Managing Law School Debt: An Interview with Bankruptcy and Student Loan Lawyer Jay Fleischman
Today more than ever, student loan debt stands as one of the most significant barriers to starting a law firm. I haven’t forgotten the early years of my practice when I took on court-appointed criminal cases and a variety of lower-paid contract assignments not just to gain experience but also to cover my $700/month loan payments which along with virtual office space and Internet service, were my cost of doing business. In retrospect, I was “lucky” in that my student loans, even in 1988 dollars (about $1300/month) pale by comparison to the burden carried by many of today’s graduates. To help grads struggling with debt, I asked my respected colleague, bi-coastal bankruptcy and student loan lawyer Jay Fleischman of Schaev & Fleischman (www.ConsumerHelpCentral.com) to answer a few questions about how to manage student loan debt – and Jay graciously accepted. Below, Jay briefly discusses some of the programs available to graduates in debt and emphasizes the importance of handling debt before it gets out of hand.
If you’re living under the burden of student loan debt, perhaps you should consider a consult with a student loan lawyer to identify options for managing debt. Also, if you’ve consulted with a student loan attorney (or any other type of debt management company) and would like to share your experience (anonymously if you prefer), positive or negative, please post your comments below. I’d love to hear them and they’ll be very useful for readers.
1. What exactly is “student loan law?”
Student Loan Law is an umbrella term for the field of practice that aims to help student loan borrowers with their debts. It encompasses aspects of bankruptcy, consumer protection (Fair debt Collection Practices Act, Fair Credit Reporting Act, and state UDAP laws), debt collection lawsuit defense, and administrative practice.
2. How did you get involved in this practice area, and was it difficult to master the necessary skills?
Many of my consumer bankruptcy clients were coming to me with student loan problems, and I began to realize that there had to be a way to help them. There weren’t any training courses available to help me get started, but then I met Joshua Cohen and attended his Student Loan Law Workshop (www.StudentLoanLawWorkshop.com). The training was so worthwhile that I began to work with Josh on other projects, including some of the aspects of the workshop.
3. As you know, many of MyShingle readers are either recent graduates starting a firm under the burden of substantial student loan debt. What options, if any, are available to them to manage debt so that their practice will have a fighting chance of success?
Lots of programs exist for federal student loans, including income-based repayment and Pay-As-You-Earn. Both of these programs reduce your payments based on your adjusted gross income, and limit the time you’ll need to pay your student loan debt.
For private student loans, it’s important to know that they are treated in the same manner as any other unsecured debt. The only time anyone cares that they were incurred for educational purposes is when the borrower files for bankruptcy. Private student loans are subject to a statute of limitations for collection purposes, as well as the FDCPA and state UDAP laws governing how collections can proceed.
4. I understand that there is a Public Service Loan Forgiveness Program (online at http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service#what-kinds-of-employment) I know that you can’t provide any specific advice, but theoretically, could a lawyer who starts a non-profit qualify for this program?
PSLF is available for lawyers who make 120 timely monthly payments while working for a 501c3 not-for-profit organization. I can’t speak to the laws governing the organization and qualification of a 501c3, though.
5. A few years back, the media carried a story about a law school grad who passed the bar but was denied admission on character and fitness grounds because of enormous student loan debt. (ABA Journal ) Do you view this type of case an aberration or likely to become more common?
I see this as a means of collection enforcement. Whether this judicial viewpoint becomes more common or not, it underscores the need for student loan borrowers to pay attention to their loans.
6. Of course, the best way to stay out of debt is to avoid it entirely – and as I recall from my own experience, lenders were all too eager to loan money. For students considering or currently in law school, what suggestions do you have for minimizing loan debt before it is incurred?
When looking at higher education, you’ve got to do a cost-benefit analysis. Will a private school really net you a job that pays enough to cover the additional cost over that of a public university? If not, better reevaluate your choices.
Look to scholarships, of which there are many. Consider taking a job in public service, or one that will pay a portion of your student loans for you. Look into a part-time job during school, if only to pay for incidentals and books.
7. Most lawyers in debt may be too ashamed or embarrassed to seek help – and many lawyers may also feel that they don’t have the money to spend on a student loan lawyer. What suggestions do you have for them?
Get over yourself. If you’re ashamed, realize that you can either tackle the problem or buckle under the weight of your debt problems. These things can only get worse if you ignore them.
As to the cost of a student loan lawyer, you have no idea what it costs to work with someone. Depending on the solution you need and your ability to handle part of the legwork, it could cost as little as a few hundred dollars to work with a student loan lawyer. Best idea is to sit down with someone who’s specially trained in this field, get a sense of what can be done, and take it from there.
8. Any additional thoughts?
Student loans are a pox on society, but if you’ve got them then you’ve got no choice but to deal with them. Get some answers and work on a plan of attack – if you don’t, things can get really ugly really fast.
Thank you Carolyn and Jay for this Q&A on student loan debt!
I’m wondering if you have any advice on launching a solo practice devoted to student loan law? I’m a young attorney with a passion for student loan law and I’m thinking about making the jump. Are there any insights or dangers you wish you knew about before starting?
Based on my own research, there aren’t any training courses on student loan except for Josh Cohen and the NCLC Student Loan Manual (http://shop.consumerlaw.org/studentloanlaw.aspx). I’ve been considering Josh’s workshop for a few months, but am cautious about committing to the fee. Does the workshop make sense for a prospective practitioner?
To clarify, these questions are for Jay and are specific to the practice of student loan law. (I already have a well-read copy of Solo by Choice!) Thank you.
I was hoping for more . . . For instance, isn’t it true that consolidated student loans are one of the only, if not the only type of loan that is not subject to refinancing? Why aren’t they? Why aren’t our representatives tackling this issue when it could clearly help the economy by increasing disposable income? Refinancing is one way that people could take advantage of improving rates and get out from under loans sooner. I would hope that the student loan lending industry would not have the balls to complain about making slightly less than an astronomical amount of money from people seeking an education who don’t have a mommy and daddy who can pay for it for them.
I think student loan law practices are a fledgling area of the law, where if you start now you will be one of very few practitioners, providing an increasingly important service. You can choose how to carve your niche — you could focus on advocacy within the DOE and with lenders, you could focus on advising borrowers to be their own advocates, teach workshops for borrowers or advocates, and/or litigate student loan collection actions. If you’re not already a member of NACA (www.naca.net), I suggest you join up — they are attorneys dedicated to practicing consumer law. NCLC also runs a helpful listserv of student loan advocates where you can ask questions that aren’t answered in the NCLC manual (which is also invaluable for a practitioner). If this is an area of law that interests you and you see a need for it in your community, or a niche for it online (students are very internet savvy!), then I think you should go for it!