In 1972, The Allman Brothers Band released a live cut of “One Way Out.” It’s a musical classic because it combines up-tempo with minor tonality, killer guitar licks with a catchy hook, and repetitive obsession with a “romantic problem” that is so often the case in American blues.
Student loan lenders, servicers, banks, your parents, and the world at large, would like YOU to repetitively obsess about what THEY think is your only “One Way Out” of student loan debt - paying it. Check out the story of Patrick Wittwer who, in service to readers of the New York Times, is helping America understand just how large and confused the student loan servicing industry actually is. What’s weird about the story, however, is that although Wittwer was subject to administrative screw-ups and abusive collection tactics - nobody helped him do anything about it! He’s still just paying the minimum. He never fought back.
Student loan servicing and collection is difficult and it’s complicated, and it’s BIG! The second biggest (by dollar amount) consumer loan category in America behind mortgage loans. See for yourself in this Consumer Financial Protection Bureau report if you like. There’s so many different types of products and sources that even the servicers can’t keep them straight. And here’s the hook: They have to!
In California, servicers of performing student loans are held to the standards of the Rosenthal Fair Debt Collection Practices Act just like debt collectors are. Collectors of defaulted student loans are subject to that California law, as well as the Federal Fair Debt Collection Practices Act. If you’ve got Federal Direct (or the old FFEL) loans, then you have rights with regard to those loans that are a product of federal law. When a servicer or a collector obscures or prevents you from exercising those rights, then they are collecting illegally and you may be entitled to compensation, relief from your loan, and to have your attorney’s fees paid for!
Private Student Loans are even more of a mess for collectors and creditors. Often, the statute of limitations has run because they’ve been in default for so many years that the collector has to give up (but sometimes they don’t and then run into trouble). Many times, the loans have been transferred from servicer to servicer and the essential documents that make up the loan have been lost!
So, don’t make the mistake of thinking that there’s only “One Way Out,” because there isn’t. If you’ve got student loan troubles, request a free case evaluation and see what’s really going on - you owe it to yourself!