1. Presented by Joshua R.I. Cohen Student Loan Litigation The Plaintiff’s Perspective

2. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Topics Federal Loan Claims – Rehabilitation 9/10 Reasonable and Affordable – Other Claims Private Loan Claims – Violation of State Laws Potential Claims

3. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation 9/10 20 U.S.C. § 1078-6(a)(1)(A): 9 payments made within 20 days of the due date during 10 consecutive months DL - 34 C.F.R. § 685.211(f): nine voluntary, reasonable, and affordable monthly payments within 20 days of the due date during ten consecutive months FFEL - 34 C.F.R. § 682.405(b)(1)(ii): nine payments are received within a ten-month period

4. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation 9/10 Borrowers must make (9) nine full, timely, voluntary monthly payments of an approved amount in a (10) ten month period in order to qualify for Direct rehabilitation. Borrowers may miss one payment in a ten-month period and still qualify for Direct rehabilitation. 2009 PCA Manual page 87. Borrowers may miss one payment in a ten month period and still qualify for FFEL rehabilitation. 2009 PCA Manual page 103.

5. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation 9/10 Compare to Perkins Loan Rehabilitation: – Borrowers must make a full, timely, voluntary payment of an approved amount each month for 9 consecutive months in order to qualify for NDSL- Perkins rehabilitation. 2009 PCA Manual page 95. Litigated as Class Actions Violation still occurring

6. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation – R&A 20 U.S.C. § 1078-6(a)(1)(B): Neither the guaranty agency nor the Secretary shall demand from a borrower as monthly payment amounts described in subparagraph (A) more than is reasonable and affordable based on the borrower’s total financial circumstances. DL - 34 C.F.R. § 685.211(f): The amount of such a payment is determined on the basis of the borrower’s total financial circumstances.

7. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation – R&A FFEL - 34 C.F.R. § 682.405(b)(1)(iii)(A): Include a consideration of the borrower’s and spouse’s disposable income and reasonable and necessary expenses including, but not limited to, housing, utilities, food, medical costs, work-related expenses, dependent care costs and other Title IV repayment. (B) Not be a required minimum payment amount, e.g. $50, if the agency determines that a smaller amount is reasonable and affordable based on the borrower’s total financial circumstances.

8. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Rehabilitation – R&A Litigated on both Class and Individual basis.

9. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Other Federal Loan Claims FDCPA violations – Applicable against debt collectors only State law violations – Applicable against lenders, guarantee agencies, servicers, and debt collectors – HEA preemption not an issue Especially when claim is non-conformity with HEA

10. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Private Loan Suits Confusion between Fed and Private loan status leads to misrepresentations: – Charging collection fees above State maximum – Stating Fed purchased private loan – Misrepresenting that wages can be garnished without lawsuit – Statement that there is a lien against SS – Statement that law license can be revoked

11. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Private Loan Suits Other claims: – Collection of a discharged private student loan BAPCPA effective October 17, 2005 Discharge based on filing date – Continued credit reporting of discharged loan FCRA violation

12. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Potential Claims Federal FFEL Rehabilitation – Failure to provide written rehabilitation agreement before making first payment. 34 C.F.R. § 682.405(b)(1)(vii) A guaranty agency must provide the borrower with an opportunity to object to terms of the rehabilitation of the borrower’s defaulted loan. DL and FFEL Rehabilitation – Forwarding accounts for AWG while borrower attempts to negotiate R&A Rehab.

13. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Potential Claims Federal Consolidation – 6 payments prior to consolidation - No payment required if consolidating into ICR or IBR Only 3 payments required if consolidating into other payment plan

14. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Potential Claims Federal Loan Servicers – Failure to alert delinquent borrowers of IBR – Offering deferment/forbearance instead of IBR – Offering forbearance instead of deferment – Misrepresenting IBR qualifications Must earn a minimum AGI/must be employed

15. Copyright 2010-2013 Joshua RI Cohen - The Student Loan Lawyer Bankruptcy Discharge Private: Failure to offer flexible repayment plans is a consideration by many judges for discharge Fed: IBR not always an acceptable response to hardship claim