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Student Loan FAQs

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FEDERAL STUDENT LOANS

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1. What are different types of federal student loans?

Most student loans are federal student loans.  A federal student loan is an education loan guaranteed by the U.S. Department of Education.  The most common are Direct Loans, FFEL loans, Stafford loans, PLUS loans, and Perkins loans.  Student loans include Parent PLUS loans, which are loans that parents take out to help with their children’s education.

2. I don’t know what federal student loans I have. Where can I find this information?

Sign into the government NSLDS website here. This website provides a listing of all your federal student loans.  Click on “Financial Aid Review.”  Only your federal student loans are listed–not state or private student loans.

3. When should I be calling Doug Triggs about my student loans?

You should call me for help when:

  • you have trouble making your loan payments,
  • you are behind in your loan payments,
  • your loans are in default,
  • you become unemployed, only part-time employed, or disabled,
  • you are getting calls from collection agencies,
  • you have a student loan garnishment on your wages, or
  • you are being sued for your student loans.

4. Can Doug Triggs help me plan for an eventual discharge (forgiveness) of my federal student loans?

  Yes, and taking action now is important.  This is particularly the case if you have large student loans. Here are some of the student loan forgiveness opportunities:

Discharge due to time.  The U.S. Department of Education will discharge any remaining balance of your federal student loans after a certain period of time—sometimes after 20 years, other times after 25 years. But to take advantage of this, you must be signed up for one of the appropriate repayment plans. While this seems like a long time, the amount that might be discharged can be substantial if you have large student loans but only a moderate income over those years.

Discharge due to public service.  If you are employed full-time (30 hours or more) by any level of government (including public schools), by a 501(c)(3) organization, or by certain public service organizations, the remaining balance on your federal student loans can be forgiven after only 10 years of qualifying monthly payments.  This requires advance planning, but the student loan forgiveness benefits can be dramatic.

Discharge due to disability.  If you are disabled, your federal student loans may be discharged immediately upon application.  Your disability must be total and permanent.  There are three (and only three) grounds for this:

  1. First, you have a qualifying Social Security Administration long-term disability award under SSDI or SSI.
  2. Second, you have a VA (Veterans Administration) determination that your service-connected  disability makes you unemployable.
  3. Or third, you have or can obtain a physician’s written determination that your disability precludes you from any gainful employment and will last for at least 5 years (or will result in death).   Note the “any gainful employment” language.  It means you can’t work at any job.

5. I’ve heard about the Borrower’s Defense to Repayment. What is it?


The Borrower’s Defense to Repayment (BDR) is a possible avenue for federal student loan forgiveness if you were injured by your school’s misconduct. Here are the types of misconduct that may qualify:
Your school misled you (or failed to tell you important information) about…

  • future employment
  • job placement rates
  • job placement rates
  • graduation rates
  • post-graduate earnings
  • tuition and fees
  • how you would repay your student loans
  • the terms for repaying your student loans
  • the transferability of credits
  • availability of job or career services assistance
  • availability of externships
  • teacher qualifications or the methods of instruction
  • the importance of enrolling immediately at the school
  • the consequence of failure to enroll at the school, or
  • how difficult it was to be admitted to the school

Or, your school failed to perform its obligations under its contract with you.
Or, there is a court or administrative judgment against your school showing misconduct when you were a student at that school.

What should you do? If you think you qualify, then you should complete the U.S. Department of Education’s Borrower Defense to Repayment application form. Your application must show the details of the misconduct and convince the Department of Education that the school’s misconduct impacted on you sufficiently so that your federal student loans from that school should be forgiven. If they are forgiven, then you will no longer owe them.

How long will it take for a determination to be made? No one knows—it may take a year or more. This is a relatively new program.

Do I need an attorney to help me on this? No, you can do it yourself. The better questions is this: Should you have an attorney help with your BDR application? Yes. Almost always an attorney can help prepare a better detailed and more convincing case for the Department of Education than you can do yourself.

How can I find out more about the Borrower’s Defense to Repayment? Do an internet search for BDR, and then make an appointment with attorney Douglas Triggs to discuss your situation and get student loan legal help.

6. Is an administrative discharge of my federal student loans the same as a bankruptcy discharge?

  No.  An administrative discharge happens pursuant to the U.S. Department of Education’s regulations.  A bankruptcy discharge comes through an actual bankruptcy filing in Bankruptcy Court.  In fact, however, few bankruptcy discharges ever cover student loans.  See question #21 for more information on this.

7. I can’t afford my monthly loan payments. How do I reduce student loan debt?

  Usually you can. You sign up for a federal repayment program that sets the amount of your monthly loan payments based on your current income. If you have no or very low income, your monthly payments may be set as low as zero. Then as your income changes in the future, the amount of your monthly loan payments would also change. Or we could do a federal consolidation loan to consolidate all your various federal student loans into one loan, which could also reduce the size of the monthly payments you have to make.

8. I’m struggling to stay current on my loan payments. How can you help?

  Two ways.  First, as described in the question above, it’s often possible to reduce your monthly loan payments to an amount that you can more easily afford.  And second, we can start planning for the future.  With proper planning, you can become qualified for an administrative forgiveness (discharge) of any federal student loan balance that you still owe at some point in the future.  See question #4 above.  If you have large student loans, this is a case where early planning can have a big payoff later.

9. Life is tough right now. Can I skip a few payments?

  Depending on your circumstances, you may qualify for a forbearance or a deferment of your monthly loan payments. You can often arrange for forbearances by talking directly to the people who service your loans. Deferments usually require that you submit paperwork.

10. I’m months behind. When do my federal student loans go into default?

  Federal student loans go into default when you are 270 days (nine months) behind in your monthly payments. Prior to that time your federal student loans are simply “delinquent.” The difference is very important. When your student loans are simply delinquent, you have more options to catch them up. Once your loans are in default, then collections start, and it can be more difficult to get caught up again.

11. Do I care if my student loan is in default?

  Absolutely, because the consequences are significant. Among other things, once a student loan goes into default, then full payment is due, collection agencies can start calling you, your wages can be garnisheed, and they can take your tax refunds.

12. I’m getting close to the 270 day default deadline. What should I do?

  You should immediately call me to review your options.  Your options are much better before you default on your student loans.

13. My loans are in default, and I’m getting dunned by collection agencies. Is there anything I can do?

  You can often consolidate your loans, or rehabilitate individual student loans. Either of these can cure the default so that the collection agencies will stop calling you. Or, you can sometimes work out a repayment plan with the collection agency. But you should take action now, because student loan collection agencies don’t just go away. They collect and collect until the loan has been paid in full.

14. My loans are in default. I just received a notice of an Administrative Wage Garnishment. Should I ignore it?

  No, because it will soon be followed by the actual wage garnishment.  An AWG will take 15% or more of your disposable income, subject to certain limitations.  AWGs can happen at any time after your federal student loans are in default–no court hearing is necessary.  You get 30 days advance notice, provided your loan servicer has your current address.  If you do get an AWG notice, call me immediately!  An AWG takes your money and reduces your options for dealing with your student loans.

15. I’m self-employed. Does an Administrative Wage Garnishment apply to me?

  No, because you don’t have wages.  But you can still be sued directly on your defaulted student loans.  A resulting  judgment can end up as a lien on your house, a garnishment on your bank account, and other collection remedies.  If you are served court papers for your student loans, same thing: call me immediately!

16. My loans are in default. Can they take my federal tax refund?

  Yes.  They can even take your earned income tax credit, if you are to receive one.  However, there are planning steps we can take to make sure they don’t take future tax refunds.

17. My loans are in default, and I’m on social security. Can they take my social security?

  They can take up to 15% of your SSDI benefits, subject to certain limitations.  They cannot take any part of your SSI benefits.

18. I’m in the military. Does that make a difference?

  You are entitled to defer payments on your federal student loans while on active duty, plus six months.  However, deferring your payments may not be the best option.  And should you receive a disability discharge from the military, it is possible that your federal student loans can be forgiven.  See question #4 above for more information on this.

19. My federal student loans are all over seven years old. Aren’t they too old to be collected from me?

  No.  There is no statute of limitations for federal student loans—they can be collected from you at any time in the future.

20. I went to a school that closed before I could graduate. Do I still have to repay my federal student loans?

  Possibly not.  See your student loan attorney.

21. I never graduated from high school or got a GED. Do I still have to pay for the student loans I received for my later schooling?

  Possibly not.  See your student loan attorney.

22. If I file for bankruptcy, won’t the bankruptcy discharge my student loans?

 Bankruptcy can eliminate a lot of your debts, but it takes a special effort in the bankruptcy (an Adversary Action) asking the bankruptcy judge to decide whether to discharge your student loans too.  The bar for discharging student loans in bankruptcy is high.  Consequently, not many student loans are ever discharged through bankruptcy.  To learn more about student loans in bankruptcy, you should consult with a local bankruptcy attorney.

23. If I die, will my family have to pay my federal student loans?

 No. Should you die, there is no further obligation on your federal student loans. However, there are better ways than death to deal with overwhelming student loans. Talk to your student loan attorney first!!

PRIVATE STUDENT LOANS

Back to Federal Student Loan Questions and Answers

A. Who makes private student loans?

  Private student loans are education loans not guaranteed by the U.S. Department of Education. Private student loans come from banks, Sallie Mae, and sometimes directly from trade, vocational, or other for-profit schools. (However, Perkins Loans, which are also disbursed by schools, are federal loans.)

B. What’s the difference between private and federal student loans?

  Private loans are regular debts, like credit card debts.  Like credit card debts, private student loans go into default immediately when you miss the first payment.  There is no 270-day “grace” period, as there is with federal student loans.  Once you miss that first payment, collections can start immediately.  It’s extremely unusual for private student loans to have any of the many helpful provisions of the federal student loan program, such as reduced payments, consolidations, rehabilitations, or future loan forgiveness.  Private student loans usually have higher rates of interest and often require co-signers.

C. I don’t know what private student loans I have. Where can I find this information?

  Unlike federal student loans, there is no one location you can go to find a listing of all your private student loans.  You need to gather together all the paperwork you signed when you took out your private student loans.  Review your checkbook to see what private loans you have been paying.  Check your credit report if you think you are forgetting any of these loans.  Then, if you don’t have all your original paperwork on these private loans, request it from the people that you are paying.

D. Are there advantages with private loans over federal loans in terms of collections?

Amazingly, yes–there are three advantages.  One is that private student loans are subject to state Statute of Limitations (SOL).  That means these debts can’t be collected after a certain period of time.  Simple to say, but there are issues.  For example, suppose you signed the loan papers in Colorado, went to college in California, and the loan was with a New York bank—which state’s SOL applies?  Quick answer: the loan paperwork (written by the lender) tells you.  A second interesting issue: when exactly does the time start for SOL purposes?

A second advantage is that private loan holders and their collection agencies, unlike the federal government, do not have the Automatic Wage Garnishment available to them.  Instead, private loan holders must first take you to court before they can do a garnishment of your wages.  Because that costs them money, private loan holders often use wage garnishments as a last resort.

The third advantage is that private loan holders can’t take your federal tax refund, and they can’t offset against your social security income.

E. If I’m having problems making my private student loan payments, what options do I have?

  First, read the promissory note and other papers that you signed with the lender.  There may be options stated there (but it’s unlikely).  Second, call the lender (or the collection agency) to see if they have options available.   Sometimes private lenders offer deferments and forbearances, although they usually charge a fee to do this.   Sometimes they can point you to companies that offer a consolidation loan for private student loans, but that usually requires you to pay even higher interest rates.  And if you become disabled, occasionally they will offer to cancel the loan.

F. My lender says that they have charged off my private student loan. Does that mean I don’t owe it anymore?

  Most lenders will charge off a loan when your payments are behind more than 120 days (4 months).  After charge-off, the loan is turned over to a collection agency.  The bad news: you still owe the debt.  At that point, you will be working with the collection agency.  And maybe, provided you have adequate resources, you can offer a lesser amount to the collection agency to settle out the debt.  Or the collection agency may take smaller payments.

G. Can a student loan attorney help me if I’m behind on my private student loans?

  There are few options available to help with your private loans.  A student loan attorney can advise you as to your situation and possible options, can talk on your behalf with the private lender, and can negotiate with the collection agency.  Federal student loans are much easier to work with.

OTHER QUESTIONS

Back to Federal Student Loan Questions and Answers

1. My student loan problems aren’t a crisis yet. Why not just wait?

  The sooner you act, the more (and better) options you will have. Often people wait until their paychecks are being garnisheed for their past-due student loans. At that point, the options are very limited and difficult.

2. Am I required to have an attorney to help with my student loan problems?

  Absolutely not. There is an overwhelming amount of information available on the internet. For federal student loans I particularly recommend the free government website https://studentaid.ed.gov. However, many people find that an experienced student loan attorney can help them find and understand the most relevant information, and then take the proper steps to help resolve their problems.

3. I want to file a complaint against my student loan debt collectors. Where should I go?

4. I just got sued for my student loans. Can Doug Triggs help me with this lawsuit?

No. Doug Triggs does student loan administrative law. He does not represent people in court suits or bankruptcies.