When you’re struggling with student loan debt, it can sometimes be difficult to know where to go for help. While you can do most things with your federal student loans for free StudentAid.govmany borrowers choose to search for “professional help.” And while there are services that can help you pay off your student loan debt, how do you know when it’s not enough? How do you know when you might need a lawyer for your student loan debt?
The truth is that most issues related to your student loan debt do not require the services of an attorney. For many things, like changing your payment plan or applying for student loan forgiveness programs, you can fill out the paperwork or online form yourself.
However, there are scenarios where it can be very beneficial to pay an attorney to get help with your student loans. For example, what if your lender is suing you for defaulting? This is a situation where you definitely need professional legal help.
Here are some other scenarios where you might consider getting a lawyer for your student loan debt. Plus, we answer some frequently asked questions with the help of a real student loan debt attorney.
The difference between an attorney and other student loan debt assistance
First, it’s important to distinguish between paid assistance for your student loan debt and legal assistance for your student loan debt. Many borrowers who need help fall into the first category—they’re just looking for professional advice on their student loan situation.
There are companies you can pay to help you with this. Just make sure you fully understand what you’re paying for. When hiring any professional service related to your finances, you want to be clear about what is expected, what the payment will be, and follow up to make sure everything is done correctly.
If you’re paying for assistance, do your research to avoid student loan scams. Unfortunately, there are a lot of companies that fall prey to borrowers asking for help with their student loans, so make sure you’re not being taken advantage of. Here’s a guide we wrote to determine if a student loan assistance company is a scam, and big red flags to look for.
If you need more than just help determining your payment plan, you may need legal help. Let’s take a look at when legal assistance might make sense.
When does it make sense to find a lawyer for your student loan problem?
It’s important to remember that every situation is different, and your contact with a student loan attorney really depends on your unique situation.
According to Adam Minsky, A Student loan attorneyFinding representation may be useful in the following situations:
- If you are dealing with a difficult or complex issue such as a dispute with a loan servicer, or you are being harassed by a debt collection agency.
- If you have been sued in court and want legal advice and representation.
- If you are unsure of your options or legal rights regarding a particular student loan matter, such as eligibility for student loan repayment or forgiveness, or what your options and strategy are regarding a defaulted student loan.
- If you’re feeling overwhelmed by your student loan problem and want some guidance to make sense of it all.
A good rule of thumb to follow is to ask yourself whether you can do it yourself, or do you feel you need an advocate to work on your behalf to solve the problem.
What Lawyer Can Help You with Your Student Loans?
So, now that you know when it might make sense to talk to a lawyer, what can a lawyer do for you that you can’t do yourself?
First, according to Adam Minsky, it’s important to remember how different lawyers are from student loan assistance companies. Lawyers are a regulated profession, supervised by state licensing boards (called a “bar”) and bound by strict rules about confidentiality and obligations to serve their clients. In other words, lawyers are accountable not only to you, but also to the bar association in their state. This provides you with a lot of protection and recourse if you are subjected to abuse or fraud, compared to unlicensed companies and organizations.
On the other hand, some non-legal consulting firms may be able to provide some general assistance, especially when it comes to standardized forms and applications for the more common federal student loan programs. But they may not always be equipped to understand the nuances of the student loan system, troubleshoot when an unexpected error or problem occurs, or advise their clients appropriately when there are unique circumstances. Advisory firms are also very limited in what they can do for borrowers who are in collections or being sued, as practicing law is a crime for non-lawyers.
An attorney will typically help with the following when it comes to student loan debt:
- Advice and advice regarding your legal rights and student loan options.
- Direct representation and advocacy in communications with student loan lenders, servicers, debt collection agencies, credit bureaus, dispute boards, and other relevant entities.
- Negotiations with student loan lenders, servicers, and debt collection agencies to obtain the desired resolution.
- Assist in preparing, completing, and reviewing student loan related documents such as program applications, letters, correspondence, and contractual agreements (such as student loan rehabilitation or settlement agreements).
- Representation in court to defend you against a student loan collection lawsuit or to pursue companies that have harmed you.
how much does it cost?
This may be the scariest part of working with a student loan borrower attorney. How much will you have to pay and is it worth it? Since student loan borrowers are already in debt, many feel that paying an attorney for help does not make sense.
However, it is important for borrowers to know that there are a variety of fee structures and ways to pay an attorney so it makes financial sense.
There are four basic fee structures for working with an attorney.
1. Consultation fees: You may be able to pay an attorney for a limited session to get advice or advice, or to get help with a specific issue (such as reviewing a settlement agreement or looking at a credit report). Fees depend on location, length of consultation and the attorney’s price.
2. Hourly fees/representation: This is the most traditional type of attorney-client fee arrangement and involves paying for the attorney’s time at the attorney’s hourly rate. The client typically pays an initial “retainer” — also known as an advance fee deposit — to cover a certain amount of billable time up front (say $5,000 or $10,000). The lawyer then withdraws this power of attorney when he completes the relevant requests. If the retainer is not exhausted when the order expires, the balance is returned to the customer. If the retainer is exhausted, the customer may have to renew the retainer. The size of the retainer and the number of billable hours for the case really depends. For example, defending a collection claim may take significantly more billable hours than assisting with a loan consolidation application.
3. Fixed fees: Some attorneys offer specific services for a set fee, regardless of how long it takes the attorney to complete the service. This is also known as project-based work. This can provide some protection to the customer, so that if it takes longer than expected, the customer is not on the hook for additional fees. But the fee will likely only cover the specific task or set of tasks the lawyer is hired to do. A good example of this is completing an income-based reimbursement application.
4. Emergency: For certain types of cases, an attorney may be able to take on a case on a contingency fee basis – where he only charges a fee if he prevails in the case through a judgment or settlement. A contingency fee arrangement is only available for specific types of cases, such as consumer rights lawsuits against third-party debt collectors or other similar companies for violating specific laws. Often times, these laws allow for something called “fee-shifting,” where the losing side is legally required to pay the winner’s attorney fees. An attorney will only take on a case on a contingency fee basis if there is a strong claim under one of these laws and he or she believes there is a strong likelihood of success in court.
How Do You Find a Reputable Student Loan Debt Lawyer?
So, if you think hiring an attorney is the best route for your student loan case, how do you find a reputable one? This can be particularly challenging since many borrowers are not familiar with the law and how the process works.
Furthermore, it is unfortunate that there are so few attorneys with experience in student loan law. Minsky recommends that borrowers seeking an attorney for their student loan debt do the following:
- Check the guide for National Consumer Advocacy Association (NACA). NACA is a bar association for attorneys who represent consumers and borrowers only, and you can search for local attorneys who list “student loans” as a practice area.
- Contact your state bar association for a referral (many state bar associations have referral services).
- Search for lawyers on platforms like Affuwhich has attorney profiles. Avvo also provides a record of client reviews and peer endorsements, which can be helpful in selecting an attorney.
- Once you find an attorney you may want to work with, check the attorney with your state bar association to see if that attorney has any record of public discipline.
- Do a Google search for that attorney to see if their name comes up in a good way (for example, through the press or publications) or in a bad way (such as being sued by a government agency or regulatory body for misconduct).
Final thoughts
Dealing with a difficult student loan situation can be difficult. Not only is it financially draining, it can be extremely difficult on an emotional level.
If you find yourself needing professional help with your student loan debt, make sure you consider whether an attorney is the right choice. Depending on your situation, it may make a lot of sense to seek out an attorney for your student loan debt.
Have you ever received help from an attorney with your student loan debt?
