Student Loans and For Profit Colleges

If you’re struggling to make monthly payments on a student loan, you’re hardly alone. About 1 out of every 4 student loan borrowers are in default or behind on their payments, according to the Consumer Financial Protection Bureau.

Students who took loans to pay tuition at for-profit colleges are defaulting on their loans at a higher rate. The Massachusetts Attorney General has filed lawsuits against several for-profit schools – including Corinthian College and ITT Educational Services – for making false claims and promises. The complaints allege that these schools misrepresented the quality of their programs and made false claims about the ability of graduating students to find jobs in their field of study.

If you’re having trouble keeping up with your student loan payments – or if you co-signed a student loan for a child or relative whose loan is in default – I may be able to help. There are ways for you to get out of default and to protect yourself from unlawful debt collection practices. Please contact me if you find yourself in any of the situations described below:

• You’re being dunned or sued by a debt collector.
• You’re not sure whether you have federal or private student loans.
• Your loan servicer hasn’t or won’t tell you about programs that you might be eligible for, such as an income-based repayment program, loan consolidation or government service loan forgiveness.
• You took out student loans to pay tuition at a for-profit college and you’re struggling to find a job or can’t find a job in your field of study. In fact, you may be able to file a lawsuit for damages against a for-profit college even if you didn’t borrow money to pay tuition.
• You paid fees to a student loan debt relief company that promised to lower your interest rate, reduce your monthly payments, or arrange to have your loans forgiven, then didn’t follow-through on its promises.

Here are a few of the ways I might be able to help.

• Some borrowers don’t know whether they have federal or private student loans. Knowing what type of loans you have (and, if you have federal loans, the specific loan program) is a critical first step in identifying your options. For example, borrowers with federal student loans have pre-default options available to them (including forbearance, payment deferrals and consolidation) that are generally not available for private loans. But private loan borrowers may have defenses to a debt collection action that are not available for federal loans.
• You’re not sure what terms and conditions apply when your student loan goes into default. You no doubt signed a loan agreement and/or a promissory note when you first borrowed the money. The terms and conditions that apply if your loan goes into default are spelled out in these documents, usually in dense legalese. I can review your loan documents and identify what legal defenses or other remedies you may have. If you don’t have these documents, I’ll help you try to get them from the owner of the loan or the loan servicer (the company you make payments to).
• If you’re behind on your loan payments, you’ve probably received threatening notices or telephone calls from a debt collector. That can be stressful and intimidating. Fortunately, various federal and state debt collection and credit reporting laws apply to student loans. For example, a debt collector must stop trying to collect your student loan if you dispute the debt and ask the collector to validate it. Debt collectors must also stop contacting you directly if you’re represented by an attorney. If you retain me, I can send a dispute letter to the debt collector. The debt collector must stop trying to collect the debt when it receives the letter and can’t do so again until it complies with its obligations.
• If you are being sued for a private loan in default, the entity suing you may not be the original lender. Private loans are often sold or transferred, sometimes more than once. If your student loan was sold to a debt buyer or student loan trust (such as National Collegiate Trust), the entity suing you must prove it has a right to collect the loan before you can be held liable. That generally requires them to have possession of the original, signed promissory note or loan agreement. Debt buyers and loan trusts frequently don’t have these documents and may be unable to prove they own your loan. If so, the case against you should be dismissed.
• If you’re being sued to collect a student loan you took out to pay tuition at a for-profit school, you may be able to raise defenses based on your school’s unfair, deceptive or unlawful conduct.
• Don’t make the mistake of assuming there’s nothing you can do if you’re being harassed by a student loan debt collector or being sued for a loan that’s in default. Contact me and find out what options you may have.