Top Myths About Student Loan Forgiveness
We answer hundreds of calls and emails each month at McCarthy Law from Americans drowning in student loan debt. Throughout these conversations, we continue to hear inaccuracies regarding student loan forgiveness, whether they were told the information from friends, their student loan servicer, or almighty Google. We decided to debunk these myths for you, based on our law firm’s experience in handling student loan forgiveness. In no particular order, they are:
- You have to pay someone to get loan forgiveness help. There are many websites and companies offering forms, kits or guidance for a fee where this information is provided free from the government. Typically, these companies suggest that they can help with only federal student loans, not private student loans. If you are looking for more help, you may want to seek their help or advice. If you have private student loans, in most cases, these companies are unable to help you and you need to find a reputable student loan attorney who is well-versed in student loan law.
- Forgiveness applies only to federal loans. Reputable private student loan forgiveness programs are few and far between, which is why we can help so many of these borrowers with our unique program, says Kevin McCarthy, managing attorney at McCarthy Law. We are able to settle private student loans for much less than the full balance and with a reduced term.
- Student loans can’t be wiped out in bankruptcy. The bankruptcy laws require you to show that being held responsible for the student loans will be an undue hardship. This standard can be difficult to meet, and will require the expertise of a bankruptcy or debt attorney. A good debt attorney can often resolve payment disputes more readily than non-lawyer collectors, and help you avoid bankruptcy altogether.
- Parents or other co-signers are out of luck. If your parent cosigned on your Parent PLUS loans, it is true that these loans aren’t eligible for Income-Based Repayment (IBR), but there are other options available. They may be eligible for a qualifying payment plan for PSLP such as Income-Contingent Repayment (ICR). If you have a private student loan, your parent or cosigner, can work with a reputable private student loan forgiveness law firm, who can negotiate the balance and term reduction directly.