Is it legal for a private student loan lender to charge me more than 8% of my disposable income on payments?

UPDATED: Oct 23, 2010

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Is it legal for a private student loan lender to charge me more than 8% of my disposable income on payments?

I showed my student loan statements to someone who worked in the finance industry, they said i was being charged 124% of my disposable income for payments which seemed legally questionable.

Asked on October 23, 2010 under General Practice, Texas


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

First of all, student loans are loans acquired to obtain a degree.  It is a contract into which you enter theoretically prior to entering any type of employment.  Student loan rates are not contingent on your income though if you do have a low income, you may qualify for some sort of forbearance of your loan for a few months or a graduated rate of payment for a number of months or years.  Oftentimes banking department agencies or offices of the attorney general or department of education in your state can and do have jurisdiction to review your student loan education related complaints.  Consider doing some research on your terms and if you qualify to obtain a lower payment and consider exploring your options in filing a complaint if your state as usury laws with respect to loan rates (rates charged and considered a consume credit item).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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