Interviewer: What are some good results you’ve gotten for clients in the student loan realm? Give me a few examples because that will be important for new clients to learn about why they should retain an attorney in this situation.
A. Campbell: In the private student loan context, there have been little-known consumer laws that I use to help people out of their present circumstances. With the Telephone Consumer Protection Act, if you’re getting called on your cell phone and you didn’t leave that cell phone number in the application for credit and the student loan collector auto-dialed you or left prerecorded messages or computer generated voice messages on your cell phone that’s $500 to $1500 a call. Sallie Mae was sued in a class action for this. They paid tens of millions of dollars.
Attorney Campbell Has Utilized the Consumer Protection Laws
For one particular client, I was able to have a low five figure debt completely eliminated because of the consumer protection laws. There might have been violations of the Truth in Lending Act where they didn’t disclose things properly. There might have been violations of the Fair Debt Collections Practices Act, but the biggest law that can benefit people is the Telephone Consumer Protection Act because it’s $500 to $1500 per call.
Interviewer: Essentially, your strategy is when someone comes to you and they’re being harassed by a student loan company, you analyze all the communications from the company to look for violations there. Then look into the situation and get your clients back into payments or get relief from some of the penalties?
Rehabilitating the Loan: Attorney Campbell Helps Clients with Government Student Loan Debt Apply for the Income-Based Repayment Program
A. Campbell: It depends on the situation. If it’s a governmental student loan, then what I’d like to do is I try to get them out of default and I try to get them into Income-Based Repayment, which is a payment plan that’s come about since 2009.
It’s based upon the income that you make. If you pay under Income-Based Repayment, for 25 years, your debt is gone. It doesn’t matter how much your debt was, if your debt was $150,000 a year. Your payment is dependent on your income, not how much you owe. So if you’re making less than $20,000 a year, your payment under Income-Based Repayment is zero.
Paying for Less than You Borrowed: Maintaining the Income-Based Repayment Plan Eliminates the Student Loan Debt in 25 Years, Regardless of the Amount of the Loan
Those people, who let’s say, went to law school and want to help out non-governmental agencies and nonprofits and they’re being paid $30,000 a year. Their payment under a standard repayment plan might be $1500, or it might be $1800 a month. They can’t afford that, but the government says, “If your income is $30,000 a year, you can probably pay about $75 a month.”
This Repayment Plan Was Developed by the President’s Administration and has been in Effect Since 2009
You pay that for 25 years and then the debt is eliminated. The only caveat is as you go, as your income increases, so does your payment. The only other negative part of it is the interest still capitalizes.
The interest on the debt will still capitalize, however if you’re never going to pay it off anyway, it doesn’t really matter. That’s the new program that the Obama administration developed. That’s one of the ways I try to get people with governmental student loans out of debt. You cannot take advantage of that program unless you’re out of default.
Interviewer: So, your first goal is to get them out of default and then get them into a program like that?
Parent Plus Loans Are Not Eligible for the Income-Based Repayment Plan
A. Campbell: Yes and Parent Plus loans, unfortunately, those cannot be part of your Income-Based Repayment. Those are not accounted and those are loans that can’t be part of it. You have to pay those.