You think you’ll be dealing with your private student loan debt for the rest of your life.

Before I began helping people with their student loan problems, I would have agreed with you.

It feels like a losing battle, with balances refusing to budge no matter how much you pay. The threat of default hangs over your head, and you live in fear of a shattered credit rating. The private student loan companies have rigged the game, and the odds are against you.

If you want to win, you’ve got to change the rules of the game.

Follow these steps and the private student loan company won’t have a chance of beating you.

12 Simple Rules to Win The Private Student Loan Game

  1. Choose rent over private student loan payments. For many people, paying private student loans is a constant struggle. High interest rates and few payment options mean falling behind on basic living expenses to do so. But remember that life gets a lot tougher if the lights go out because you can’t pay the bill. Pay the landlord and the utility companies first, private student loans later.
  2. If you fall behind, pick up the phone. Fall behind on a private student loan and you’ll get sent to collections. Debt collectors call more often if you don’t answer the telephone when it rings. When a call comes through, do what you can to pick up the phone.
  3. Demand that the calls stop. Federal laws govern the way debt collectors can contact you. Some states such as California have other laws to protect you from lender harassment. For example, you can stop collectors from calling you. Once you make your request in writing, the phone calls have to stop.
  4. Request documentation. Collector must verify that you owe the debt and the amount due. Exercise your rights by making that request in writing.
  5. Dispute the debt if necessary. If the collector can’t verify the debt, you have the right to dispute it. Collectors must note that dispute on your credit report.
  6. Know how long they have to collect from you. Private student loan companies have a limited amount of time to file a lawsuit against you. Knowing how long you have to worry about the debt is instrumental in putting your mind at ease.
  7. Keep notes. If a debt collector or the private student loan company breaks the law then you’re going to want proof. The best way to do that is to take notes of your conversations and correspondence. If you don’t have everything in writing, you can’t give your lawyer anything to work with.
  8. Check your credit report. Creditors report information about your debt to credit reporting agencies. If the information is inaccurate then you may not be able to get new credit, a job, or insurance. Get a copy of your credit report every six months so you can correct errors.
  9. Make all deals in writing. Debt collectors may offer to settle the private student loan. There’s no protection if the collector doesn’t abide by the terms of the deal unless you have it in writing.
  10. Consult a tax professional before settling. If a creditor forgives more than $600 of a debt, it must send you an IRS Form 1099. You may have to to pay taxes on the forgiven part of the debt. Sit down with a tax professional before you agree to any settlement so you know how much it’s going to cost you.
  11. Watch your mailbox. If a private student loan company wants to collect, they need to file a lawsuit and serve you. Failure to answer the lawsuit will result in a default judgment – and automatic loss for you.
  12. Don’t mistake a lawsuit for a judgment. A private student loan lawsuit doesn’t mean you lose. There are a host of defenses that may be available to you, and there’s always a chance that you may win the case.

Bonus – Your Ace In the Hole

If you’re in the mood for a bonus tip, here’s one for you – keep a student loan lawyer in your back pocket.

A lawyer who understands the complexities of private student loans will be able to help you every step of the way. An attorney can protect you against collection harassment and help with credit report errors. If the private student loan company sues, you’ll also be able to rely on a powerful defense.

Note that I said a powerful defense – not just a form pleading to keep you temporarily safe from a judgment.

That powerful defense should include a review of all documents to be sure the private student loan company has kept proper records of payments and charges. Your lawyer should also understand how to read the securitization documents most private student loans rely upon to keep their business operations moving.

So don’t let the private student lenders beat you – take action to beat them at their own game.