Questions About Student Loans in New York

When and why do students get loans?

With the high cost of tuition and expenses and both public and private universities, many students must borrow student loans to finance their education. For some students, federal student loans do not cover the full cost, so they resort to borrowing private student loans. Private borrowers with sub-par credit may be required to have a co-signer in order to become eligible. This creates a situation where a family member or friend becomes equally liable on the borrowers loan in the event of default.

Why aren't people able to pay off their student loans ?

There are many reasons why people fall behind on their student loan obligations. For recent graduates, it may be difficult to find employment that offers enough compensation to cover the monthly loan payments. Even for graduates that find employment in their field of study, the income oftentimes still does not cover the minimum repayment on the loans. Some people never complete the education for a variety of reasons. Private student loans do not offer the same grace period, deferment, and forbearance options which are available on most federal loans.


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Student Debt Relief

What to do when sued for student loan debt?

Private lenders are bringing large amounts of lawsuits against student loan borrowers and their co-signers. Responding promptly, and in accordance with New York Civil Procedure, is the first step to ensuring that a default judgment is avoided. Analyzing the Plaintiff's evidence can help identify possible points of contention, which can increase the leverage to negotiate a lawsuit settlement. It's important to defend student loan cases vigorously in order to ensure that the borrowers rights are being fully asserted.

Can I settle my student loans?

If a student loan has been assigned to a collection agency, there is a possibility that the loans can be negotiated. Depending on the circumstances, sometimes private student loans can be settled for a substantial reduction. Examples of private lenders and assignees are: Navient, Wells Fargo, United Guaranty, Jefferson Capital, Cach, llc and Arrowood Indemnity. However, when settlements on government loans are approved, they are oftentimes limited to discounting a portion of the interest and collection fees, and as such, the savings may not be sizable.

Who is the best student loan lawyer?

The best lawyer for your student loans is an attorney that has the perspective and track-record of resolving loan problems that parallel your situation. Attorneys oftentimes specialize in different areas. For example, an attorney that is well versed in defending lawsuits might not be in the business of negotiating pre-litigation settlements, and vice versa. At the Law Office of Simon Goldenberg PLLC, we regularly assist people across New York with defending collection lawsuits, negotiating settlements in all phases of default (pre-litigation, in litigation, and post-litigation), as well as navigating options to resolve defaulted federal loans. Our numerous client reviews speak to the great work that we do, and we also offer flexible payment plans where possible. When choosing the best student debt lawyer, it's not only important to be attuned to the cost of the legal fee, but it's also very important to make sure that you are working with a law firm that has an excellent reputation in the area of student debt relief.

What is a student loan rehabilitation?

When a federal loan is in default, a rehabilitation program may be available to put the loan back into positive status. These programs oftentimes require the borrower to voluntarily make 9 consecutive monthly payments over a 10-month period. In situations where an administrative wage garnisgment has already commenced, the borrower may be required to make the rehabilitation payments in addition to the garnishment for a period of at least 5 months.

What is a student loan consolidation?

The William D. Ford federal direct loan program allows the consolidation of elegible FFEL and Direct loans. In the consolidation, the original loans are paid off and a new loan is created. The new interest rate is calculated in part as a weighted-average of the prior loans. There are certain banks that offer consolidation for private student loans, however, the benefits of such private consolidation can be questionable.

What is a federal student loan?

As opposed to a private loan which is issued by private banks such as Chase, Citibank, Wells Fargo, and Sallie Mae, federal loans are usually issued through the Department of Education. However, FFEL loans are government-guaranteed loans which were issued and disbursed by private lenders. Distinguishing the type of student loan may require a review of credit report, statement, and/or the underlying loan documents.

Can I be garnished for student loans?

Private loans can be collected through wage garnishment only after a lawsuit has been brought and a judgment has been entered. However, most government-back loans have no statute of limitation, and are not required to obtain a court-order prior to instituting a wage garnishment. Even worse, once an administative wage garnishment has been commenced, the options to stop the garnishment and resolve the loans may be limited.

Why do I need a student loan lawyer in New York?

Only a lawyer licensed to practice law in the State of New York can give legal advice to New Yorkers. Those out of state debt relief companies can't do much to assist with those debts that reach legal status. A New York student loan lawyer can help you identify what kinds of loans you have, and help determine your available options for resolution. Trust our experienced attorneys to help guide you towards the best resolution possible in your situation.

What is the Federal Student Aid Ombudsman?

Although our lawyers are vastly experienced in resolving various issues pertaining to defaulted student loans, we cannot necessarily help in every situation. The Federal Student Aid Ombudsman is a neutral group that was created to help resolve disputes on federal student loans. Contacting them is confidential. They have the authority to communicate with loan servicers to rectify errors. The ombudsman can be a valuable resource for resolving legitimate loan disputes.

What are the student loan payment plans?

Federal loans allow for several payment plans such as: standard, graduated, and extended. They also offer "income driven" repayment plans such as Income-based repayment, Pay-As-You-Earn, Modified IBR, and an Income-Contingent Repayment Plan. Not all loans will qualify for all payment options. For example, the PAYE program is limited to individuals that did not have any outstanding federal student loans prior to 10/1/2007.

What is an income based repayment plan?

IBR allows for the monthly payment to be calculated as 15% of the borrowers discretionary income, and requires annual requalification and review of the prior years income. Most people submit their most recent tax returns in order for the income-based payment to be established. Benefits of the IBR payment plan is that it can help make the monthly payments more affordable, and allows for a residual forgiveness after sufficient qualifying payments have been made.

Student Loan Lawsuits

How to fight a student loan lawsuit?

First, an Answer must be served and then filed with the Court. The Answer should include responses to the allegations in the complaint, any pertinent affirmative defense, and then assert counterclaims (if any). Failure to include certain defenses in the Answer may preclue those defenses from being asserted later on in the litigation. The next steps include requesting and reviewing Discovery material, including Interogatories, Notices to Admit, and Demand for Production of Documents. If merited, a Motion to Dismiss may be brought.

What is the New York Statute of Limitations on Student Loan Lawsuits?

Lawsuits brought to collect private student loans in New York are normally subject to the 6-year statute for breach of written contract. However, if the entity bringing the lawsuit was assigned the debt after it was defaulted, then New York courts may require that the action be brought within the SOL of the state where the claim arose, if that state has a shorter SOL. When a lawsuit is commenced beyond the applicable statute of limitations, the borrower might have a defense worthy of dismissing the entire case. Unfortunately, due to changes in the Higher Education Act, government-backed loans are not subject to time restrictions for litigating collection actions.

Can I settle with National Collegiate Student Loan Trust?

Our lawyers have helped numerous borrowers resolve their student loan debts with National Collegiate Trust. We've negotiated settlements on defaulted loans that are in all status', including pre-litigation negotiations, litigation defense, and post-litigation (judgment) resolution. When traditional collection methods fail, National Collegiate frequently retains the assistance of local collection attorneys to bring lawsuits against the borrowers. Contact our firm if your faced with legal action for a private student loan in NY or NJ.

Eliminating Student Debt

Can I discharge student loans due to school closing?

Yes, under certain circumstances some federal student loans can be discharged if a school closes while a student is enrolled and the students ability to complete the program is deprived. However, if the student transfers credits from the closed school to another school with a similar program, the borrower might lose elegibility for school-closure discharge. If the discharge application is denied, the borrower would need to elect a payment plan and make payments thereto in order to avoid potentially defaulting.

Do I qualify for student loan forgiveness?

Several loan forgiveness programs exist such as Public Service Loan Forgiveness, Teacher Loan Forgiveness, and a discharge available to qualified veterans and individuals that can substantiate a Total and Permanent Disability. Teacher forgiveness can become available after 5-years of qualified employment.

What is Public Service Loan Forgiveness?

PSLF can be available to qualified public service workers whom have made 120 payments over a period of at least 10-years. Public sector and those that are employed full-time by not-for-profits may apply. Only payments made after 10/1/2007 may be considered.

Can I get a student loan disability discharge?

Most federal student loans offer a mechanism that allows for a discharge of the student loan obligations upon establishing that the individual is Totally and Permanently Disabled. There are several routes to establish such disability, such as a physicians certification, or a qualifying history of disability with the Social Security Administration. There is a 3-year probationary period following a discharge which required the borrower to certify that their income levels fall under a particular threshold.

What is the difference between Tuition Debt and a Student Loan?

In order to obtain a student loan, the borrower would usually complete an application process, and upon approval, the loan would be disbursed to the educational institution or directly to the borrower. In comparison, a tuition debt is incurred where a student enrolls in a course but fails to pay for the credits. Tution debt can sometimes accrue when a student registers for courses, but their financial aid is denied, or the student loans do not sufficiently cover the costs of the amount due. Tuition debt is not a student loan, and therefore, it can be sometimed be discharged in Bankruptcy (especially in situations where it's a private school, and not a City or State College).

Do you have further questions about student loans?

Contact our law office for a free initial evaluation, or, take aggressive action today by retaining the services of our firm. Our dedicated debt relief lawyers assist with resolving defaulted student loans across New York and New Jersey. Contact the Law Office of Simon Goldenberg, PLLC for the representation you deserve!

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