Celebrating One Year of Student Loan Legal Advocacy

By Adam Minsky, Esq.

A year ago this week, I opened one of the first law offices in the country dedicated entirely to helping student loan borrowers. I had no idea what to expect; I knew a lot of people in this country had student loan-related legal problems, and I thought I could help, but I just didn't know what challenges and hurdles I might face, and whether I would actually be able to help people. It's been a truly exciting and (dare I say) successful year. I had a little fun and crunched some numbers to see what's been accomplished here over the past 12 months:

  • Over $910,000 (nearly $1 million!) in student loans have been brought out of default.
  • 26 borrowers have been switched to Income-Based Repayment plans, with tens of thousands of dollars in total monthly savings compared to Standard and Graduated repayment plans.
  • 21 borrowers have been removed from collections.
  • 30 borrowers have been issued federal Direct Consolidation loans, with over $2 million in student loans consolidated.

Honestly, my favorite aspect of the work has been the clients. All of you have been truly a pleasure to work with, and you make my job so enjoyable (and sometimes even fun... Let's be serious, what can be more fun than snatching a $100,000 student loan from the clutches of a nasty collections agency?). I have to say, although I am very proud of these numbers, there's still a lot of work to be done. Looking forward to new challenges and loftier goals for the coming year.

Thank You For Sharing Your IBR-Nightmare Stories- Keep 'Em Coming

By Adam Minsky, Esq.

Following my recent article about the new federal student loan servicer arbitrarily kicking borrowers off of IBR, I have been receiving lots of emails from you all about your experiences. Thank you! The National Consumer Law Center (NCLC) is working hard to try to get the Department of Education to fix these problems.

Please keep the stories coming! Every single one is helpful. If you've experienced problems with the new federal student loan servicer (www.myedaccount.com), let me know. Please provide the following info:

  1. A detailed description of the problems you experienced, as well as your attempts to correct them.
  2. Your name and occupation.
  3. Whether you are willing to share your name and email address with the Dept. of Education (through NCLC's efforts to collect stories and correct the problems).
  4. Whether you are willing to speak directly with the Dept. of Education, with NCLC's support, about your specific experiences.

Again, thank you all, this is enormously helpful.

Delinquency and Default: What's the Difference?

By Adam Minsky, Esq.

If you don't make your student loan payments, there can be serious consequences that impact your borrowing rights, your credit score, and ultimately your ability to pay off your student loan. But what exactly happens when you can't pay?

Delinquency. When your student loan is delinquent, it means that you've missed at least one payment and your loan is in danger of going into default (discussed below). Think of delinquency as "pre-default." Delinquency periods (the length of time before your loan goes into default) vary depending on your student loan. For federal student loans, you can be delinquent for up to 270 days (approx. 9 months) before you go into default. For private student loans, your delinquency period is usually far shorter, sometimes as short as 30 days. While your loan is delinquent, your lender or servicer may report the delinquency to credit reporting agencies, which could harm your credit.

You can cure the delinquency by either making your required past-due payment, or by exploring deferments and forbearances. It is very important to come up with a game plan before your loan goes into default. Tip: if you're worried about becoming delinquent because you have trouble keeping track of all your student loan payments, you may want to explore auto-debit.

Default. Strictly speaking, default occurs when a borrower has broken the terms of the loan contract by failing to adhere to repayment obligations. Defaulted student loans are far more serious than delinquent ones. While you can cure delinquency relatively easily by making your payments or going into deferment/forbearance, once you're in default, it may be difficult to get out. Read More...

September 11th Student Loan Discharges

By Adam Minsky, Esq.

There is a little-known discharge (cancellation) option for federal student loan borrowers who are victims, or relatives of victims, of the September 11th terrorist attacks. This is a remarkable discharge in that it is the only discharge option available to borrowers because of a single historical event. (There is a natural disaster-based forbearance option for federal student loan borrowers, but that just postpones your payments, as opposed to canceling the entire loan balance.) Moreover, very few people know about this discharge option.

Here's how it works:

You must be either a direct victim or first responder of the September 11th terrorist attacks, or be a spouse or parent of a victim. Eligible loans include Perkins loans, FFEL loans, and Direct Loans, including Parent PLUS loans. The loan balance must have been owed on September 11, 2001 (meaning the discharge won't apply to, for instance, a relative of a victim who obtained a federal loan sometime in 2002).

If you know of anyone who might be eligible, spread the word, as this is probably the least-known discharge option for federal student loan borrowers.