Student Loan Lawyer
Posted On behalf of Pfeifer Morgan & Stesiak on Aug 31, 2021 in Consumer Protection
Student loan servicing companies are contracted by the U.S. Department of Education to administer loans to student borrowers across the country. These servicers are required to comply with all federal regulations while assisting borrowers with processing payments, implementing repayment plans and more. Yet some well-known student loan servicers are now being named in class action lawsuits for misleading borrowers and other deceptive practices.
At Pfeifer Morgan & Stesiak, we have extensive knowledge of the federal laws that apply to student loans. We also understand your rights as a borrower and how to protect you from the unfair and unethical practices some student loan servicers may use. Our team of legal professionals is dedicated to protecting consumers rights and has recovered millions in compensation on behalf of our clients.
If you believe you may have been victimized by the unfair practices of your student loan servicer, contact our law firm to find out how we may be able to help.
Trouble with your student loan servicer? Call (844) 678-1800 today.
How a Student Loan Attorney May Be Able to Help
Not every issue with your student loan necessitates seeking legal help. However, there are situations where a student loan attorney may be able to help you by:
- Ensuring you understand your legal rights as a borrower
- Communicating with your student loan servicer
- Helping you to resolve delinquent or defaulted loans
- Protecting you from harassment or other unfair practices of debt collection agencies
- Handling any credit disputes related to your student loan
- Representing you in a court of law if necessary
- Investigating the possibility of a class action lawsuit to help strengthen your case
What Are Unfair Student Loan Servicing Practices?
One of the roles of a student loan servicer is to help struggling borrowers find ways to repay their loans. However, some student loan servicers may engage in practices that are not only unfair, but also misleading or illegal, including:
- A lack of transparency about loan terms
- Improperly managing payments
- Dishonesty about repayment options
- Surprise charges or increased bills
- Auto-Loan Default practices
- Dishonesty about alternative repayment options
- Harassing calls and other illegal practices
If you are the victim of any of these types of behaviors or actions, an attorney can help you understand your rights and potential legal options against the student loan servicer.
Are Student Loan Lawyers Affordable?
During your free initial consultation with an attorney, he or she can explain legal fees and how they are paid, including ways those costs may be financed. While each case is unique, hiring an attorney may cost less than not hiring one, as you may be able to avoid wage garnishment or other collection efforts.
Understanding Your Student Loan Borrower Rights
As a student loan borrower, you have responsibilities, such as making your loan payments on time. However, you also have rights, including the right to:
- Be notified by your student loan servicer if your loan is transferred to another company
- Repay part, or all, of your loan at any time and without any penalty
- Defer repayment of your loan for a specified time (you must apply/qualify)
- Request forbearance
- Have your loan obligation canceled if you die or if you become fully and permanently disabled
Your student loan servicer should be willing to explain these rights and responsibilities to you. If your rights were violated, you may be eligible to take legal action.
Can I Sue My Student Loan Servicer for Unfair Loan Practices?
While it is unlikely that you will be able to personally sue your student loan servicer, you may be able to enter a class action lawsuit. Each class action lawsuit is unique, so there are no guaranteed outcomes for plaintiffs. However, some of the benefits that may result from this type of legal action could include:
- Processing of previously stalled repayment applications
- A percentage of your federal loans being discharged
- Outstanding balances being forgiven
- Legal fees being paid
- Other compensation or assistance
What if My Student Loan Servicer is Suing Me?
Typically, the government will first exhaust other collection efforts before taking this type of drastic measure, which also costs them money. To avoid getting sued, make every effort to stay on top of your payments. If you run into financial trouble, contact your student loan servicer immediately to see what assistance they can provide.
Current Student Loan Lawsuits
There are multiple class action lawsuits against student loan servicers, including Nelnet, Navient and Fedloan, and those numbers are growing.
Allegations include breaches of service agreements with the federal government, violations of the Consumer Protection Act, engaging in unfair or illegal practices that harmed student borrowers, overcharging borrowers and more.
- In Navient v American Federation of Teachers, $1.75 million was paid into a fund to educate borrowers about the Public Service Loan Forgiveness program. $15 million was also paid to each of the 10 plaintiffs.
- A ruling made by the U.S. Court of Appeals for the Second Circuit led to one student borrower getting $178,000 of student debt cancelled.
How Student Loan Servicers are Different from Debt Relief Agencies
A student loan servicer is not a debt relief agency. They are the go-between between you and the federal government agency that lent you money. Student loan servicers have many responsibilities to borrowers, including:
- Tracking student loan bills and payments, ensuring they are accurate and paid on time
- Helping borrowers change or start repayment plans
- Certifying borrowers for loan forgiveness programs
- Assisting financially struggling borrowers to postpone payments
A debt relief agency may offer to arrange settlement of your loan payments with your student loan servicer, but for a set fee.
Why You Do Not Want to Let Your Student Loan Default
If you allow your student loan to default, the financial consequences are long-lasting and expensive:
- The unpaid balance of your loan will become due, in full
- All back interest that has accrued will also become due immediately
- If your loan is turned over to a collection agency, there are additional legal fees and court costs
- The damage will remain on your credit report for seven to 10 years
- Derogatory remarks on your credit can harm your ability to get a job
- If you manage to get a loan after this one, your interest rates will be much higher
Who are the Current Federal Student Loan Servicers?
There are currently 10 existing federal student loan servicers, including:
- Default Resolution Group (aka Maximus Federal Services, Inc)
- FedLoan Servicing (PHEAA)
- Granite State - GSMR
- Great Lakes Educational Loan Services, Inc.
- OSLA Servicing
Five additional student loan servicers, newly contracted by the U.S. Education Department, will provide loan services support to more than 68 million student loan borrowers:
- Edfinancial Services, LLC.
- F.H. Cann & Associates, LLC
- MAXIMUMS Federal Services, Inc.
- Missouri Higher Education Loan Authority (MOHELA)
- Texas Guaranteed Student Loan Corp.
How Can I Find My Student Loan Servicer?
Your student loan servicer is assigned to you by the U.S. Department of Education. You cannot choose or shop around for one on your own.
How you locate the name of your student loan servicer depends on the type of student loan you hold:
- Federal student loan: You can log onto your Federal Student Aid account to get the name of your student loan servicer and loan details.
- Private student loan: You may access each student loan account separately or check your credit report for a full list of your student loan servicers.
What if I am Transferred to Another Loan Servicer?
Your student loan servicer could change for various reasons, but if it does, you will be notified. To make sure you receive all notifications about your student loan, be sure to keep your contact details current.
If you receive notice that your student loan servicer has changed, be sure to:
- Read notifications immediately to stay informed
- Create an account with your new student loan servicer
- Add/update your payment information
- Get familiar with your student loan servicing company
Can I Voluntarily Switch Student Loan Servicers?
Although you are initially assigned a student loan servicer, there are three ways you can switch to another company:
- Through a Federal Direct Consolidation loan: You can apply for this loan and select a new servicer on StudentLoans.gov.
- Apply for Public Service Loan Forgiveness (PSLF): Loans approved for public service loan forgiveness are transferred to FedLoan Servicing (PHEAA), a servicer that specializes in public service loan forgiveness. However, this servicer will shut down in December 2021.
- File for Total and Permanent Disability (TPD) Discharge: Loans approved under this program are transferred to Nelnet, which specializes in disability discharges.
Steps You Can Take if You Are Having Trouble With Your Student Loan Servicer
You can avoid most issues by staying current with payments and promptly resolving any issues with your student loan servicer. Additional steps you can take include:
- Contacting your student loan servicer – Keep accurate records, including date, time, what you discussed, solutions offered and any related emails or correspondence.
- Follow-up as agreed – Keep any agreements you made or call if you cannot keep the agreement.
- Get Help from the Federal Student Aid Ombudsman Group – This neutral, third-party group helps borrowers with federal loan issues. Have your documentation ready and organized, as they will want to see your attempts to resolve the issue on your own.
- File a complaint through the Consumer Financial Protection Bureau (CFPB) – This is a last resort option when all other attempts to resolve an issue have failed. You can file your complaint online.
Trouble With Your Student Loan Servicer? We Can Review Your Claim for Free
When student loan servicing companies engage in unfair or illegal practices, borrowers suffer the consequences.
The student loan lawyers at Pfeifer Morgan & Stesiak are dedicated to helping borrowers who have been financially victimized by loan servicing companies who seek to profit at the borrower’s expense.
If you suffered financial harm by your student loan servicer, we encourage you to take advantage of the free and confidential consultation we offer. You can get answers to your questions and learn if you may be able to take legal action against the company that services your loans. You are not obligated to take any legal action after this meeting.