If you feel like a salmon swimming upstream in your efforts to repay your student loan debt, you aren’t alone. Over 3,000 people default on their federal student loans each day in the United States. Fortunately, you have many options to help you get your payments under control, and most of these you can do yourself. However, there are occasions when it pays to hire a student loan lawyer. A student loan lawyer is an attorney who is experienced in dealing with student loan debt issues, can illuminate your options and can represent you with lenders, creditors and the courts.
Every situation is different, so we are not here to tell you when you definitely should or should not hire a student loan lawyer. However, we can offer you guidance in some steps you can take to get control of your student loan debt and when you may want to start considering hiring a student loan attorney.
When You Probably Don’t Need a Student Loan Lawyer
There are a number of programs and repayment plans designed to keep student loan debts manageable. You can apply for these yourself without consulting a student loan lawyer.
Job-Driven Forgiveness Programs
There is no reason you should need a student loan lawyer to apply for a job that offers student loan forgiveness. You do, however, need to carefully read the requirements for the programs that interest you. There are federal, state and other programs that forgive student loan debt in exchange for working at certain types of jobs or for specific employers for designated periods of time, often two years. These student loan forgiveness programs help students but also help to fill positions that help the community. Sometimes, but not always, these positions are in rural areas. It’s best to plan in advance to apply for one of these programs before you are in financial trouble, because forgiveness requirements may include being up to date on your student loan payments.
You may want to explore these programs:
- The Teacher Loan Forgiveness Program (TLFP) is for those who teach in low-income schools or educational service agencies. To apply for student loan forgiveness for a teaching position, complete a Teacher Loan Forgiveness Application and submit it to your loan servicer. The Teacher Cancellation Low Income Directory lists some qualifying low-income schools.
- You may qualify for the Public Service Loan Forgiveness (PSLF) Program if you work for a government organization or a not-for-profit organization, or if you are a full-time volunteer for AmeriCorps or the Peace Corps. To apply, you must complete the Employment Certification form and submit it to your loan servicer after making 120 qualifying payments.
- States and universities also offer programs known as LRAPs (Loan Repayment Assistant Programs) for various professions. Check with your university and the state association for your profession. Read our article, Jobs that Offer Student Loan Forgiveness for more information.
Remedies for Delinquency
You have missed some payments, so your student loan accounts are delinquent, and you don’t really see how you can pay what you agreed to every month. At this stage, you probably don’t need a student loan attorney, unless you feel overwhelmed and just want to seek some advice. Fortunately, federal student loans give you a lot of flexible alternatives for repayment. Even private student loan lenders, though not offering as many protections, usually give you options. You may want to read our article on Student Loan Delinquency.
Income-Driven Repayment Plans
If you are having trouble meeting your payments, you may want to consider applying for an income-driven repayment plan which enables you to pay a lower monthly payment that is based on your income. Help is available without consulting a student loan lawyer. See the Federal Student Aid websites repayment estimator to get an idea of your possible payments. Your loan servicer will work with you on setting up a repayment plan for free.
You can apply here for one of four different plans
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
Deferment and Forbearance
Federal student loans and some private ones allow a postponement of payment under certain circumstances. This is called deferment. Various circumstances qualify such as being in school or the military.
Forbearance also allows postponement of payments, but it is based on financial hardship rather than the specific circumstances necessary for deferment.
You don’t really need a lawyer to apply for student loan deferment or forbearance, but you should do your homework.
Refinancing and Consolidation
If you need to lower your monthly payments, you could consider refinancing your student loans and consolidating them into one payment. You may be able to lower your interest rate and the amount of your monthly payment. You can refinance both your federal and private student loans and consolidate them, but you may want to think twice before refinancing your federal student loans with a private loan. Federal student loans come with more protections in the form of forbearance, forgiveness and deferments than private loans usually do. Also, federal loans offer income-driven repayment plans. If you have any doubt at all about your ability to make on-time payments for your refinanced, you probably should not give up the protections of your federal student loans.
You don’t need a student loan lawyer to figure out your refinancing options. You may want to start by reading Refinancing Student Loans and Everything You Need To Know and then contacting lending institutions about refinancing to discuss deals that makes sense for you. Of course, if you are completely confused, you could consult with a student loan lawyer who knows the system well.
If you are disabled and unable to work, you can apply for a total and permanent disability discharge effective for all the student loans that are in your name. Of course, you will have to prove to the Department of Education that you are permanently disabled. See our article, Total and Permanent Disability Discharge as a starting point. Your loan servicer can help you to apply.
- Financial experts focused on Student Loan Debt Forgiveness
- Qualify for programs to get $5,000 off – total debt forgiveness.
- US government programs designed to help reduce debt.
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When You May Need a Student Loan Lawyer
Defaulted Student Loans
Your student loans are in default when you have not made payments for 270 days (about nine months). This is the point that signals to a lender that you do not intent to pay back a loan. Therefore, they will refer your case to a collection agency to take action against you. If you act quickly, you may be able to work things out with your loan servicer yourself. Even then, consulting with a student loan lawyer is not a bad idea even if you handle the bulk of the work yourself.
But if your default proceeds to a law suit or collections, you should consult with a student loan lawyer. However, you could first try talking with your loan servicer and use some of the remedies such as an Income-driven payment plans described above in the Delinquency section. (Some remedies are no longer possible once you are in default.) You may want to read our article, How to Get Student Loans Out of Default.
You may be able to resolve your defaulted student loans by going through a Direct Consolidation. This is the federal consolidation program which takes your loans out of default, and puts them back into good standing. At that time you are also able to select an income driven repayment plan which could give you a payment as low as $0.00/mo. This can be done without an attorney.
Student loan rehabilitation enables you to clear the default on a federal student loan, but you must act before the lender sues you and obtains a judgment. To rehabilitate your loans, contact your loan servicer. To find out who that is, see the My Federal Student Aid website. Unless you are having difficulty speaking with your loan servicer, you probably don’t need a student loan lawyer to rehabilitate your loans.
Lawsuits and Collections
If you are being sued or are in collections, in most cases you will want to speak with a student loan lawyer. Often an attorney can help you see solutions you might miss before the window of opportunity for action narrows. Even if you decide to proceed on your own, it is a good idea to consult with an attorney. Be aware that the government can collect your federal student loan debt by withholding money from your income tax refund and garnish your wages. If you are facing wage garnishment, see Wage Garnishment: What It Is and How to Resolve It to learn how to prevent wage garnishment and how to stop it.
You are not required to use an attorney when you file for a Chapter 7 or a Chapter 13 bankruptcy, but it is highly recommended, particularly if you would like to get your student loans discharged for undue hardship under Chapter 7.
- Chapter 7 bankruptcy: Most individuals who file for bankruptcy file a Chapter 7 bankruptcy, which is detailed under Title 11 of the U.S. Code. It is what most people think of when they think of bankruptcy. Chapter 7 is a liquidation bankruptcy where debts are erased.
- Chapter 13 bankruptcy: Chapter 13 is a reorganization where you still repay debts but do so under a plan that prioritizes debts and may enable you to pay less every month while the plan is in place. If you have student loans, you will still owe the unpaid amount after the end of the Chapter 13 plan.
Some debts, such as credit card debts, are automatically discharged in a Chapter 7 bankruptcy. However, student loan debt is not automatically discharged. You must prove to the court that being forced to pay your student loans would cause you “undue hardship”. This means you must file a lawsuit against your student loan holder in an adversary proceeding as part of the bankruptcy process and present evidence and witnesses. 40% of those who try to prove undue hardship succeed.
Student loan lawyers who are experienced in bankruptcy understand the process and the evidence you must show for undue hardship in your particular jurisdiction, so it is wise to use an attorney for a Chapter 7 bankruptcy. If you feel it is not possible for you to hire an attorney for your bankruptcy, you can still try to show undue hardship on your own, but you may want to at least have a consultation with a student loan lawyer. If you are unsure whether or not you should file a Chapter 7 or a Chapter 13 bankruptcy, a student loan attorney with bankruptcy experience can analyze what is best for your situation even if you want to then proceed on your own.
The Bottom Line of Student Loan Lawyers
If you are having so much trouble repaying your student loans that you have become embroiled in legal such as bankruptcy, lawsuits or collections, it is usually wise to hire or at the very least consult with a student loan attorney. If you are not at that stage and are merely exploring avenues to make your student loan payments more affordable, you may want to speak with your loan servicer first to explore your options. If you are in doubt and confused about how to begin, you can always consult with a student loan lawyer, so they can help you lay out a path, but your student loan servicer should be able to offer you guidance for free. The National Association of Consumer Advocates is a good resource for finding a lawyer who can plan your defense or you can check out lawhelp.org for free for low-cost law assistance. Do beware of loan debt relief companies which are sometimes loosely affiliated with attorneys for marketing purposes, but where you will never really have an attorney’s help.
Compare the Best Student Loan Refinance Rates
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.