Student loan debt is a burden for many Americans. With lifetime loan default rates estimated to be as high as 15% or more, it’s clear that many people find themselves unable to shoulder this burden. And while federal student loan programs have many payment options, deferment possibilities, and loan forgiveness programs in place, most private student loans do not.
The average borrower of federal loans has a balance of more than $33,000. When the economy takes a dip, or someone faces an unexpected financial crisis, they can easily end up in hot water over their student loan debt.
And missing payments or being in default are not the only student debt problems you might face. Sometimes lenders engage in unfair practices both while offering loans and collecting on them. Without thorough knowledge of the appropriate laws, it can be difficult to navigate these challenges. This is why some people find themselves in search of a student loan lawyer.
In this article, we will outline what a student loan lawyer does and how to determine when you need one, and then, most importantly, how to go about finding and hiring one that can help you.
What Do Student Loan Lawyers Do?
Student loan lawyers specialize in the laws related to student loans and associated debt. This is important because not all lawyers are familiar with all corners of the law. One that specializes in student loan debt will be better equipped to offer you sound advice and help you.
Lawyers are also not just for trying cases in court. In fact, most of the time they help people with simpler matters of contacting lenders, resolving disputes, sending out notices, and so on. The following are just some of the things a good student loan lawyer should be able to help you with:
- Provide legal advice in regard to your rights and options
- Communicate with a student loan holder, servicer, or debt collector on your behalf
- Help you take care of delinquencies or defaults
- Act as a barrier between you and any unfair or abusive conduct by debt collectors
- Help you determine if and how to file for bankruptcy
- Help arrange debt settlements
- Help you understand the relevant laws and how they pertain to your situation
- Write and file legal paperwork on your behalf or send legal notices
Reasons to Hire a Student Loan Lawyer
When it comes to dealing with student loan issues, the first step is often to contact your loan servicer and attempt to resolve problems yourself. After all, this option is completely free, and when it comes to federal student loans, there are many programs in place to help you get back on track. Even private lenders know it’s in their best interest to work with you instead of pursuing legal action against you.
But there are cases in which hiring a lawyer is your best bet. While there isn’t much a lawyer can do that you can’t technically also do, lawyers come with years of training, knowledge, and experience that you likely do not have. It’s far too easy to get in over your head when it comes to more complex legal matters.
Reasons to hire a student loan lawyer include:
- You’re being sued for a student loan.
- You do not feel that you understand your student loan situation and how to proceed, and you’ve exhausted other options (such as contacting the servicer).
- You are the victim of predatory lending by a for-profit institution.
- You believe there are inaccuracies in your student loans and are unable to resolve this with the servicer.
- You are facing wage garnishment or other consequences of default and you want help stopping it.
- You feel that the lender, loan servicer, or debt collector is engaging in unfair practices and you are unable to resolve it with them.
- You wish to file bankruptcy and want to explore the possibility of including student loan discharge as part of the process.
Choosing Between a Lawyer and a Debt Relief Agency or Credit Counseling Service
If the issue you are attempting to resolve is not one that is strictly an issue of legal actions, such as lawsuits filed against you or legal action you wish to take in response to predatory lending practices, you might consider other options for resolving your student loan debt problems.
You should know that federal student loan assistance should always be free through your student loan servicer or the government. They can work with you to arrange for deferment, forbearance, alternative payment plans, or loan forgiveness. When it comes to private student loans, the options may be fewer, but you can often speak to the servicer to explore them as well before taking further action.
Credit counseling services are sometimes helpful when it comes to resolving problems with debt and could be another way to go. American Consumer Credit Counseling, for example, is a nonprofit company that has provided confidential consumer credit counseling services, debt management, budget counseling, bankruptcy counseling, student loan counseling, and financial education to consumers for decades.
Debt relief agencies are also an option, but you should be cautious as many of these end up being scams. Guidelines from the FTC suggest always checking with the state attorney general and local consumer protection agency before doing business with any debt relief service. Red flags to be on the lookout for include:
- Claiming to be associated with the Department of Education, but do not have your loan details readily available in their system
- Requesting a fee before they will assist you with your loans
- Asking you to sign over power of attorney so they can make changes to your account
- Requesting that you do not contact your servicer while they are working on your behalf
- Promising to cancel your student loan debt, lower your monthly payment immediately, or provide instant relief from wage garnishment or default
- Asking you to send your student loan payments to them instead of your loan servicer
How to Find the Right Lawyer for You
If you’ve come to the conclusion that you want to hire a lawyer to help with your student loan debt, then you need to search carefully to find one that is right for you. First and foremost, you want a lawyer that explicitly specializes in student loans. Most lawyers do not do this, and they may not have the expertise needed to help you.
Try the attorney search feature on the National Association of Consumer Advocates (NACA) website. You can specify in your search that you want Student Loans to be the area of practice, and also select your state. You will get a list of lawyers that may be able to help you in return. The American Bar Association also has a page with links to lawyer finders by state.
Once you have a list of potential lawyers, you will want to contact them and ask them if they have worked with your specific problem before. Even if they specialize in student loans, they may not be the best fit if they aren’t familiar with your specific needs. For example, some student loan lawyers work only with private student loans and not federal loans.
You should additionally ask any prospective lawyers about what and how they charge for their services and how they accept payment. That way you know what to expect upfront and can decide if it is worth the expense.
Always check for reviews online as well. Finding feedback from other clients can give you a better idea if you will work well with a particular lawyer or not, or alert you to potential problems.
Expenses Associated With Hiring a Student Loan Lawyer
A big consideration when deciding to hire a lawyer is the potential cost. Particularly if you are experiencing debt problems you might be wondering if it is a good idea to also be owing money to a lawyer in addition to everything else.
Always ask a lawyer what the expenses will be upfront. Different lawyers bill differently. They may charge a one-time consultation fee, an hourly fee, a flat fee for particular services, and fees for certain types of paperwork. Weigh these expenses against what you can save by hiring them.
If they can help eliminate some of your debt, then the lawyer fees may pay for themselves. If they are able to resolve a dispute between you and a company incorrectly claiming that you owe thousands of dollars, then it will be well worth it.
In some cases, it might be an issue of paying for peace of mind. Perhaps you end up incurring more costs as a result of having to hire a lawyer to sort out your student loan debt problems, but the knowledge that it was done in the best possible way by an expert without you needing to fret and worry can be well worth it also.
Depending upon your situation, it might even be possible to find a lawyer willing to work with you pro bono. Visit the American Bar Association’s Free Legal Help page for information on how you might be able to get a lawyer to work with you at no cost.
Stay Informed About Student Loan Debt
The experts at College Finance can help you stay informed about your student loan repayment options, including income-driven repayment, deferment or forbearance, consolidation or refinancing, and loan forgiveness programs. Check out the resources on our website and consider signing up for our newsletter to receive important information in your inbox.