a university in Illinois.I was a permanent expat until the age of 19 when i decided to come back to the states and go to a university. After living in Chicago for 5 months I tried to trasnfer some credits from Europe to NIU but they did not recognize the school. But they did let me attend without asking for a high school diploma transcript or giving me a placement test. They also offered me a unsubsized Stafford loan which I accepted, and I have defaulted now for 22 years. I graduated, lived in the States for another 5 years and then left to go to Europe permanately again . I do not plan on coming back to the states.Can I get my loan dischaged on the fact that the order to benefit from the program I needed a high school diploma or equivelant which I did not have.
Robert Farrington says
February 19, 2019 at 10:52 amLikely no. But you can speak to a student loan attorney to verify,
Cynthia Boyer says
February 19, 2019 at 1:05 pmCan an attorney help at all getting a $230,000 loan reduced? It is not yet in default or collections. If there is absolutely no chance of that, will we need to get an attorney to pay the debt off completely (make sure paper work is legit and proper) so we will never hear from the blood-sucking government again. My husband was offered a free education due to loss of mfg. jobs after he started college classes using government loans. Why can’t this loan be the one they were willing to give him? His whole pension is being thrown out the window. He is 67.
Robert Farrington says
February 19, 2019 at 1:50 pmIf these are Federal loans there isn’t anything an attorney can really do for you that you can’t do yourself. All the programs are governed by law – and so they cannot reduce or forgive that loan outside of these programs. Also, student loans can rarely be discharged in bankruptcy.
Here’s a list of pretty much every way to get loan forgiveness: https://thecollegeinvestor.com/21541/different-ways-to-get-student-loan-forgiveness/
Vanessa says
February 21, 2019 at 3:43 pmI originally borrowed about $40,000. I paid for a while, but lost my job. Had to have surgery then could not find a job! When I gained full-time employment, I let AES know and was put on an income-based plan at $100/month. Last I checked, my balance was roughly $80,000 (several years ago). When the income-based status ended after a year, they sent me a statement asking for over $600/month. I called and told the lady I could not pay that; I had rent, a car payment, other bills. She said, “I don’t care.” She refused to work with me, so I continued to pay $100/month. Now my minimum payment is over $5,000! When I checked on a pay off to maybe get a loan at a lower interest rate, the balance is now over $91,000!! How is that possible?!? Can an attorney help me? I think they are federal loans…
Robert Farrington says
February 21, 2019 at 8:22 pmAn attorney can tell you your options, but they aren’t going to help you lower or eliminate the loan. The best thing you can do is get on an income-driven repayment plan, like IBR. These plans are capped at 10 or 15% of your discretionary income. You do have to re-certify your income annually or else you revert back to the standard plan. But otherwise, it should be affordable.
If you can’t afford the income-driven plan options, you need to look at other areas of your budget.
Vanessa says
March 10, 2019 at 12:44 pmThank you.
Karen says
February 23, 2019 at 3:46 amLong post:
Something in the back of my mind has been nagging me for a couple years. My husband and I made the egregious error of combining our undergrad loans many years ago during a time when that sounded like a good idea. This joint consolidated loan is now on an IBR plan at Navient. In December 2013 I got a much better paying job so in 2015 our minimum payment increased to reflect my new salary (numbers are based on 2014 earnings). The required amount was high, but manageable for us if we cut back on all other expenses.
So in the fall of 2016 when we applied for IBR for these consolidated loans and my husband’s grad school loan(s), we received notification they would continue on IBR. A few weeks later we received the letter stating the amount for the grad loan on IBR. Around the same time we received a letter saying our application for IBR on the consolidated loan was denied. Because of our income. The minimum went up by around $300 per month. It practically did us in financially! When I called Navient about it, I was informed that because the graduate loan application for IBR was received first and approved, the other set doesn’t qualify. What!?
In 2017 we applied for both again and both were approved, resulting in payments similar to 2015. Our income has barely fluctuated since 2014 (my first full year at the new income when I changed jobs). I have printed some documents from our Navient account including the 2 approval letters and the denial letter. I also printed account balance information which showed a balance increase of around $4000 sometime in early 2016. Was this a compounding of interest because the loan went off the IBR program? I couldn’t find other instances of compounding interest like that and I am confused! We are not only paying that extra $4000, but also interest in that amount , plus late fees that built up over that period, plus probably interest on those late fees.
I simply haven’t understood who to contact to look into this. With paying $1000 per month in these IBR plans which barely covers interest, we can’t afford a lawyer. Who should I be talking to? Our state’s attorney general’s office? Is there an ombudsman that would actually look into it? Certainly not Betsy Devos’s Department of “Education”!
Any helpful advice would be greatly appreciated.
Robert Farrington says
February 24, 2019 at 3:12 pmIt sounds like you have a spousal consolidation loan, which is one of the worst loans you can have sadly. Luckily you and your husband are still together, which makes things easier.
I guess I don’t know what your actual question is. Under IBR, you might not be making large enough payments to cover the interest, which does add to the loan balance. So, what you’re saying is not unheard of. However, if you continue under IBR, your loans may be forgiven.
If your income increased and you changed repayment plans back to the standard 10-year plan, then your interest re-capitalizes at that point in time to calculate your remaining payments.
It sounds like you have decent income and large loan balances. You really might actually benefit the most from speaking to a financial planner that is experienced in student loan debt.
JJ says
February 28, 2019 at 1:28 pmI defaulted on $12,000 in Federal student loans back in 1987. The amount owed is now up to $58,000 and a private law firm is trying to collect the debt. The firm has sued me in District Court and is subpoenaing my bank and credit card records. I make less than $30 grand a year. My wife makes substantially more. Can her wages be garnished, too?
Also, we just received our full tax refund. Is that because we filed jointly?
Robert Farrington says
February 28, 2019 at 1:33 pmIf you’re being sued, you need to retain an attorney to help you ASAP. There are specific deadlines in court and by not responding timely, you’ll automatically lose. Get an attorney!
Jen S. says
March 19, 2019 at 12:18 pmI have over $190,000 in Private student loan debt and another $170,000 in federal. My federal loans are fine. I have an attorney in NY for my private loans that has been zero help since getting the retainer and flat fee. I tried to get proof of ownership on the debt but Navient and NCT have refused to send. I was told fr the attorney to collect that info that I would have to go to litigation. As a result I was advised that Navient and NCT would not work with me until I defaulted on the loans. I am now looking for an attorney in VA but have been unable to locate one. The one and only person who has experience moved to FL and is not taking on VA cases. I’m not far from DC but can’t find an attorney there either. Any other suggestions for finding an attorney. I have used all the links on this article and so far am at a loss.
Robert Farrington says
March 19, 2019 at 2:16 pmI guess I’m at a loss on why you need an attorney for your loans? It sounds like you borrowed the money and don’t have any other issues? Help me understand.
Jen S. says
March 21, 2019 at 6:16 amIn 2014 National Collegiate Trust served me with a court summons for loans I was unaware were even due (Later found out the loans changed hands 6 different times). As a result of the suit I was advised to work with Rubin & Rothman to set up payment arrangements. Before doing so I requested debt validation. I received copies of paperwork, some of which was not mine. I signed a payment contract with Rubin & Rothman for the loans they verified were mine. In May of 2015 I moved to VA from NY. I was continuing to make my payments until Sept 2015 when my payments were declined. When I asked why they were not taking my payments I was told it was because I had moved to VA and they were no longer assigned the file. Mind you they had been taking my payments for the last 5 months while I was in VA. When I asked who the new servicer was they couldn’t tell me. In fact they refused to give me any additional information about my case/file. As a proactive I consulted with an student loan attorney based in NYC who specializes in student loans. As of 3/15/19, they have been unable to locate where these loans went, almost $60,000 just for NCT. When I asked about getting these loans dismissed for breach of contract I was told that would take too much time and money so to just let it be. When I inquired about the statue of limitations (SOL) I was told that the loans will almost never pass the 10yr SOL in NY and that SOL is tricky. Since I am a VA resident I am subject to the VA SOL, not NY.
As for the $130,000 private loans with Navient, I was having difficulty getting them to work with me on a payment. The lowest payment they were offering was $2,700 a month. I clearly could not pay that. At the same time I hired the attorney above to find my NCT loans I also hired them to negotiate reasonable payments. About 1.5 years ago I was told by the attorney that in order to negotiate payment I had to let the loans default. And so we did. Despite having representation I am still being harassed daily, both at work (phone calls) and home (phone calls and letters) regarding these loans. Again, something the attorney in NY is not interested in pursuing. To this date they still have not been able to settle on a reasonable payment plan. They were told at the beginning That could not pay a lump sum and it is stated in my retainer to negotiate a monthly payment. However, the only offers they bring forward are lump sum settlements. In 2020 the loans should be past the SOL in VA and I would like to discuss that with an attorney familiar with VA law and student loans to ensure I know my rights and options. I prefer not being sued for debts I either cant find or are trying to make reasonable payment options for.
April Cummins says
March 25, 2019 at 2:23 amI’ve had my student loans since 1995. My problem now is; 2 things I cashed in directly at the lottery due to the amount was $1000 and they kept it back in 2013 and since 2013 they have kept my tax returns totaling $7000. But I call IRS and they have no idea whom has it because the money is not being credited to my student loans. There telling me I still owe over $16,000. How? Where’s my tax returns? Where did that $1000 go? Now they want to garnish my wages. I need help.
Robert Farrington says
March 25, 2019 at 9:55 amThat money went to fees and accrued interest. Rarely does your tax return and other garnishments ever get to your loan principal. And even then, you are letting your loans grow and grow all year with more penalties, interest, and fees.
You need to get out of default: How To Get Out Of Student Loan Default.
Tamra Lucas says
April 9, 2019 at 10:25 amI receive SSDA Social Security. Two years ago I was contacted by Nelnet because my loans were in default, I’m in debt 10,000.00. I explained to them I was on disability so of course the sent me a ton of paperwork. Next thing, they took over 300.00 dollars from my SSDA check..I was completely upset since I had no notice. I went to the local SS office they said the federal government can do whatever they want and nothing I could do. After filling out a ton of paperwork they finally reimbursed me. Anyway, here I go again..I’m being told they will be deducting payment again. Since I’m on a three year evaluation period through SSDA, Nelnet say I’m still able to work…even though I’ve been on SS for 5 years now. How do I fight this? I’m disabled and not able to work…I get only so much money a month, since I get over 1,200.00 a month I’m over the poverty line. I need some advise. Thank you
Robert Farrington says
April 9, 2019 at 10:29 amThey can garnish your Social Security unless you get your loans discharged. If you’re permanently disabled, read this: https://thecollegeinvestor.com/22781/student-loan-disability-discharge/
Tamra Lucas says
April 12, 2019 at 10:17 amJust curious, who made it legal to garnish disability funds from the disabled? And how can I change a 3 year evaluation to a 5 year? I called my local SS office and she was rude so didn’t understand what process I need to take to change the evaluation length of time.
Robert Farrington says
April 12, 2019 at 10:24 amCongress made it legal to garnish any government payment you receive without a court order. Remember, a student loan’s collateral is your earnings. Compare it to a car loan – you don’t pay your car loan, you get your car repo’d. Sadly, the same rules apply to your student loan – you don’t pay, they garnish your income.
Anyway, read this about disability discharge. There’s some smart comments about how to go about getting your evaluation period changed: Guide To Student Loan Disability Discharge.
Tamra Lucas says
April 12, 2019 at 3:06 pmThank you for responding so quickly. I appreciate all your help. Just so you know I did pay on my loans until I was disabled, so I’m not trying to get out of my obligations at all. It’s hard when your living on a fixed income and barely getting by. My husband passed away two years ago since then I income has drastically been reduced. Anyway, again Thank you and I will continue my quest 😊.