Cromwell, CTAttorney Joshua Cohen may have one of the best perspectives on the student loan debt crisis in America. A thirty-something attorney, Cohen has been intervening on behalf of young Americans caught in the student loan debt crisis for almost five years, and is one of the few lawyers in the US with the knowledge and ability to get people back on track.
Cohen’s website alone gets at least 200 contacts a month from young Americans caught in what promises to be a lifelong debt trap. Without expert legal advice, many would be doomed to a life of payments they cannot afford, harassing phone calls from debt collectors and no hope of ever repaying the money.
The Institute for College Access and Success estimates that two-thirds of university and college graduates leave school with an average student loan debt of approximately $26,000. About one percent have debts in the six-figure range.
All combined, the student loan debt in the US tops out at over $1 trillion. Although it is difficult to determine, the effect of millions of young Americans making bank loan payments rather than spending on consumer goods and services is believed to have a considerable drag on the economy, and will continue to for many years to come.
Most of the loans were made to students through the federal or the state governments. The rest of the loans were made to students through private lending institutions. Understanding the key differences between these two types of loans is one of Cohen’s strongest points and is critical to finding ways to solve a student debt problem.
“The private side is the scariest,” says Cohen. “The banks have lent huge amounts of money to people. If these loans were for any other purchase, for a house, or car, or any other tangible good, the bank would never, ever lend that amount of money to these people.
“I have a 23-year-old who graduated with a hundred thousand in private student loans and no co-signer. He will never ever pay that loan. His degree is in physical fitness. He is personal trainer at a gym and he makes 30K a year. He won’t even touch the principle on that loan. That’s what I call DOA. So now he is sitting on a default and his credit is garbage,” says Cohen.
“This is very similar to the sub-prime mortgage lending crisis where the banks were giving loans to people that couldn’t actually afford them,” says Cohen. “Fortunately, those people could file for bankruptcy, surrender their house and walk away. But people with private student loan debt are not allowed to do that. Congress needs to change the bankruptcy law so that these are dischargeable.”
The lenders and the debt collection agencies frequently use tactics that drive young borrowers into default. “They tell them ‘here, this is what you owe and this is how much you have to pay every month,” says Cohen. “But the law says the payments have to be affordable and there are ways to make them affordable. I know they are not doing this, because I am bringing suits against debt collectors all the time.”
And Cohen is winning, getting damages for borrowers they will use to pay their loans.
“I have sued debt collectors; I have sued lenders, and guarantee agencies. The only people I haven’t sued is the Department of Education. I am not saying I don’t have plans for it, I just have not found the right case yet,” he adds.
Another approach that Cohen uses for students with large federal debts and in default is getting them into the Income Based Repayment (IBR) program that caps the required monthly payments at an amount based on the borrower’s income and family size.
“The servicers screw up so the borrowers default and the debt collectors screw up so they stay in default. That’s the biggest problem from the federal side. If people just knew about IBR, many people would not default,” says Cohen.
Cohen, one of the few lawyers with these kinds of expertise, now teaches other lawyers across the US how to handle student loan debt issues. It’s a massive economic and social problem.
“I have had more than one person come in and say they were dumped because the person they were dating was afraid to marry them because of their debt load. That’s a real problem if you are a common property state. It’s insane,” he says.
Joshua Cohen is known as The Student Loan Lawyer. He holds a BA from Brandeis University (’96), an MBA from the University of Phoenix (’02), and a JD from Quinnipiac University School of Law (’07). He is based in Cromwell, Connecticut.
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Posted by Kayla R
I am from Tomahawk Wisconsin. I am married and a mother of 3 children. In 2011/2012 I enrolled in Keiser University online medical assistance program... with the promises of getting into an internship in my area and eventually a job. I went through my classes made the deans list and could have graduated with honors, but when it came down time to get into an internship/externship My student advisor and myself could not find a site that would take me on. Months went by with nothing. I called the school multiple times to find out what i could do but no one could help. They eventually dropped me from their program leaving me with a balance so i couldnt even use my credits ecen if i wanted to because they would not release my transcripts without being paid. Now im left with what has become a 25000 dollar student loan that i for one cant afford for two didnt actually get a degree and three i have nothing to show for it. Now ive been out of school for 4 years and ive moved on but i always have this huge debt hanging over me and i dobt know what to to any more. Is there any sort of legal action i can take to get out from under this situation?
Posted by Diss Pleased
when i signed up for Devry in 1991-1993, it was to become a robotic technician. I got excited about the idea of building robots after watching Chuck Norris movie, Top Dog.
The "sleazy used car salesman" so called recruiter had me enroll in the Associates Electronic 2 year program and countless promises of making xyz amounts of money and
assistance from the college to help place me were all a lie. Grand illusions of making the "typical" $40,000 per each graduate was whispered in my ear.
By the time I graduated, there were no jobs available. I received an A+ on my final exam for the essay i wrote on Chuck E Cheese robots. I went to apply to Chuck E Cheese
with my shiny new diploma, and they hired me ! Only.....not to work on their robots. Making pizza, cleaning up the floors, and removing paper jams from the games. The pay
was an incredible $6.25 an hour. yayyyyyyy go meeee
I went from there to Texas Instruments to the wafer fab room, horrible conditions so it didnt last long. $8.50 and hour.
From there to work on copiers, $9.25 and hour.
After that, i never did use anything related again to electronics, and I was far from ever building robots.
My problem with Devry are several things. They lied about career placement. We were told a several occasions by the teachers, if we didn't pass, no big deal because they
had already gotten their money from Sallie Mae and failure was up to us as they had a new class coming in every semester. Assistants were hard to nail down to help tutor us
and they normally had a bad attitude as if we were inconveniencing them when we were promised they came with the package.
I still feel i was never placed in the correct field of study as building robots are more software engineering than technical applications.
My bill for the 2 years was $32,000 which was $7000 more than lower cost colleges due to the great assistance in career placement they had supposedly.
Now currently my bill is $80,000 due to penalties and interest of never paying those crooks. And why should i? I never got the teaching I needed to achieve the goal that
I signed up for, and I never got the career placement I was promised.
How many colleges are out there doing this to innocent YOUNG AND NAIVE students? When will this stop? I hear some say, "you chose it, now pay it". Well thats not entirely
fair when young people fresh out of high school are being lured into shady colleges that promise them the world and all the students get at the end is a whopping debt to
If we can't count on Congress to help us with student forgiveness of shady empty promises, God help us.
Posted by Brenda LeCompte
My son Joshua Cohen went to the Art Institute in Denver CO, but dropped out in December 2010 to go into the Navy, leaving me with his school loan of $50K to pay off. At the time of enrollment, they would not approve a loan for my son, even with me as a co-signor, but APPROVED a loan for ME, who was "unemployed" at the time!! They also told me I could transfer the loan to his name at a later date. The Board of Education has informed me that that was incorrect and there is nothing I can do. I am still struggling financially, my savings is getting used up to make the $432/mo payment in hope that my son will reimburse me, but so far its not. He is off in FL, living his life in a Cult Church, called Victory Chapel, and I will have to continue paying until I'm 73 years of age. This loan in on my credit, keeping me from being able to purchase anything for myself (ie, a car or a house). I need help!!!! They are all crooks!!!
Posted by Terri L
I took out student loans in 1994 to go back to college late in life. my original loan was for 32k and now 18 years later it is 106k. i have had to file bankruptcy and was in forebearance because we could not make ends meet. My payment is 945 month. It is a bit hard to swallow and am not sure how I am going to afford this on SS - I thought i only had 10 years to pay but to find out that since my loans are consolidated it automatically makes them paid off in 20-30 years...more interest in the lenders pocket since this gets accrued daily. I am lucky to have a couple 100 dollars come off the principal each year. I think something needs to be done for all these students facing this issue and highway robbery from the lenders. this is a BIG stressor and is affecting my daily living.
Posted by Dineen Panattoni
I graduated in 1996 with a $56,000 loan. I was a single mother of two and had to put my loan into forbearance for three years in order to complete a low paying internship that would allow me to obtain my state licensing. The loan grew to approximately $77,000. I have paid over $70,000 on this loan and I currently owe $77,000. I have never been in default. This corrupt system is an outrage. I encourage everyone to take part in the million student march on November 12th. We can end this if we band together!
Posted by Karen Parr
I took out a student loan in the middle of 1980s for around 12,000 to go to a trade school,when i finished i started paying off my loans, somewhere i got lost and stopped paying probably because i couldn't afford to make the payments,i did do forbarrence for a few years not knowing that interest was adding up on the loans, well now were in 2015 and i owe 48,000 dollars, but i have been making my payments on time now for years and in 2007 i owed 39,000, mind u i have been making my payments every month on time so how is it going up and not down, well I asked Nelnet that, and they said that 250.00 in interest is added to my loan every month so they said even if i make my monthly payments it will never go down, i feel i've paid off my loan along time ago, and also i recieved an Email from nelnet saying they just added another 15,000 dollars to my loan for interest, I'm a single parent with one income and moneys tight. So i guess were all screwed by the government because thats what they do best. Why. Because they can and we tax paying law abiding citizans have no help,
Posted by Gregory Baxley
In 2004 I borrowed exactly $35k in private student loans from Sallie Mae. I was mislead by the school financial services, and ended up enrolling without a co-signer. Six-months after school I was expected to make monthly payments that were more than my income. And the debt and interest rate has been literally running my life ever since. I've been able to avoid defaulting on the loan, but Sallie Mae has never been willing to work with me on making affordable payments or amending the outrageous interest rates and fees. That $35k that I borrowed 10 years ago now exceeds $100k in debt; and I'm expected to make monthly payments exceeding $1400/mo which is more than my rent. All for an AS degree that I was never even able to use. I was recently laid off, doesn't even factor in to them. I was actually told by a loan representative to stop eating so I can afford to pay my student loans. According to Sallie Mae, even if I made $1400/mo payments, by the time I pay it off, the debt will exceed $300k. An increase of 1000%+ on the original loan. It's unrealistic, and they are relentless and offer zero help in making it easier to pay off the debt. I will be paying this for the rest of my life, literally. It's so immoral, and getting an education shouldn't bankrupt someone for life. It's a literal ball and chain, a death trap. It just doesn't seem legal. I need help.
Posted by David "Marty" Werner
I am 120,000 it keeps rising, for a bachelor's of general studies. I didn't have an advisor to help me the first 4 years, I learned that I could not even work in the field I wanted to work in with a degree in psychology, so I switched to a degree in social work with a minor in psychology. I was at southeast missouri state university for 10 years, and after completing all my classes with a 3.2 GPA in the social work program, the department could not find me placement in a practicum, therefor offering me the BGS or nothing. I worked in the social work field for $8.50/hrs 29.5 hours a week, the only requirement a GED. Now I work in pest control, still not enough to pay the $1400 they want a month or even $100 a month. So I did a consolidation of what I thought was all loans 115,000 when I keep getting more bills for another 5000 plus loan. I put them all in IBR (income based repayment) 25 years after that I have to pay taxes on all that was forgiven, I'm just praying that something changes before then. I feel very cheated and overwhelmed by these loans.
Posted by c huggins
my son has private loans at $21,000.00 and federal loans at 31,000.00. Finished school two years ago. Was working in a restaurant. He is still looking for a job. He has a BA in business management. they are calling me because I am a co-signed. At the time I cosigned I was disabled but I thought that he was going to get work. It has not happened. My credit is excellent. They keep telling since I pay my bills I could pay his bills. I told them I was disabled collecting social security disability. I told them I am willing to pay $150.00 a month until my son finds a job. What can be done.
Posted by Thomas Erves
I attended Devry from 1983 to 1985, I owed a total of 7500.00, i n addition to paying 200.00 per month during my tenure at Devry.
to make a long story short i have had numerous offsets and made payments on my loan and assumed that in 1995 my loan was paid in full.
fast forward to 1998 student loan comes to me and informs me that i now owe 7500.00(my original amount), i dispute the amount write letters to my local congress-person and even the president of the United States, all collection calls cease.
fast forward to 2010, i am informed that I once again owe 7500.00, and that my bankruptcy filing did not discharge my debt..I never filed a bankruptcy and the SS number that a bankruptcy was filed under is not mine...
Posted by Annie P. Ware
My total loan amount for PhD program was $98.853 I made continuous payments on this amount while in school as I am doing now. I consolidated the loans through the Department of Education Student Loan Consolidation Program. These loans were serviced by Sallie Mae. I continued making payments on these loans. The loans were never consolidated they are in two separate loan amounts the direct student loans and graduate student loans each with an increased interest rate of 6.8%. This is a total of 12%. Now to my understanding the loans would be consolidated with one interest rate of 6.8%. The interest rate at the beginning was 4.8%. Now the total of my loans are $186,878.68 and growing with each payment made. I was told when I spoke with a Sallie Mae representative that the interest accumulate on a daily basis on the up paid principle. My salary is not going up and because of my age I am looking at retirement in five years. I want to pay my loan back but within reason. This is not reasonable. I make a payment and when I go online to my Sallie Mae account the loan has increased. So the payments are make are just that free money not going toward anything. Just hush money to keep garnishment and income tax from being taken. I can't see this loan being paid off in my life time.
Posted by Cheri Woods
As per Ca. law, in 1989 I was entitled to a free state grant on a parolee work release program. I applied @ Marinello School of Beauty. I signed the massive paperwork which I was not allowed to read or have reviewed by an atty. It was not until after 1500 hrs (one month prior to graduation) they called me in the ofc. & threatened that I would not graduate unless I signed paperwork agreeing to pay back a loan, which I did under threats & duress. This is a common practice, often preying against illiterate foreign students who have no recourse but to sign loan docs at the 12th hr. I never took the state exam or received a cosmetology license or entered into the cosmetology field in L.A. following my graduation, yet for the past nearly 25 yrs. I have been harassed by debt collectors re: the student "loan" despite the fact it was to be a FREE state grant. I had an atty send them all the relevant paperwork, including proof that I was deemed permanently disabled approx. 20 yrs. ago. & am a disabled senior citizen living on S.S. disability income, all of which has gone ignored by the Dept. of Educ. & debt collectors. This is white collar crime committed against unsuspecting, foreign, illiterate, low-income students. I am a college educated U.S. citizen, able to speak up for those students who are unable to defend themselves.
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