Student Loan Assistance

The cost of a college education has spiraled beyond the reach of many families. Government cutbacks have resulted in increased tuition and other costs of attendance. In 1990, the average cost for a year of college was $12,303, according to the National Center for Education Statistics. 20 years later in 2010, it was $21,657, almost twice the amount.

In the last 10 years, student loan debt has sharply risen form $240 billion to over $1 trillion! Some experts are saying that this could be the next national crisis unless Congress does something about it. Almost 60% of this debt is held by households with less than $8500 in net worth. In short, a lot of families with very little financial resources are now burdened with student loan debt. This looks like a financial disaster waiting to happen.

As family finance lawyers, we believe that education should open new doors for opportunity and advancement. But if new graduates are already buried under a heavy load of student debt before they even step out into the working world, they could be at a great disadvantage especially considering today’s unstable economy. For students with higher educations costs, their parents may have also acquired loans in their name in order to make sure that their child had enough funds until graduation. A lot of these parent loans are just as burdensome especially if the parents are close to retirement. Unless parents have other sources of income upon retirement besides social security and/or their company pension, repaying parent loans can be difficult if not impossible.

If you have student loans (or parent loans if you are a parent) that have become unmanageable, we may be able to help. If you have just graduated and have not chosen the right repayment plan for your needs, we can also help you understand your options so you can make the best decision for your situation.

We will:

• Evaluate your current financial situation.
• For federal loans, we will identify the Department of Education (DOE) programs that maximize savings.
• Help implement the best solution.

Student Loan Assistance

Private loans do not qualify for any of the federal loan programs. However, it may be possible to settle them for less than full amount or to consolidate them through a Chapter 13 bankruptcy and have a more affordable monthly payment. In cases of undue hardship, you may qualify to discharge your student loans in bankruptcy. Bankruptcy law can be complex and you should consult with a knowledgeable and experienced bankruptcy attorney. Because we are a full-service debt relief law firm, we can help you understand all available options, both bankruptcy and non-bankruptcy alternatives.

If you have a financial hardship, you may qualify for the Pay-As-You-Earn Plan. If income is limited, your best option may be an Income-Based Repayment Plan or the Income Contingent Repayment Plan. If your hardship is temporary, you may need a suspension of payments (Forbearance). Under certain circumstances, the government may also allow a Deferment during which no payments are due and no interest accrues on the loan.

In addition, Federal Student Loan Repayment Options include:

• The Standard Repayment Plan
• Graduated Repayment Plan
• Extended Fixed Repayment Plan
• Extended Graduated Repayment Plan

Each of these programs has its own advantages and disadvantages and depending on the type of federal loan(s) you have, you may or may not qualify under some of them. The choices are often confusing to students and parents. Our goal is to get you into the program that is right for you. If you have multiple loans, you may also be able to consolidate them into one loan and have a lower monthly payment.