The Law Offices of Lee M. Perlman specialize in areas of New Jersey Bankruptcy and legal issues resulting from student loan debt. If you have questions about excessive student loan debt and related legal concerns, please contact us or call our office – (856) 751-4224 – right away.
What loans are eligible for Public Service Loan Forgiveness?
Federal Direct Subsidized Stafford/Direct Loans
Federal Direct Unsubsidized Stafford/Direct Loans
Federal Direct PLUS Loans
Federal Direct Consolidation Loans
Public Service Loan Forgiveness
What is Public Service Loan Forgiveness?
This program is a federal program that assists those working in public service jobs, non-profits, etc. manage their debt loan through forgiveness after 120 payments or ten years.
Can I get my federal loan forgiven if I become a teacher?
Yes.
- You must have 10 years of “qualifying payments”
- Become a public school teacher in a low income area
- You cannot have loans that originated prior to October 1, 1998
- Your loans must not be in default
- You must work as a teacher for 5 consecutive years
- You must be a qualified teacher which means obtaining state certification and holding a license in the state you teach in
Can I get my loans forgiven if I join the military?
Yes
What other areas can I work in to get my student loan forgiven?
Get a public service, government or non profit job, a 501 (c)(3) entity
What are some other ways to get my student loans forgiven in the working world?
Student loan cancellation programs in some cases mean school closure, false certifications or unpaid refunds
What specific loans are eligible for Public Service Loan Forgiveness?
Federal Direct Subsidized Stafford/Direct Loans
Federal Direct Unsubsidized Stafford/Direct Loans
Federal Direct PLUS Loans
Federal Direct Consolidation Loans
Apply for the IBR, income based repayment plan
What is the IBR income based repayment and IDR income driven repayment?
Income based repayment or IBR is the most widely available income-driven repayment (IDR) plan for federal student loans that has been available since 2009. Income driven repayment plans can assist borrowers
with payment terms based on present salary and their household size.
I feel so overwhelmed with my student loan loans, I want to try to pay them off but I do not know where to start?
One known and proven method is called the “debt avalanche method“:
- List your student loans from highest interest rate to lowest interest rate
- Pay the minimum payments on all debt except those with the highest interest rate
- At the end of the week or month however you pay your bills anything extra you can afford must go towards the highest interest student loan
- Once you have paid something off begin with the second highest interest rate account and repeat above!
What does it mean to consolidate my student loans?
Consolidating your student loans means combining multiple loans into one loan. Typically, people consolidate their loans to simplify monthly payments or get new repayment terms.
Loan consolidation isn’t a good idea for everyone. Whether consolidating helps you depends on factors like what type of loans you have, their interest rates, when you took them out, and whether they came with benefits you wouldn’t want to lose. When you consolidate your loans, you get a brand new loan with new terms.
Consolidating federal students is free. Private loans have to be consolidated with a private lender. There might be a cost, but avoid companies that tell you to pay up-front fees. Some debt relief companies and lenders offer to consolidate federal and private loans together into one new loan to lower your monthly payments or interest rate. Understand that, if they do, you’ll lose any benefits and protections offered by your federal loans.
Before you consolidate your loans, find out what it could mean for your specific situation. If you have private loans, talk to your loan servicer. For federal loans, call the Department of Education’s Loan Consolidation Information Call Center at 1-800-557-7392.
I am researching student loan options how do I know if I come across a scam?
You shouldn’t have to pay an up-front fee.
Only scammers will tell you to stop paying your student loans.
Sometimes scammers will tell you not to speak with your loan servicer — supposedly so the company can negotiate a better settlement for you. But not paying student loans can damage your credit, and your loan balances could balloon. And there’s no guarantee the company will be able to get a settlement, or that the settlement will save you much.
A Department of Education seal does NOT mean it is legitimate.
Scammers use official-looking names, seals and logos, and tell you they have special access to certain repayment plans, new federal loan consolidations, or loan forgiveness programs. If you have federal loans, go to the Department of Education directly at StudentAid.gov.
You have time to check out your options.
To get you to act fast, scammers tell you that you could miss qualifying for repayment plans, loan consolidations, or loan forgiveness programs if you don’t sign up right away. Don’t be rushed into a bad decision.
How do I report a scam?
To report a student loan debt relief scam, file a complaint with:
- the FTC at ftc.gov/complaint
- the CFPB at consumerfinance.gov/complaint
I am being sued by my student loan provider, do I have defenses?
If you default on your student loans the creditor will sue you. You will receive a pleading also known as a complaint.
- You should and must share this with a lawyer since replying is time sensitive.
- You also could need a lawyer to raise possible defenses. The answer must be formally and properly filed or you risk having the court deny or strike your answer, losing your defenses.
- Some examples could include but are not limited to:
- You never agreed to pay the debt: for example, identity theft
- You are not behind, you are contractually current!
- The debt has been discharged in bankruptcy
- The loan was cancelled since the school closed and you could not finish your degree
- The creditor waited to too long to sue you or you have a statute of limitations defense
- The creditor failed to document their loan with correct paperwork
Should I see a lawyer?
If you have been served with legal papers, for example a complaint you should see a lawyer right away. This is, as outlined above a time-sensitive document.
How can I get my students loans discharged in bankruptcy?You will have to show a standard called undue hardship
- You will have to prove that student loans create “undue hardship.”
- The law firm must file a separate lawsuit in bankruptcy called an adversary proceeding
- Most courts use the Brunner Test to determine what an undue hardship is.
- Under most cases some things courts look for to be successful here:
- You wouldn’t be able to maintain a minimal standard of living if you were forced to repay the loan
- Your financial hardship would continue for a significant portion of the repayment period if you were forced to repay the loan
- You’ve made a good-faith effort to repay the loan before you filed for bankruptcy.
