A student loan lawyer is a general term to describe the types of problems an attorney handles. It does not, however, always mean the same thing.
Until the late 19th century, most people didn’t go to law school – they apprenticed in a process called “reading law”. It wasn’t until 1906 that the Association of American Law Schools adopted a requirement that law school consist of a three-year course of study.
Many of the most famous attorneys in American history didn’t go to law school. In fact, Abraham Lincoln didn’t even go to college – he had less than a year of formal schooling and no law school.
It was a simpler time, with fewer laws on the books and so less of a need for specialized knowledge.
But as things got more complicated, lawyers started to specialize. If you get picked up on a DUI charge, you call a lawyer that handles those types of cases. If you’re getting deported, you call an immigration lawyer.
There is, however, no such thing as student loan law. There’s no single law or regulation that contains everything you need to know about student loans. Instead, the term “student loan law” is a catch-all way to describe how a variety of different areas of law impact the financial obligations taken on by people who need to borrow money for their education.
The Core of Student Loan Law
Federal student loans are governed by the regulations put into place by the Higher Education Act of 1965. Those regulations have been amended and expanded over the years, supplemented by a variety of Executive Orders and policies developed by the U.S. Department of Education.
But this regulatory framework covers only the loan and grant programs established and funded by the federal government. Loans provided by states and private lenders such as banks, credit unions, and private individuals are governed by separate federal and state laws. Though federal loans and grant programs comprise the lion’s share of the student loan industry, it’s important to remember that these other players live in a separate legal world.
Lawyers who understand the Higher Education Act – and there aren’t that many of us, by the way – have a solid foundation in student loan law. This, however, makes someone a student loan lawyer much in the same way that your neighbor who’s read Harry Potter and the Prisoner of Azkaban knows everything about Harry Potter.
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Student Loan Law Covers a Range of Legal and Financial issues
When you’re thinking about student loan law, you’re really thinking about options.
When you’re trying to figure out how to deal with your federal student loans, you want to know the BEST options available to you. The range of options, however, changes depending on the nature of your federal student loan issue. If you were defrauded by your school, you should talk to any attorney who understands Defense to Repayment regulations as well as state-based options and bankruptcy alternatives in case your DTR is denied.
The best attorney for parents contending with a Parent PLUS Loan include one who can discuss income-driven repayment options and the impact of long-range retirement planning, but DTR likely won’t enter the conversation. Cosigners of private student loans will confront more state-based decisions, many of which involve asset protection and civil litigation defense strategies.
It’s not one-size-fits-all when it comes to student loan law. In fact, the world of student loans touches on many other aspects of life – and of the law.
Broadly, the fields of law included in student loan resolution includes the following:
Tax Law. Because of the wide variety of student loan repayment plans that hinge on your taxable income, an attorney needs to have at least a basic understanding of tax law. You’ve got issues like minimizing taxable income, maximizing retirement savings, and accounting for matters such as running a business or handling an inheritance. It’s also useful to know how settlements and forgiveness can impact your tax obligations – and when those tax liabilities can be minimized.
Consumer Lending. Student loans are personal debts, and many were originated by private lenders. There’s a litany of federal and state laws that govern the rights and responsibilities of lenders and borrowers in consumer credit transactions, so attorneys who handle private student loan issues should be well-versed in how that system operates.
Collection Laws. Most student loan borrowers are worried about collections – things like harassment, dealing with lawsuits and the consequences of their aftermath. Federal laws such as the Fair Debt Collection Practice Act, Fair Credit Reporting Act, and Telephone Consumer Protection Act all control the methods of collection of debt, but a number of states have their own laws as well. If you’re in default on your student loans or are concerned about being in that position in the future, having an attorney who knows nothing about consumer collection host of different state laws governing how debts can be collected.
Civil Litigation. Private student loan companies need to file a lawsuit against you in order to enforce the terms of the promissory note. Holders of federal student loans can sue you in federal court. State and federal court systems each have their own laws covering practice and procedure, evidence and defenses. A student loan lawyer in Texas, for example, would likely be of limited value to someone being sued in Ohio.
Bankruptcy. Public perception is that you can’t use the bankruptcy laws to your benefit when you have student loans. Though it is more difficult to have your student loans wiped away at the end of a bankruptcy case, it’s not impossible. Bankruptcy can also provide other significant benefits to people with student loan debt. This is one of the most overlooked solutions for student loans, probably because it requires years of hands-on experience with actual bankruptcy cases to fully understand. In handling bankruptcy cases for over two decades, I have seen firsthand just how difficult it can be for a new attorney to navigate the complexities of the bankruptcy court system.
Corporate Finance and Securities Transactions. Most private student loans, as well as federal student loans originated under the FFEL program, are bundled and sold to investors in a complex process called securitization. Securitization usually involves a number of transfers of the loan, with the resulting investment vehicle overseen by a variety of entities that are charged with servicing, collecting and distributing payments. Of all the areas I’ve ever taught to aspiring student loan lawyers, this is the one that is most complex for them to understand because the world of corporate finance is radically different from that of consumer protection.
Military Issues. Laws governing lending to, and collecting from, members of the military may impact the loan and repayment options. For example, the Military Lending Act regulates lending practices and products offered to service members and their dependents. The Servicemembers Civil Relief Act provides protection from collectors as well as modifying the terms of some loans. HEROES Act enables you to get a waiver of certain documentation requirements, and there may be ways to get the DOD to repay your loans. Beyond that, student loan borrowers are often concerned about security clearance and benefits.
Immigration. In this global economy, people often move from place to place. You may be concerned about being deported or losing your ability to maintain your status if you default on your student loans. Your ability to bring in a fiancee or family members, ability to retain your employment-based visa, and other questions will require the advise of a student loan lawyer who also understands immigration issues. If you are thinking about moving to a different country, you likely want to know how that impacts your responsibilities as well.
Estate Planning and Asset Protection. This is tied closely with bankruptcy because of the questions many borrowers have regarding enforcement of defaulted student loan debts. What can the government and loan holders take, and under what circumstances? What, if anything, can you protect – and how can that be accomplished? How does student loan debt impact the ones left behind after the student or borrower’s death? The answers to these questions rely on state law issues as well as a knowledge of various estate planning and asset protections vehicles.
Family Law. Married couples and those who are interested in getting married are understandably concerned about the ways in which their finances will impact a spouse. Questions about liability for premarital student loans, the impact of community property laws, and how judgments against one spouse affect the other are just some of the points of intersection between student loans and family law. Navigating the student loan waters with an attorney who is unable to resolve these issues could lead to an unwelcome outcome.
When Does a Lawyer Know Enough?
As you can tell, this is a pretty big list – and each field has a whole bunch of subfields. It’s not necessary for an attorney to have a comprehensive understanding of each of them into order to do a good job at handling your student loan issues, but I think you’ll agree it’s important to at least be able to spot the issue.
For example, I don’t do estate planning work – but I do know what a student loan creditor can take from your estate and some ways ot minimizing your exposure. If you want a deeper dive into estate planning, I can work with another attorney to make put the pieces together. Of all the attorneys I’ve helped train in the field, I can safely say that most don’t even consider themselves to be student loan lawyers.
The critical skill is being able to see the issue and know enough to guide a client towards the solution.
Student loan law means different things depending on the lawyer you meet. For example, lots of student loan lawyers don’t have any practical experience in bankruptcy. They may understand the rules and benefits, but without the real-world application that’s critical to providing a client the resolution they need.
I got lucky by coming to student loan law with thousands of hours of experience in bankruptcy, collection defense and other consumer protection laws. The fact that I haven’t spent decades working as a CPA or tax advisor doesn’t mean I have to surrender my student loan lawyer card. Neither does the family law attorney who works with student loan borrowers to keep their spouses insulated from liability.
I happen to have practical experience in a variety of fields because I’m an outlier. I’ve been practicing law since 1995, but the field now known as student loan law didn’t even exist back then.
When I started practicing law, student loans were dischargeable in bankruptcy and the average student loan debt was $14,250 for people coming out of a 4-year undergraduate school. There was only one income-driven repayment plan available for federal student loans, and most people could make their monthly payments without going past due on the rent. Now, discharging a student loan in bankruptcy is considered far more difficult and the average student loan debt for Class of 2017 graduates was $39,400. There are a number of income-driven repayment plans available for federal student loans, not to mention forgiveness options.
There just wasn’t a need for student loan lawyers back then. I’ve had the luxury of time to develop a wider skill set than a lot of other attorneys in the field.
Some attorneys who identify as student loan lawyers know more than others. Some have more experience handling certain types of issues, and others are laser focused on only 1 or 2 subsets of the problem.
Let Your Needs Shape Your Choice of a Student Loan Lawyer
If you live in California and have a defaulted private student loan, I might be a good choice of attorney. If you live in Colorado and are trying to protect your home from Navient so you can leave it to your grandchildren, I’m not going to be of much help.
I can represent you if you want to file for bankruptcy and discharge your student loans in New York. I don’t have the skills to draft a prenuptial agreement, though I can let you know if there would be a benefit to having one.
Ultimately, a student loan lawyer is the attorney who can solve your problem. Maybe that’s me (you can find out about my services here), and perhaps someone else is a better fit. Though I’d love to be able to help as many people as possible, it’s far more important that you get the best professional advice for your situation.
Make sure that your needs fit the attorney’s scope of expertise. Ask questions, and be sure to understand the answers before deciding to rely on a professional’s advice. In the end, the work is worth the peace of mind you’ll feel when you have a solution.