Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog

Part II:  What can people do when they have private student loan debt?

Private loans don’t have any government programs like federal loans do – payments are not based upon income, there is no debt forgiveness and no protections for someone who becomes disabled and cannot work.  However, they will settle.  They key is to put them in the position of wanting or having to settle.  How we do this is we help our client track consumer collection law violations.

How many times do they call you a day?  Do they call your cell phone after you’ve told them not to?  Do they call you at work after you’ve told them not to?  Do they call before 8:00 a.m. or after 9:00 p.m.?  Do they discuss your debt with third parties?  All of that is potentially illegal under the FDCPA, FCCPA and the TCPA and provides us with leverage to settle a debt and ways to escalate the conversation to a decision maker with higher authority to negotiate a settlement.

The tax landscape for student loan forgiveness is constantly shifting.  Earlier this year we blogged about disability discharges of federal student loan debt no longer considered taxable.  Discharges in bankruptcy for either federal loans under a Brunner challenge or non-qualified private student loans that don’t meet the definitions for discharge protection are both non-taxable events.

The Public Service Loan Forgiveness program for federal loans also provides a tax free total forgiveness after ten years of qualifying payments.  Talk to us if you have questions about whether your loans qualify, your employment qualifies, or your payments qualify.  There are sticky questions that may prevent relief after years of payments if done wrong.

The IRS also allows for tax relief for taxpayers who took out federal student loans for attendance at Corinthian Colleges and other schools owned by American Career Institutes (ACI) and were granted a discharge under the Defense to Repayment program.

Just now, I got off the phone with a very sophisticated potential client who is facing a garnishment for his federal loans.  This was a very intelligent person and well respected in his field, but he didn’t really know much about how the student loan system worked.  His closing comment to me before we ended the call was “What a productive phone call!”  I often hear “I wish I had called you years ago, I’d be that much further ahead”.

I mention this because due to high demand, we now have to charge for our student loan consultations – $175.

But we offer a Guarantee:

Matt Taibbi with Rolling Stone, wrote a recent piece called “The Great College Loan Swindle” that outlines how we got here.  It started with sales pitches that colleges make to kids – comparisons of salaries of those with high school diplomas to those with 4 yr degrees.  The value of that degree over a lifetime of earnings.  Investing in yourself was a common phrase used by for-profit colleges.  It creates a vicious cycle, everyone feels obligated to go to college, most everyone who can go does, and then you have a glut of graduates which is where we are now.  And this isn’t limited to just the student.  Parents wanting to help their kids every way they can, co-sign on loans they cannot possibly repay, or sign their own loans called Parent Plus loans.  Parent Plus loans do not take into consideration the income and employability of the parent or grandparent who applies for the loan.  Not surprisingly, Parent Plus loans have been cited by the CFPB as having extremely high default rates.

So Step 1, convince everyone a college degree is necessary in life.

Step 2: make it easy to borrow the money.