Miami Student Loan Debt Attorney
Miami Student Loan Debt
Dealing with student loan debt is often discouraging, and keeping up on payments can be difficult. But sometimes, student loan problems are complicated by circumstances such as a closed school or a private student loan. Knowing what to do if you are unable to maintain your payment schedule can be difficult, but an attorney can work with you and your creditor, whether it is a private lender or a governmental agency, to create a reasonable repayment plan. Call our Miami student loan debt attorney experienced in dealing with student loans today.
Every year, millions of people take out loans to attend college with the expectation of a good job upon graduation to allow them to repay their debt. But life’s plans do not always work out, and some graduates are left unable to afford to repay their loans. Defaulting on your student loan debt can cause a multitude of problems, from difficulty in getting a mortgage or passing a credit check, to garnishment of wages, to harassment by collection agencies. Dealing with special circumstances, such as closed schools or private loans, makes it even more difficult to successfully pay off loans.
Dade Medical College a for-profit school with six campuses across Florida, closed in October, 2015. Investigators cited problems with the school’s finances and with poor student performance on certification exams. The Florida Department of Education is working to place the college’s students in different schools with similar programs.
The Dade Medical College problem has many parallels to the 2014 closing of Corinthian Colleges. Corinthian Colleges was one of the largest for-profit schools in the United States, but after an investigation, some of its schools were closed while others were sold. The federal government has discharged much of former students’ student loan debt. Under the plan, students who attend schools that close are entitled to debt relief, and a streamlined process is created to deal with the debt of students whose schools are sold and who believe that they were the victims of fraud.
If your school closes before you have the chance to earn a degree, there may be options for the discharge of your debt. An experienced attorney can help you explore those options.
Private Student Loan Debt
Most student loans are federal, meaning that they are backed by the federal government. But some are private, and are issued by private banks, such as Band of America or Citigroup, or by student loan lenders, like National Collegiate Trust or Navient. Private loans often have higher interest rates, making repayment after graduation more difficult.
Federal loans have a nine-month delinquency period before entering default, but if you have a private loan, missing a payment may mean default. In default, a lender may be able to garnish your wages, place a lien on your property, or put a levy on your bank accounts.
If you cannot afford your loan payments and are in danger of going into default, an attorney can help you renegotiate your loans or get your loans deferred until you find suitable employment.
Consequences of Default
The effects of a student loan debt default can be devastating. The consequences include:
- The default showing up on credit reports and damaging your credit rating, making it harder to get a mortgage or car loan;
- Garnishing wages;
- The loss of eligibility for future student loans; and
- The loss of state and federal tax refunds.
If you meet certain criteria, you may be able to get your loan deferred, or postponed. Eligibility criteria include economic hardship, unemployment, disability, military service, and other circumstances.
Discharging student loans in bankruptcy is very difficult. The debtor must show that repayment would create an undue hardship on the debtor or on his or her dependents. This generally means that you are not be able to maintain minimal standards of living, and this is unlikely to change during the repayment period. But you may be able to get loans discharged out of the bankruptcy context.
If you have federal student loans, you may be eligible to get them discharged under certain circumstances. For example, if you work for ten years in government, public health, public education, or law enforcement, you may be eligible for Public Service Loan Forgiveness. Full and permanent disability can also mean that a person is eligible for discharge.
Even if you are not eligible for discharge, if you are in danger of defaulting on your loans, you may qualify for a repayment plan based on your income, number of dependents, and state of residence. If you qualify for a repayment plan, your monthly payments will be lowered, and often will be capped at ten or 15 percent of your discretionary income. Eventually, if you comply with the plan and meet certain requirements, any unpaid balance of the loan may be forgiven.
Private student loans are not eligible for the government programs that deal with federal loans. But an attorney may be able to help you negotiate with your lending institution to make your payments affordable. Banks and other student loan lenders have an interest in receiving your loan payments, so they may be willing to negotiate to ensure that you are financially able to pay.
Sometimes, federal and private loans may be consolidated to lower monthly payments. Loan consolidation means combining loans into a single loan and refinancing. Consolidation for private loans is only available from a few private lending institutions. Consolidation of federal loans may also make them eligible for certain repayment plans.
There are many options for dealing with your student loan debt, so it is important to contact an attorney, whether you have fallen behind in your payments or fear that you will soon do so. Please contact Miami student loan debt attorney Julia Kefalinos for an initial consultation.