More Borrowers End in Court by Lenders over Student Loans

by San Antonio Attorney

The number of lawsuits due to delinquent student loans has increased significantly in the past two years, according to lawyers via The Associated Press.

Majority of these loans are under a private loan firm.  However, most borrowers are missing payments much less often as compared to the height of the recession.

A thorough AP review of court websites found thousands in various states, which were filed since 2013.

“I’m seeing it steadily getting worse,” said Joshua R.I.  Cohen, a lawyer who served as an advocate for student loan cases in Connecticut and Vermont.

Among those affected were Brett and Jennifer Rinehart, residents of Manchester, Connecticut.

EduCap, a major lender and loan administrator, took the couple in court last August representing HSBC Bank.

The complaint stated that their debt reached up to $59,000 through a student loan taken out by Jennifer.

Jennifer is a teacher who earned a masters degree in education.  Two sides have yet to reach an amendment when it came to terms on a repayment plan.

“I was angry,” said Brett Rinehart, discussing that this lawsuit caused an additional burden into their lives.  The couple also has to raise their two children.

“We had been willing to work with them the whole time.  They wanted to play hardball.  It’s been very stressful.  It’s a big question mark looming over our heads,” Brett further added.

The student loan industry finds itself under fire over complaints for diminutive things such as paperwork errors and deceptive collection tactics, thus leading to them filing various lawsuits.

Another explanation for the steady rise in lawsuits can be attributed to the fact that several loan holders now have the power to sue.

This also happens since bankruptcy cases filed by borrowers during the recession have been resolved, according to N.  James Turner, a lawyer based in Orlando, Florida.

Student loan debt cannot be collected when someone is in bankruptcy.

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