Former students with student loan debt typically have many questions regarding legal issues. Set forth below are some of the most common questions and answers. If you have questions that are not listed herein, feel free to click here to send me your student loan questions for quick response.
Question: How can I get out of student loan default?
Answer: If your loan(s) are federal or federally backed, you can avail yourself of the federal rehabilitation and consolidation programs. The rehabilitation program allows you to make a very modest payment based upon your financial ability for nine consecutive months. If you make these nine payments, then you have the ability to have your loan provided to a new lender and enter into a new repayment agreement and at the same time be considered out of default. The consolidation program allows one to consolidate several loans into one loan with payments tied to one’s income.
Question: How can I stay out of student loan default?
Answer: If you have federal loans or federally backed loans, you may avail yourself of federal programs, including what is referred to as the Income Based Repayment program (“IBR”) and the Income Contingent Repayment program (“ ICR”)? Calculations of payments due under both of these programs are based on your available income and offer borrowers extended repayment terms.
Question: What if I need temporary relief from my student loan debt?
Answer: Look at student loan deferment and student loan forbearance. Sometimes situations arise in which borrowers need assistance on a temporary basis.This can be achieved through programs for what is commonly referred to as student loan deferment and student loan forbearance. Both deferment and forbearance enable a borrower to cease making payments for a certain period of time if certain criteria are met, such as economic hardship. The main difference between forbearance and deferment is that while principal and interest payments are often both ceased under deferment, under forbearance accruing interest must continue to be paid.
Question: I have heard that the federal government can offset a tax refund due in order to “collect” on my student loan debt balance, is this true?
Answer: Yes, it is true for federal loans. Before doing so, however, the federal government must give you notice and a hearing on whether you have any defenses to this action to be taken by the federal government.
Question: I have also heard that my wages can be garnished to pay for my student loan debt, is this true?
Answer: Yes, as with tax refund offsets, the federal government has set up a regulatory framework whereby the wages of former students who have federal loans or federally backed loans can have their wages garnished. This is true even if the state where the student resides in general prohibits wage garnishments like here in Pennsylvania where I practice. As with the tax offsets, there is a procedure whereby the former student must get notice and an opportunity to contest the proposed garnishment.
Question:What remedies do I have if I have been getting harassed with respect to my student loan debt?
Answer: It is always an unpleasant experience if you are being harassed. If the harassment is by a debt collector, you may very well have an action under a federal statute known as the Fair Debt Collection Practices Act (“FDCPA”). After a review of your case, if we jointly decide to proceed with litigation and are successful by way of settlement or trial verdict, you would be entitled to damages, including for pain and suffering and/or statutory damages.
Question: What can I do about my student loan debt if I am disabled?
Answer: If your loans are federal of federally backed, there is the possibility you can receive what is labeled a total and permanent discharge. This can be achieved in one of the following two ways: you have had a determination of disability by the Social Security Administration that indicates that your disability will last for at least five to seven years; or your physician can certify that you are unable to work at any job given your present physical or mental impairment.
Question: So many of your answers pertain to federal loans or federally backed loans, what relief is available for former students who have private loans that are not backed by the federal government?
Answer: Yes, it is true that much of the published materials pertain to procedures by which an attorney can assist former students with federal loans. However, you are not out of luck if you are saddled with student loan debt that is private. It still is possible to negotiate settlements of the outstanding debt, assert defenses if you are sued in court and have an attorney act on your behalf in conjunction with any other matters which arise.
Do you have any specific or additional questions that are not answered above?
Don’t hesitate to send your student loan questions to me here or call (215) 307-3939 and I’ll be happy to help.
