Student Loan Law in Pennsylvania
Are you struggling with Student Loans? Are you looking to get out of Default or Delinquency? Can’t make the monthly payment? Are you facing an Administrative Wage Garnishment? Perhaps you are being sued by National Collegiate Student Loan Trust or another private loan lender? These are just some of the student loan issues that we deal with at Morrow & Artim, P.C.
First, you need to face the facts. Student loans are a confusing issue to almost everyone. There are federal loans, private loans, Perkins loans, Plus loans. Which is which? Which ones do I have? Frankly, there aren’t many people who do understand the complexities of student loans. If you’ve been searching for a student loan lawyer, you know that there aren’t many to choose from. That’s because of the difficult and confusing nature of the student loan business. Fortunately, we have the experience and knowledge to assist with almost any student loan law issue that you may face in Pennsylvania.
What Can a Student Loan Attorney Do?
Once you are represented by an attorney on any collection case, the collector cannot call you directly. The collector must contact your attorney. If they do contact you directly once you are represented by counsel, that is a violation of the Fair Debt Collection Practices Act and you may have the right to sue them.
National Collegiate Student Loan Trust files dozens of lawsuits across the country every day on old private student loans. A good consumer attorney can help you beat them in court in most cases. A few other companies have recently started filing student loan matters as well, including CACH, Jefferson Capital and Educap. We can assist in defending these lawsuits with positive results for our clients.
We can help you get into an Income Driven Repayment Program such as IBR, ICR, PAYE or REPAYE. We can walk you through the steps of seeing which programs you qualify for and which one is best for your situation.
Defaulting on a federal student loan is a serious problem that requires serious answers. We can guide you along the way using one of several avenues to get out of default. Consolidation and Rehabilitation are two of these options, then transferring into an Income Driven Repayment Program.
There are several programs that might qualify one for Student Loan Forgiveness. There is a discharge program based upon issues with the school or your health. There are programs for those who work for non-profit organizations, including government, healthcare and many education workers.
Nobody wants to have their wages garnished. If you default on federal Student Loans, the government doesn’t even have to sue you to start a garnishment. There are ways to avoid or get out from under a garnishment. We’re here to assist you in this endeavor.
Types of Student Loans
Federal Loans are the “good” types of student loans. Money for Federal Loans now comes directly from the Department of Education through what is called a “Direct Loan”. When repayment starts, payments are made directly to the Department of Education or one of its servicers. If you have federal loans that originated earlier than 2010, they you likely have FFEL loans (Federal Family Education Loan Program). These loans were offered through private lenders and were guaranteed by the federal government. Repayment of the loans is made to the lender or one of its servicers. If the borrower fails to pay and enters “default” status, then a guarantee agency will take over the loan. If the loan remains in default, the Department of Education will take over the loan.
Federal loans do not require a co-signor as they are not based upon credit worthiness. As stated above, federal loans are “good” loans to have. If you are unable to make repayment under the specified terms, there are several repayment options available including ICR, IBR, PAYE and REPAYE.
Private loans are loans that are offered by private banks and they are based upon credit worthiness. These are similar to any other contract that you may enter into, be it a car loan, credit card or mortgage. Private loans, for the most part, do not have income based repayment programs if you cannot make the specified payment. That is, the loan terms are the loan terms and they will not change based upon how much or how little you make upon graduation. These types of loans are very difficult to deal with.
Perkins Loans are offered directly by the school that you are attending. Repayment is made directly to the school. These loans are also “federal” loans and are backed by the Department of Education. If you default, the school can transfer the loan to ED for collection. Most Perkins Loans are for smaller amounts.
Plus Loans are also federal loans. They are available to parents of undergraduate students or directly to graduate students. These loans are meant to cover the difference between what you can get in Direct Loans and the cost of attendance. These loans are based upon creditworthiness and are the only federal loans that require good credit.
Student Loan Delinquency and Default
You are in “Delinquency” on a federal student loan if you have failed to make a single payment. You may hear from debt collectors for the lender/servicer if this occurs. You are in “Default” if you have failed to make a payment for 270 days. Default is very serious as it gives the debt collector much more power to do things like Administrative Wage Garnishment or Tax Refund Intercept.
How Can I Get Out of Delinquency or Default?
There are several options to get out of delinquency and default. For Delinquency only, you can request a deferment. (This may not be the best option, but it is an option). A deferment is simply a way for you to “skip” a few payments to get your finances in order. You can qualify for a deferment if you are unemployed for more than 6 months, if you receive federal or state public assistance, or if you are in the military. Please note that interest will continue to accrue on the loan while you are in deferment.
Consolidation is a way to take all (or a grouping) of your federal student loans and combine them into one Direct Loan. Its a fairly quick process, approximately 30-90 days, and it can prepare you to enter one of the federal Income Driven Repayment Programs which may allow you to substantially lower your payments. If you are in Default and you Consolidate, collection fees of up to 18.5% are added to the loan.
Rehabilitation is just what it sounds like, you “rehabilitate” the loan out of default. This can be done by making 9 on time payments over a 10 month period. These on time payments can be made at a lower payment rate if you qualify under the program. Rehabilitation also cures the negative mark on your credit report. If you happen to be in Administrative Wage Garnishment, the garnishment will stop after 5 monthly payments are made.
Having issues with Student Loans? If you’re facing a private student loan lawsuit, we offer a free consultation. If you’re looking for help with federal loan repayment, there is a small consultation fee. Contact our office at 412-823-8003.