The primary reason that you can't find an attorney to take your case is because no attorney is willing to take on the risk of going up against the U.S. Department of Education in Federal Court. According to 34 CFR 685.102 -- "The failure of a borrower and endorser, if any, to make an installment payment when due, or to meet other terms of the promissory note, if the Secretary finds it reasonable to conclude that the borrower and endorser, if any, no longer intend to honor the obligation to repay, provided that this failure persists for 270 days."...shall be placed into default and held to the terms and conditions outlined in your signed Master Promissory Note. Furthermore, the Secretary of the U.S. Department of Education does not recognize or endorse any post-secondary institution or the quality of instructions delivered or offered - the Secretary only recognizes the Accrediting Agency that oversees post-secondary institutions and it is the Accrediting Agency who enforces and set the standards for the quality of education.
Your fight is misplaced and should've been taken up with the college and their accrediting agency and now its your fault for letting your student loans go into default. Federal Financial Aid is a financing tool to fund your education - just because you don't like your program of study doesn't mean that releases you of your liability. You signed a Master Promissory Note and took Federal Financial Aid dollars and you have to repay those dollars - it's not free money, anyone who was in an MBA program should know that.
I also hate to burst your bubble, but Federal Financial Aid loans (i.e. FFEL and Direct Loans) are calculated at Simple Daily Interest (I think you know where I'm going with this) so let me do some calculations for you. Let's say you graduated in January 2008 and your first payment due date is July 1, 2008 - since you were in a Graduate Program, you would not have been eligible for Subsidized Loans, just Unsubsidized loans - so let's say your $38,000 is actually $43,168 (Simply daily interest for one year is $2584 X 2 for 2 year program). So from July 1, 2008 until today - your simple daily interest has accrued to a whopping $25,358 (rounded up) - so now we are at $68,526 on just accrued interest and that doesn't even include collection costs, late fees, etc. is limited to up to 25% set by ED so lets add on 25% and that's another $17,131 and that brings our total to $85,657 over the past 8 years that doesn't even include any capitalized interest if you took on any deferments or forbearances during the timeframe. So, yes - your student loan debt level over the past 8 years is very reasonable and convincible based upon my "rough calculation"
So I hate to break it to you, but the consequences of default is clearly outlined in your Master Promissory Note.
What I would recommend that you do, is finish your MBA program and then start the Rehabilitation process of paying back your legal obligation to the federal government and then get onto an Income Based Repayment program where it can be discharged after you make 120 monthly payments.
AND YES, you can pay off this debt slowly and still have a normal productive life - trust me as I have witnessed it first-hand on this forum from other folks.
Good Luck to you!
Edited by hodap2001, 17 February 2017 - 06:26 PM.