The fact is that most student loan issues do not require the help of an attorney. For many things, such as changing your repayment plan or applying for student loan forgiveness programs, you can fill out the paperwork or online form yourself.
However, there are scenarios where paying an attorney for help with your student loans can be very beneficial. For example, what should you do if your lender sues you for defaulting? That is a situation where you definitely need professional legal help.
Here are some other scenarios in which you might consider an attorney for your student debt. Plus, we’ll answer some frequently asked questions with the help of a real student loan attorney.
The difference between an attorney and other student loan debt relief providers
First, it is important to distinguish between paid assistance for your student debt and legal assistance for your student debt. Many borrowers who need help fall into the first category: they are just looking for professional advice for their student loan situation.
And there are companies you can pay to help you do this. Make sure you fully understand what you are paying for. When hiring someone for a professional service related to your finances, you want to be clear about what is expected, what the payment is, and what the follow-up is to ensure everything is done correctly.
If you do pay for aid, do your research to avoid student loan scams. Unfortunately, there are many companies that prey on borrowers seeking help with their student loans, so make sure they aren’t taken advantage of. Here’s a guide we’ve written to determine if a student loan company is a scam, and what to look out for.
If you need more than just help determining your repayment plan, you may need legal help. Let’s see when legal help can be useful.
When Does It Make Sense to Seek a Lawyer for Your Student Loan Problem?
It’s important to remember that every situation is different, and whether you contact a student loan attorney really depends on your unique situation.
According to Adam Minsky, a student loan attorneyFinding representation can be helpful in the following situations:
- If you are dealing with a difficult or complex issue, such as a dispute with a lender, or if you are being harassed by a debt collection agency.
- If you have been taken to court and would like legal advice and representation.
- If you are unsure of your options or legal rights regarding a particular student loan issue, such as whether you qualify for a student loan repayment or forgiveness program, or what your options and strategy might be regarding a defaulted student loan.
- If you’re feeling overwhelmed by a student loan problem and want some guidance to make sense of it all.
A good rule of thumb is to ask yourself if you can do it yourself, or if you feel like you need an attorney to work on your behalf to resolve the problem.
How can an attorney help with your student loans?
So, now that you know when it might make sense to speak to a lawyer, what can a lawyer actually do for you that you can’t do yourself?
First, according to Adam Minsky, it’s important to remember how lawyers are different from student loan servicing companies. Lawyers are a regulated profession, overseen by state licensing boards (called the “bar”) and held to strict rules about confidentiality and obligations to serve their clients. In other words, lawyers are not only accountable to you, but also to their bar. This gives you a lot of protection and recourse if you are mistreated or scammed, compared to unlicensed companies and organizations.
On the other hand, some non-lawyer consulting firms may be able to provide some general assistance, especially when it comes to standardized forms and applications for the most popular federal student loan programs. But they may not always be equipped to understand the nuances of the student loan system, resolve a situation if there is an error or unexpected problem, or properly advise their clients if unique circumstances arise. Counseling firms are also much more limited in what they can do for borrowers who are in collections or being sued, as it is a crime for non-attorneys to engage in the practice of law.
A lawyer typically helps with the following when it comes to student debt:
- Advice and guidance about your legal rights and options for your student loan.
- Direct representation and advocacy in communications with student loan lenders, servicers, collection agencies, credit bureaus, dispute resolution agencies, and other relevant entities.
- Negotiations with student loan providers, administrators and collection agencies to arrive at a desired solution.
- Assistance with preparing, completing, and reviewing student loan documentation, such as program applications, letters and 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 sue companies that have harmed you.
How much does it cost?
This can be the scariest part of potentially working with an attorney for student loan borrowers. How much do you have to pay and is it worth it? Since student loan borrowers already have debt, many believe that paying an attorney for help simply doesn’t make sense.
However, it is important for borrowers to know that there are different fee structures and ways to pay an attorney so this can make financial sense.
There are four basic fee structures for working with an attorney.
1. Consultation costs: You may be able to pay an attorney for a limited session to obtain advice or counsel, or to get help with a specific matter (such as reviewing a settlement agreement or reviewing a credit report). The fee depends on the location, the duration of the consultation and the price of the lawyer.
2. Hourly rate / Commission: This is the most traditional type of attorney-client compensation arrangement and involves paying for the attorney’s time at that attorney’s hourly rate. The customer usually pays an initial “retainer” – also called a retainer – to cover a certain amount of billable time in advance (for example, $5,000 or $10,000). The attorney then draws from that retainer as he or she completes the relevant questions. If the retainer is not used up when the case is completed, the balance will be returned to the customer. If the commission runs out, the customer may need to top up the commission. The amount of the commission and the number of billable hours for a case are highly dependent. For example, defending a collection case can take significantly more billable hours than assisting with a loan consolidation application.
3. Fixed amount: Some attorneys offer specific services for a flat fee, regardless of how long it takes for the attorney to complete the service. This is also called project-based work. This can provide some protection for the customer so that if something takes longer than expected, the customer will not have to pay for additional costs. But the compensation would likely only cover a specific task or set of tasks for which the attorney was hired. A good example of this is completing an income-related repayment application.
4. Unforeseen circumstances: For certain types of cases, an attorney may be able to handle a case on a contingency fee basis, where he or she will only charge a fee if they prevail 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 violations of specific laws. Often these are laws that allow something called “fee shifting,” where the losing party is legally obligated to pay the winner’s attorney fees. A lawyer will only take a case on a contingency fee basis if there is a solid claim under one of these laws and he or she believes there is a good chance that he or she will succeed in court.
How can you find a reputable student loan attorney?
So, if you think hiring an attorney is the best route for your student loan situation, how can you find a reputable attorney? This can be especially challenging as many borrowers are unfamiliar with the law and how the process works.
Additionally, there are unfortunately so few attorneys who have experience in student loan law. Minsky recommends that borrowers looking for an attorney for their student debts do the following:
- Check the folder for the National Association of Consumer Advocates (NACA). NACA is a bar association for attorneys who represent only consumers and borrowers, and you can search for local attorneys who list “student loans” as their practice area.
- Contact your state bar association for a referral (many state bar associations have referral services).
- Search for lawyers on a platform like Hellothat has lawyer profiles. Avvo also provides an overview of client reviews and peer approvals, which can be helpful when selecting an attorney.
- Once you have found an attorney you may want to work with, you can compare the attorney with the bar association in your state to see if that attorney has any record of public discipline.
- Do a Google search on that lawyer to see if his or her name comes up in a good way (such as in the press or publications) or a bad way (such as being sued by a government agency or regulator for misconduct).
Final thoughts
Dealing with a difficult student loan situation can be difficult. Not only is it financially draining, but it can be extremely taxing emotionally.
If you find yourself in need of professional help with your student debt, make sure you consider whether an attorney is the right choice. Depending on your situation, it may make sense to find a lawyer for your student debt.
Have you ever gotten help from a lawyer with your student debt?
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