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?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
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!
Amalia Denesha says
I need to retain a Lawyer because my 28 year old student loan which I owed only $5,000 is now $9,000. I been harassed at work and my co worker also know about it. My boss even talked to the agency but no avail. So they been garnishing my pay by 15% according to the law. And that’s never enough so they garnish my other wages too from another job. So they’re getting 30% instead of 15%. They took my federal income tax this year. It’s about $3,000. So I really need a good reputable lawyer at this. I had enough of them.
Amalia Denesha
Robert Farrington says
You don’t need a lawyer – you need to get out of default. These garnishments and the tax refund aren’t likely even going towards your loan but rather to collection fees and accrued interest. Read this article and take action to get out of default: How To Get Out Of Student Loan Default.
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.
Theresa says
What 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 $3/4 grand to hand over to them, which is why I filed in the first place.
What kind of deal does my spouse’s signature have to do with MY income and MY repayment plan? It does not guarantee MY repayment plan request. Does it guarantee they have the right to go after HIS personal property and barrel right over the top of the student’s presence at hand?
Thank you,
T. Hill
Robert Farrington says
Theresa – certain repayment plans (such as RePAYE) require your joint AGI for calculating your repayment plan amount. As such, your spouse signs the IDR form because he is attesting to the accuracy of his name, SSN, and income documents as well.
He doesn’t become part of your loan, and the government can’t go after him for your loan. This all simply has to do with his income and validation of it.
If you choose to go with another repayment plan, there are other options where you don’t have to include your spouse’s income: https://thecollegeinvestor.com/17807/the-math-behind-married-filing-separately-for-ibr-or-paye/
Katie says
Ok so I have an odd situation, I was given a check in 2007 that I did not request, I did not cash it after being told not to. I recently found that check in an old textbook and double checked my history and sure enough they charged me for the loan (even though it was never utilized) that particular loan (originally 666$) 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/
Marsha L Denton says
I 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
You 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
I 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
It’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
In 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
It 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
I 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
Have 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
I 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
Likely no. But you can speak to a student loan attorney to verify,
Cynthia Boyer says
Can 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
If 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
I 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
An 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
Thank you.
Karen says
Long 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
It 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
I 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
If 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
I 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
I 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
In 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
I’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
That 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
I 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
They 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
Just 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
Congress 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.
Michele R says
Hi. I’m unable to find the “smart comments” you’re referring to, above, RE: how to go about getting your evaluation period changed. I really need to get my evaluation period changed from 3 years to the 5-7 year range. A social security disability attorney told me that there is no way to do that. But, you’re saying there is? I’d really appreciate it if you could reply how I can go about doing this. Thank you in advance
Robert Farrington says
Check the comments on this post (sorry, it’s the article I thought the comment was for): https://thecollegeinvestor.com/22781/student-loan-disability-discharge/
Michele R says
Hi Robert – Thanks for replying. I can tell that you really enjoy helping people. But, once again, I can’t find the comment and/or reply from you RE: the changing of the SSA award medical review range from 3 yrs to the 5-7 yr range. Can I ask you to please just provide the answer for me, HERE? I’m learning disabled and not very fast or tech savvy, Also, there’s 68 responses here. Without guidance as to the general vicinity of where to find the answer, I could be looking all day. So, once again, can you please just reply with the answer, here? It was from your own page so I don’t think it will take up a lot of your time. Thanks again
Robert Farrington says
If your SSI or SSDI medical review is only once every 5 or 7 years, ask the Social Security Administration for a SSA Benefits Planning Query (BPQY, form 2459). If you call 1-888-303-7818 (disability discharge office) and ask to be emailed the forms, there’s a “tip on applying” pdf they send along with the main application. They also send another OPTIONAL attachment/form for signing rights to a representative of your choice to file on your behalf. You don’t worry about that unless you want a proxy.
Short answer: ask SSA for a “BPQY”. They will know what you mean.
Tamra Lucas says
Thank 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 ?.
Hope G says
I made the mistake of consolidating student loans with my spouse and we are now divorced. 12 years ago the judge ordered 16k of the student loans to me and the rest to him, the balance was 84K, he is a surgeon. The loan has been sold twice and as you know lenders don’t care about judges orders. Also, I have evidence of the lender violating the master promissory note. They repeatedly gave him forbearances due to hardship without my knowledge or approval. We are supposed to be in agreement of any changes. He was a practicing surgeon at the time and had no hardship. This added years and interest to the loan. When the loans were sold he hid where they were from me. I moved out without anything because he was abusive. I will be financially tied to him until 2037 if I don’t find a way to get them separated. He won’t agree to anything. He uses this to control me. Please tell me I have options. He is a severe drug addict and I’m concerned if he overdoses I will be responsible for his med school loans which I cannot afford. Please advise.
Robert Farrington says
Spousal student loans are the worst, for exactly the reason you describe. We break it down here: https://thecollegeinvestor.com/20997/spousal-student-loan-consolidation/
At this point, I’d consult the attorney that helped with your divorce to see what recourse you might have.
Paula says
Hi Robert,
I am in a horrible position as I read these posts I am not alone. I did not know enough or sadly educate myself before taking out parent plus loans for my son. Biggest financial mistake of my life. My question is I’ve been divorced for about 10 years and took the loans out for my son on my own. In my divorce decree it states my ex husband was responsible for 70% of my sons college education expenses and me 30% based on our income. Unfortunately he has done nothing to help me. I have no home. I’m seriously renting out a room at 56 years old so my life is pathetic. I had to file for bankruptcy less than 2 years ago and lost my car as I was unable to keep up with payments. Last year I consolidated the parent plus loans and as you know only one option the icr and based on my income brought the payment down to about $400 a month. With that being said I will have a full rent payment when I move out of this room and a car payment eventually as I’m using someone’s car. I don’t see how I can pay for all this without again falling into bankruptcy. I work full time but do not make enough money to cover this. Can my bankruptcy be used as a case for a Bruner test to have my payment evaluated to make it more reasonable for me to survive?
I’m seriously at a point where I don’t know what to do or where to turn. I’m scared and sick. Any suggestions?
Robert Farrington says
If your ICR payment is $400 per month, it means you are earning roughly roughly $43,000 per year. That’s $3,500 per month gross. If that’s not correct, you need to re-certify your income and get your payments lowered to the correct amount.
You won’t pass a Bruner test on any level because a true hardship (i.e. little income) will make your ICR payment legally $0, so why would a judge discharge it? Second, if you encounter disability, given these are Federal loans, you can get disability discharge. So the message you’ll hear is that bankruptcy isn’t the appropriate option for your debt.
I get it that 20% of your discretionary income is difficult, but you can budget appropriate, get help from your son, and you should also consider getting your divorce lawyer to get a judgement against your ex-husband for the amount he didn’t pay and you had to cover. He is in violation of your divorce agreement if he didn’t cover 70% and you had incurred a loss as a result.
Paula DiLeo says
My total income is 38,000 so no that is not correct. But after I completed my consolidation and ICR that is the payment I was given. I’m not asking for a total discharge by the Bruner test, what I’m trying to understand is why a single struggling parent who can’t even afford a one bedroom apartment since I live in New York can’t have a payment that is affordable to say, be able to buy food for the month after paying $1600 for a one bedroom. The rule of the 20% discretionary income does not take all into consideration and the travesty is no one cares.
Thank you for your time.
Robert Farrington says
You should first immediately re-certify your income based on your tax return so your payment accurately reflects that. You also need to significantly reduce your housing expenses. You are paying a lot and likely don’t need to. Read this: https://stefanieoconnell.com/much-need-live-new-york-city/
But even based on what you said, your rent and loans come to $2,000 – you still have $800. That’s not much, but it’s also totally possible to live on for a single person.
You also can look into your son supporting you, moving to a lower cost of living area, getting more work and income via a second job or side hustling. There’s a lot of levers you can pull.
You can also always consult with a lawyer – but you’re likely to get similar answers to what I’ve provided.
Steven Farzalo says
I had cosigned several loans for my son , over the past 10 years have paid off 3 of them and have 2 left .I have been paying on these 2 for the past 10 years , they show up on my credit bureau statements, show no late payments etc….Unknown to me in the past 6 months my son got late on another of his loans, I was sent a letter stating I was late with my payments . I called Navient and told them I was indeed current and had no idea what the problem could be, they told me I had cosigned the loan that was late . I explained I had no record of this loan , it was not on my credit report and I have no paperwork on it, they said they could send me a copy . I told them to please do …I have never received any copies . How do I find out if I do indeed have another loan or are they trying to pull something over on me
Robert Farrington says
Did you request proof of the debt in writing? Asking on the phone doesn’t mean anything.
Second, are you sure that your son didn’t take another loan you don’t know about? Just making sure on this one.
kyumika johnson says
I have a student loan that is 25 years old. It was a little over three thousand something when I started, now it’s over eleven thousand! My student loan contacted me about it and I told them that I was misled and the school falsified my application stating that I have graduated high school in which I didn’t. I never heard from them again. When I file for my taxes and waiting on my return, the student loan company TOOK THE WHOLE RETURN! I was devastated. Wut can I do to get that money back and stop future collection?
Robert Farrington says
You need to get out of default first: https://thecollegeinvestor.com/22174/student-loan-default/
Raquel says
I have 2 student loans that were consolidated into one for a total balance of a little over $34,000. The loans were consolidated in 2006 and I had a forbearance in 2006 into 2007 when dealing with a divorce. Payments resumed in 2007 and I paid every month. If I was late I paid any resulting late fees. My repayment plan was called Select 7 plan, which was 7 years of interest only payments, then graduated payments after 7 years. In 2011 my loan was acquired by AES. I was just informed that when AES acquired the loan, they started the 7 years of interest only payments over, instead of recognizing that I was already 4 years into the 7 years of interest only plan. Keep in mind that during all of this time my payments were only hitting the interest and my loan amount was actually increasing rather than decreasing.
I received an email in May of last year that my payments were increasing to almost double of what I had been paying. I have made the payments, however I believe something very unjust and possibly illegal has occurred as I have now paid many more years of interest payments outside the term of my original terms. This has resulted in me paying THOUSANDS of dollars towards interest only when it could have been hitting my principal balance.
I have been told there is nothing AES can or will do to resolve this issue. My question is do you think this is a case for an attorney or am I out of luck and thousands of dollars?
Robert Farrington says
If you believe your repayment plan or past payments were incorrectly handled during the acquisition of your loan, it’s definitely something to consider speaking with an attorney about. Most will do some type of low-cost or even free consults to see if you might have a case.
Mary says
My divorce decree states that I and my sons father need to pay for his college. The debt is now at $38,000. The US Dept of Education was receiving monthly payments, apparently not an approved amount and they began garnishing my SS during rehabilitation. My sons father passed and because I signed the loans and they are in my name they will not consider any forgiveness. I am low income, paying $150 a month and they are garnishing $300. What can I do? My son, the student, is still at a university getting his PHD.
Robert Farrington says
There’s not much you can do – sounds like you have private loans or PLUS loans. The best option is to work with your son and assess the ROI of his college degree. Getting a graduate degree is usually well beyond the scope of paying for college. He needs to start earning and paying back the debt with you.
Read this: https://thecollegeinvestor.com/17101/options-if-you-cant-afford-your-parent-plus-loans/
Brian says
I have been die-nosed with a rare form of cancer (polycythemia vera) That has no cure and the medication and medical bills are piling up to the point were I have to decide on making my loan payment and skip medications and medical treatments. I graduated from college in 2006 with a loan Dept of 100,000 +, and I’m down to 92,000 now, my loan payments are 1,000+ every month.
What if anything can I do to get the loan company to maybe forgive the loan considering I have maybe 8 years with treatments to live.
Any advice would be greatly appreciated, the stress of all this is extremely high and increasing the speed of the cancer to the point of were I don’t think I will make 8 years, maybe 4 to five if I’m lucky.
Robert Farrington says
If you’re considered totally and permanently disabled, you can have your loans forgiven (read this: Disability Student Loan Discharge).
Otherwise, just keep your loans on an income-driven repayment plan, and if you have no income, your payments will be zero. Don’t sweat the loans, take care of yourself.
Also, if these are Federal loans, they will be discharged on death – no burden for your family at all. If these are private loans, your cosigner will be on the hook though, so plan accordingly.
B says
I borrowed 15k and got behind for many years. I’ve been paying regularly for the last several years but now ow 58k! How do I pay this off! I’m a single mom and feel like I’m never going to get out of this mess. Is there any help since this is all interest added over the years?
Robert Farrington says
It all depends on what repayment plan you’re on. Most income-driven plans have an end date: 20 or 25 years. At that point, any balance is simply forgiven: Secret Ways To Get Student Loan Forgiveness.
NW says
I live an another state now from where I attended college. I have student loans totaling $34,000 dollars from 1986. Because now employers have the right to look at my credit, I can’t get a regular job because of the outstanding student loan debt that appears on my report. So that has forced me to bounce around from unemployment and temporary work for 7 years to support myself. I have done everything in my power to get a full time job without any positive outcome. My loans are all in a forbearance status right now. But I know this can’t go on forever. I’m now 54 and I feel like I lost 7 years of getting this debt some what under control. Had I got a half way decent job when I first moved to another state, then I would have at least been able to pay 1/2 of my required obligation. Is there anything I can do to get some of these 17 loans discharged? Please advise cause I’m at the end of my rope with this and I’ve had several debt relief companies make promises that they just can keep. They take your money and leave you stranded once they get their final payment. I don’t need any false hope right now, just the truth so I know how to proceed with this situation. Please Advise. Thanks.
NW
Robert Farrington says
If private loans, an attorney may be able to help.
If Federal loans, getting on an income-driven repayment plan is likely a better option that continuing to be in forbearance. With no income, your payment could be $0 and you are on track for loan forgiveness.
Shemika says
Hello, My situation is that i recently applied for Loan Discharge Application: False Certification (Ability to Benefit) and I was denied by loan holder. I qualify under requirements I did not have a GED or diploma upon entering the school the school did not give me the ATB test. The school I attended has provided a false document (GED) that I didn’t provide. I have no idea where they obtained this document. It’s is fraudulent. I have went to the department of education for GED here in Atlanta Ga in person just to see if they had a GED on file for me and they don’t. My loan holder and I have went back and forth and now they are saying that I have to prove that the school knew I didn’t have a diploma/GED I’m telling them that the fact that they( original school) have produced a fraudulent document should be enough. How am I to prove the school didn’t know? This happened in 08 there wouldn’t be a written document stating “we’re going to enroll you under false pretenses” how do I continue to pursue this matter if they require something I can’t prove. Is it time to obtain a lawyer? What kind of lawyer would it be?
Robert Farrington says
You want to find a consumer protection attorney that specializes in student loans. If these are Federal loans (like it sounds like), the attorney can be in any state. A simple Google search and using the resources above can help you locate one.
DG says
Need some serious advice. My daughter loss her father at the age of 8 and I struggled as a single mother for years. She decided she want to pursue school but she did not have credit nor she could get loan. So I thought the least I could do is help her since she was unable to get loan. So she found a parent PLUS loan (fed. government) and I just signed (mistake). Now I just can not afford what they want. I live a nervous rec, am always sick, unable to eat or sleep because I have a $200K repayment loan. I’ve absorbed the forbearance which I truly had no clue what I was doing. I don’t even make what they are insisting the payments and I do not qualify income based. I can truly see why people end up committing suicide due to financial burden related to student loans. I can’t even imagine myself not here for my youngest (12yr) and if so I can’t even help her go to school if or when she choses to do so. So with this said is there any suggestions on what to do??? I am in a desperate need of some advice/guidance.
Robert Farrington says
Here are your options for dealing with a Parent PLUS Loan.
Paul Culp says
I borrowed money around 1988. Approximately $11000. Since that time through wage attachment and refund holding they have collected approximately $15000. I became disabled in 2001 and requested a discharge due to disability. Since that time I have maintained my eligibility–still disabled never made too much money. Over the last year a new company has attached my social security check. I located my original discharge letter along with the requirements to maintain that status. I was told it didn’t matter that company is no longer in charge of collecting. I now owe over $35000. Can a lawyer help me with this?
Robert Farrington says
A student loan lawyer may be able to help you and stop the garnishments, maybe even see what you can do to get disability discharge. Definitely doesn’t hurt to ask.
Carol Murphy says
My daughter is 51 yrs. Old she been disabled since she was 2. She has epilepsy. She went to college for 3 years and had to leave because of the amount of seizures she was taking. 4 years ago she had brain surgery and seizures stopped for 2 years and she worked a job at minimum wage. After a year her wages were garnished and her 10,000 federal and state income tax was taken. Her seizures have returned worse then ever. She had to quit her job and has no income. She has 2 children . We tried to get her tax money refunded but as of today we have not been able to. Please help. We don’t know what to do.
Robert Farrington says
She is likely in default on her loans, which create the garnishment. She needs to get out out of default.
If she’s totally and permanently disabled, her loans could be discharged: Student Loan Disability Discharge.
There is no way to get the past money back, but you can prevent this from continuing.
Dimitry says
Hi. I have a huge private loan of about $160k after med school and I have trouble finding residency – the first year I paid interest only ($800) which was way too much, but possible but now they want me to make payments of over $1600/mo. That’s impossible for me to do, especially when I’m not working as a physician. I have 2 main questions I’d like to ask.
My main problem is how do I remove my parents from the cosigner agreement? If something goes wrong I dont want it affecting them.
The second issue, is how do I go about paying less monthly – aside from negotiating with collections. Assuming negotiations don’t lead to anything, what is the next step?
I appreciate your help, thank you.
Robert Farrington says
Sadly, there aren’t many options for private student loans.
1. You can’t unless you refinance. You won’t be able to refinance unless you get a solid income and have great credit.
2. Negotiating with them is it. Or asking your parents (who cosigned) for help – since you might end up in default and harming them anyway if they don’t help you.
Tony says
Medical school graduate currently owing $330,000 in private loans. I borrowed $191,000 for medical school starting from January, 2010. Over the course of 9 semesters, my loans ranged from $20,000 to $32,000 at 10% interest each. Now I have almost $130,000 in accrued interest. I have stopped trying for residency because I am an old graduate ( >5yrs) and I went to a Carribean medical school. I wasn’t qualified for federal loans. My chance of repaying my student loans without becoming a certified physician is slim to none.
I am currently working in a nonclinical role making $55/hr. My private lender wants me to pay $16000/month while I’m only making $10000 PRE-TAX. I have been making reduce payments at $450/mth for the past 5 years. I have exhausted all forbearance and deferment options. Because my loans are privately funded, I do not qualify for income based reduction payments. I have tried refinancing with no luck because of where I went to school. I’m at the mercy of my private lender. I can’t file for bankruptcy because I make too much but I can’t afford to pay 16k a month either. That is not even plausible. They won’t negotiate on the terms with me. Should I take my lender to court? Thank you.
Robert Farrington says
You can seek an attorney to see if you can get the debt discharged in bankruptcy (or maybe force your lender to restructure your debt). Beyond working towards being a physician, that’s likely your best bet.
It’s a myth that you can’t get your loans discharged in bankruptcy, it’s just rare because of the tests you need to pass to qualify. See this: student loans and bankruptcy.
Tony says
Would my situation qualify for undue hardship and should I apply for chapter 7 or 13? Thank you.
Robert Farrington says
Likely not if Federal loans. Judge will tell you to get on income-drive repayment and make low cost payments on your loans. And even more-so right now, interest and payments are suspended until September 30, 2020.
Tony says
I only have private loans. Please advise what happen if I were to file for bankruptcy. I’m hoping to restructure my loans or at least settle my debt.