Understanding Unfair Student Loan Practices
According to Forbes, as of 2020, nearly 45 million American adults were collectively burdened with about $1.6 trillion in student loan debts. Obtaining a degree in the United States requires a huge financial sacrifice. This is why several students have to take out loans to get through college. Unfortunately, student loan borrowers are often subjected to unethical practices, unsavory behavior, or predatory tactics from loan providers.
If you’ve been subjected to unfair student loan practices, you can take legal action to protect your rights. Our team of experienced consumer credit protection attorneys at Stecklein & Rapp can examine your circumstances and explore your options regarding suing for unfair student loan practices. We will determine how to best pursue claims or take action against the loan provider for breaking the law. Our firm proudly serves clients throughout Kansas City, Missouri, Kansas City, Kansas, and Lincoln, Nebraska.
What is a Predatory Lender?
Predatory lenders are lenders or loan providers that impose unfair, illegal, or abusive loan terms on borrowers, including high fees, high interest rates, and equity stripping. These predatory lenders also make use of aggressive sales tactics and leverage on the borrower’s ignorance or lack of understanding. Through their predatory tactics, they can entice a borrower to take out a loan they may be unable to repay.
How to Identify Predatory Lenders
Here are some signs to help you identify a predatory lender:
- Exorbitant, three-digit interest rates
- Add-on loan fees and costs that not clearly stated
- Fees or charges for low credit scores or no credit scores
- Offering a loan with no credit check required
- Rushed approval or paperwork
- Loan flipping or loan refinancing
- Balloon payments
- Misleading information for borrowers
- Asset-based lending and equity stripping
- Quick timelines
- Compulsory arbitration
- Prepayment penalties
Common Unfair Student Loan Practices
Some common examples of unfair student loan practices include:
- Calling you between 8 a.m. and 9 p.m.
- Calling you at work after being instructed not to do so
- Discussing your student loan debt with your family, friends, or third parties
- Calling you names, swearing at you, harassing or abusing you
- Exaggerating or falsifying the nature or amount of the debt
- Annoying you with repeated phone calls
- Dishonesty about repayment options
- Deceiving you that they’re government officials or calling from the government
- Misrepresenting your rights as a student loan borrower
- Issuing threats to arrest you for non-payment
Getting Help Against Unfair Practices
If a debt collector or student loan provider violates the FDCPA or subjects you to unfair practices, you have several available remedies. These include:
- Suing the loan provider in state court
- Suing the loan provider in small claims court
- Reporting the issue to the state attorney general
- Filing a complaint with the Department of Education
- Using the violation to your advantage (as leverage) in negotiating debt settlement
An experienced attorney can review your case and determine the best approach to take action against an overstepping agency.
Federal and private student loan providers are required to abide by the rules of the federal Fair Debt Collection Practices Act (FDCPA) and any other applicable state laws offering additional protection to consumers. These laws prohibit loan providers from using deceptive means, unethical practices, and predatory tactics to recover payment. If you’ve been subjected to illegal student loan practices, consult with knowledgeable consumer protection attorneys to protect your rights and for proper guidance.
At Stecklein & Rapp, our team provides experienced legal services and handling student loan legal matters. As your legal counsel, we will review your circumstances, identify if the student loan provider has violated the federal FDCPA or other applicable state laws, and explore options to remedy your situation. We will fight to protect your rights and take appropriate legal action against the loan servicer or collection agency.
Contact us at Stecklein & Rapp today to schedule a one-on-one case evaluation with experienced consumer protection attorneys. With locations in Kansas City, Kansas, Kansas City, Missouri, as well as Lincoln, Nebraska, our attorneys have the knowledge, experience, and insight to fight diligently on your side and help protect your rights.