Despite the special protections given to student loan debt ( i.e. different discharge rules in bankruptcy, different garnishment rules, etc.), collection agencies that collect either federal or private student loans are still subject to both federal and Iowa fair debt collection laws. A debt collector that reveals private information to a third party, communicates with a borrower at inconvenient times of the day, telephones repeatedly with the intent to harass the borrower, contacts a borrower at work without permission, makes any false representation or states that nonpayment will result in arrest, has violated fair debt collection laws. The debt collector can be sued and the borrower can be awarded damages and attorney fees.
The types of violations listed above are typical of those any debt collector might be sued for, but for student loan debt collectors the list of possible violations is larger. For instance, a student loan debt collector might violate fair debt collection laws if they misrepresent a borrower’s ability to get a discharge of their loans, mislead borrowers about loan repayment options, push borrowers into loan consolidation or loan rehabilitation programs rather than better repayment options or charge excessive collection fees. Like the violations mentioned above, these violations unique to student loan debt collection can result in damages and attorney fees being paid to the borrower. These damages may not result in the elimination of the student loan but it might help result in broader solutions like reasonable repayment plans.
If you’re facing any debt collection issues related to student loans please contact us so we can review what kinds of options might be available to you.