A college degree is often viewed as a way of achieving greater financial security. While research indicates that college graduates earn more over their lifetimes than those without a college degree, the cost of attending college has increased more than 500% since 1985. Additionally, many recent graduates find themselves “underemployed” and making incomes far less than originally expected. Coupled with the fact that college enrollment increased 32% from 2001 to 2011, it is no surprise that the student loan market size is over $1 trillion.
Unlike most other debts, student loans ordinarily are not dischargeable in bankruptcy. In fact, to discharge student loans in bankruptcy, an individual must prove an “undue hardship.” The requirements for satisfying this test can be rather difficult. On the other hand, bankruptcy can be used to eliminate other debts. Through eliminating these other debts, an individual may then manage their student loan payments more easily.
Due in part to the difficulty of discharging student loans through bankruptcy, multiple student loan repayment options exist. These repayment plans vary from 10 to 25 years in length, the amount repaid each pay period, and whether your payments vary depending on your income.
Even though student loans are not generally dischargeable in bankruptcy, student loan borrowers do possess certain rights. Specifically, student loan borrowers can bring actions against collection agencies when those agencies violate the Fair Debt Collections Practices Act (“FDCPA”). The FDCPA prohibits the use of deceptive, abusive or unfair debt collection practices by debt collectors. A collection agency may violate the FDCPA when the agency calls the student loan borrowers multiple times, at work, or at unusual hours of the day or night. Additionally, the Consumer Financial Protection Bureau has found that collection agencies are using unfair practices to misrepresent the borrower’s loan obligations, charge improper late fees, or unfairly maximizing late fees.
If you believe a student loan collection agency has used unfair practices in dealing with you, the Bond & Botes attorneys are here to help. Our attorneys offer free consultations and evaluate the unique circumstances of your situation. After meeting with you, we then determine whether a case should be brought against these collection agencies. If you live in Alabama, Mississippi, or Tennessee and need legal solutions for your student loan problems, please contact one of our offices to schedule an appointment.