DOVER- Entering freshman year at Brandeis University, Dover native and Wilmington High School graduate Joshua R.I. Cohen was like many other 18-year-olds, unknowingly signing financial aid papers that would set him up with years of repaying private and federal student loans.
But Cohen’s financial aid package also included a work-study job in the financial aid office, a job which would set him on a path to becoming one of the country’s only student loan lawyers.
This past August, Cohen moved his family, along with his practice, back to the Deerfield Valley, settling in West Dover, and keeping his Connecticut-based practice open online. While Cohen can only litigate for clients in Connecticut currently, he will be eligible to apply to the Vermont bar in November and begin helping Vermonters with their student loans.
But Cohen has found a way to help those with student loan problems across state lines by providing workshops for consumer attorneys across the country, educating on the ins and outs of the student loan business. Cohen explains everything from how to defend private student loan lawsuits, to getting affordable payments for clients. So far, Cohen has produced 80 workshop graduates in 31 states.
“I’ve been doing this for five years,” said Cohen. “Why I think this is so important is what makes America work is there are two sides for everything. There’s an industry side and a consumer side, but there’s a void on the consumer side, and I’m altruistic about it. I want people to get help.”
Cohen graduated from Quinnipiac Law School in 2007, and became interested in constitutional and business law. Cohen found that in order to incorporate both of these interests, he would most likely end up defending corporations and the rights of big business. But Cohen took another route, becoming interested in consumer law. Between his second and third years of law school, he worked for Connecticut Legal Services on a project helping anyone over 65, irrelevant of income. But it was one client who got the ball rolling for Cohen’s current practice.
One day a man came in who was seeing his Social Security payments offset by a student loan he thought he had paid off in the 1980s. Cohen, remembering his work-study in the Brandeis financial aid office, sprang into action. “This man had a 20-year-old loan for truck-driving school,” said Cohen. “I said ‘I know what to do with this.’ By the end of the summer we had him paying $5 a month. He thought I had done a miracle, but that’s really just the way the law works, and people just often don’t know they can fix their loan too.”
Cohen continued working on consumer law for two more years, with a focus on the Fair Debt Collection Practices Act, writing over 100 lawsuits against harassing debt collectors, and eventually opening his own practice. Cohen began to take on student loan cases from bankruptcy attorneys and within seven months was flooded with work. Cohen says this was due in part to the fact that there are so few attorneys who model their practice like Legal Aid, which provides lawyers to low-income clients. Cohen says that while his clients may have good paying jobs, debts like student loans can cripple anyone financially.
“We all have rights and our job is to make sure those rights are being enforced,” said Cohen. “At this stage it’s a team effort, and there’s not a lot of people on this side of the team.
“My clients tend to be rather sophisticated people. They are working and have money but something went wrong, so I’ve taken what Legal Aid has put together and I guess you could say I’m applying it to the middle-class and those who don’t qualify for legal aid.”
Student loans have been in the national spotlight since July 1, when Congress allowed student loan rates to double from 3.4% to 6.8%. This hike affected subsidized Stafford Loans, which are federal loans not charged interest while a student is enrolled in school. While Congress continues to wrangle on the issue, Cohen says the hike is not good news, but also not as bad as many are making it out to be.
“If we look at the larger picture, it’s a red herring,” said Cohen. “It only affects new borrowers, so those already in the pool it doesn’t affect.
“As an undergrad, if you go to school for four years, your Stafford Loan balance is not going to be any more than $24,000 to $25,000 because you’re only allowed to have a certain amount of those loans per year.”
Cohen further explains that if the average debt for a student is $24,000 in federal loans and the interest rate doubles, the monthly payment increases by $38, from $236 per month to $274, the equivalent of a car payment. But Cohen says that while there are some people who can live comfortably while paying this monthly bill, most cannot, and opt for the more affordable Income Based Repayment (IBR).
Income-based repayment, established in 2009, lets the borrower pay based upon their income for 25 years, with the remainder forgiven afterward. Cohen says that while this is a far more affordable option for most, many don’t know the forgiven amount is taxable income. Cohen said that the department of education has said the money was not intended to be taxed, and Cohen is confident that by 2034, the first year that forgiveness begins, the loophole will be closed. “All we’re doing is kicking the can down the road,” said Cohen. “It’s still cheaper to only pay the taxable rate on it, but I’m confident Congress will in time fix that loophole.
“As a middle-class person, you have 25 years to plan for this.”
Th advice Cohen has for those going into college is simple: Do your research, and also consider a field of work that makes life after college easier on the wallet. Jobs in government, social work, and public service can help you get rid of your student loan debt in 10 years, tax-free.
“It’s all easy to do, once you learn how to do it. I show people, here’s your path, you can make it work. Once your student loan is handled, it takes a huge weight off of people.”
Cohen also says that having a clear, affordable route to paying your debts helps the entire economy.
“If you’re freeing up cash flow on the credit side, it makes the debt-to-income ratio look a little better. When a creditor looks at the credit for a mortgage, they don’t care as much about total debt as they do, how much you’re spending per month, and how much you have to spend a month to keep your credit in good standing.
“The more money in pocket, the more people can become consumers, contribute to the Gross Domestic Product, buy a car, buy a house, pay their bills, and go on vacation.”
For more information on Cohen’s work visit thestudentloanlawyer.com.