Initially, twenty some years ago, I worked on the side of the student loan companies. Whenever someone in the State of Florida sought to discharge federal student loan debt in bankruptcy, I was often trial counsel for the student loan company. Our clients ranged from Sallie Mae, ECMC, TERI and USA Funds. Our track record was excellent – I recall losing only one trial down in Miami. It wasn’t really due to any great lawyering skills, it simply was very difficult to discharge student loans in bankruptcy. I traveled around the state handling trials and appeals in Tampa, Orlando, Jacksonville, Fort Myers and even Miami area – it may have been Fort Lauderdale – all I remember is it was a long way down there!
Why did I do that type of work? Well, I felt grateful for my own loans and believed in the system and wanted to help to make sure it was around for future borrowers. I would not be a lawyer today if it weren’t for the student loan system.
But you could say I’ve seen the light since then. Today, I work for borrowers. Nowadays, it’s nearly impossible for the vast majority of student borrowers to actually pay off their debt. When I graduated back in 1992, I owed 45k and my first job right out of law school paid 40k – roughly a 1 to 1 ratio. Fortunately, it was never hard for me to pay off that debt. But nowadays, I’ll see 3 to 1 ratios all the time, i.e. someone owing 90k in loans, but only making 30k.
And for the past few years, jobs have been scarce leading people to take forbearances rather than entering repayment. Fast forward a few years, and the loan balance has doubled. The amount of debt is so large, with the constant accrual of interest – capitalizing interest at that – without help, our clients are fearful that they cannot get married, have families, move out of their parents’ house in some cases, and are even worried about not being able to save for retirement or even be able to retire.
So we have developed a number of ways to help our clients reduce their student loan debt – to something that is sustainable, affordable and with an end in sight. These options may or may not include bankruptcy, and apply to both federal and private loans, although the options are very different for federal versus private loans. Usually we can shave years off the debt, and reduce monthly payments by hundreds of dollars – and in some cases can obtain full forgiveness or discharge of the entire debt.
One of the biggest problems that we see in this industry is the lack of transparency – people don’t know their loan types in many cases, and many options are hidden from them. The system is overly complicated and it doesn’t need to be.
We have written a short e-book that is available for free on our website at christiearkovich.com – “How to Take Your Life Back From Your Student Loans” – that is very informative and summarizes some of our methods to reduce or eliminate this debt. Take a few minutes and download this guide. I bet you’ll find something in there that will help you reduce your debt!
