Student loan and consumer protection lawyer Joshua Cohen shares what students should know about repaying and seeking forgiveness for student loans.
What made you want to go into student loan law?
This was a complete accident at first. I certainly didn’t go to law school for it. No one knew such a thing existed, including me. I still get folks that don’t know what it is.
When I started my firm, I had a file from my old law firm they said I could take. It was a student loan with FDCPA [Fair Debt Collection Practices Act] violations. Two months later, my old firm gave me another file with the same violation and same offending party. Nine months later, I’m working with my old firm to bring these cases as a class action lawsuit. That, combined with marketing myself to local bankruptcy attorneys, is how I got started. Quickly, I was flooded with clients referred by attorneys in states I’d never been to. It just happened.
Did you have to manage your own student loans? If so, what was that process like?
Of course! I’m not just the president, I’m a client, too! I had been managing my loans for awhile as I had six years between undergrad and my M.B.A. program (law school was a year after I completed my M.B.A. program). But I knew about IDR [income-driven repayment] and used it during the ‘90s. I don’t think I managed them any differently than my clients. The difference was that I knew the rule book.
Could you elaborate on what the “dark side” of the college financial aid system is?
I think the dark side is simply people not knowing or understanding the rules, or how the machine works. You can’t play and win a game if you don’t know the rules. Do lenders take advantage of that? Sure, but no more than any other lending product. The difference is the massive fear and myths — like that student loans aren’t dischargeable in bankruptcy. That’s wrong. Difficult? Yes. Impossible? Hell no.
Further, people never understood what triggered capitalizing of interest (as if they could avoid it). And few people understand that IDR won’t pay off a loan (which is why it comes with forgiveness – another fact many folks don’t know). Instead, they are paralyzed with fear because their loan grows with IDR. Yes, that’s right. It grows because often the payment doesn’t cover interest. That’s no longer an issue with SAVE, but the other programs still have growth.
What is the most memorable case you can remember regarding student loan debt?
Without dropping names, I think my first individual student loan case was my favorite. I knew I was right. I knew I had a claim. But the other side refused to believe it because I was just a punk kid fresh out of law school taking on a giant. The case lasted for three years. In the end, we settled for the exact amount I had offered just six months into the case. To think, the giant spent all that money on their attorneys only to fork over my original offer.
What should students do to further educate themselves on how student loans work?
Read. Read the Department of Education website. Read expert websites (not just mine). Ask questions when possible. Look for expert resources, many of which now offer free webinars with Q&A sessions. When in doubt, ask an expert directly. Don’t let “I can’t afford an expert” deter you because most experts will give a free review to at least get started. Even if they charge, I bet it’s a lot cheaper than not knowing and making costly mistakes.
What else should students know about student loans?
- Private or federal?
- What payment plans are available and how do they work?
- How do you get forgiveness? What are the requirements?
- Speed-pay private loans. Don’t speed-pay if you’re on IDR for federal loans.
- Don’t confuse your moral obligation with your legal obligation.
- Don’t be a victim. Empower yourself through research and expert resources.
- The government is not out to get you. They simply can’t get out of their own way.
- Congress is the opposite of progress.