Low-to-moderate income city residents can get help with foreclosure mediations or find referrals to attorneys who practice in a range of areas, all through local nonprofit Civil Justice Inc.
Now, Catherine Gonzalez wants to expand the organization’s reach to include those struggling with student loan debt.
Gonzalez is one of 11 Baltimore Community Fellows sponsored by the Open Society Institute of Baltimore. The fellows, whose ranks include artists, activists and attorneys like Gonzalez, receive $60,000 and 18 months to implement proposals that address issues facing underserved communities in the city.
One of those issues, said Civil Justice executive director Cheryl Hystad, is the complex realm of student loan debt. The organization had seen an uptick in requests for help with student loan debt relief recently, she said, but it didn’t have the resources to respond. When Gonzalez met with staff members at the nonprofit while coming up with her proposal for the fellowship, they pinpointed student loan debt as an area of unmet legal need.
“I think people don’t think of it as a legal issue, or think of it as an issue you need to seek out an attorney for,” Gonzalez said. “Or they don’t seek one out until there are profound consequences, such as wages being garnished. Reaching those people through outreach initiatives is pretty crucial.”
From fiscal years 2000 to 2011, the overall federal student loan default rate, defined as the percentage of students who begin repaying their loans but default by the end of the following fiscal year, increased from 5.9 percent to 10 percent, according to the U.S. Department of Education.
Although she’s still in the early stages of planning out the project — the fellowship began about a month ago — Gonzalez said the main goal will be helping clients eligible for student debt relief sift through their options. In some cases, attorneys can assist them with paperwork that will alleviate their debt or even allow it to be discharged or forgiven.
Because one of the biggest obstacles for many who are struggling with student loan debt is the sheer complexity of the system, education and outreach will be a major part of the project, Gonzalez said.
“Say you’re having hard times economically — there could be options for you to reduce your monthly payment, but enrolling in them can be difficult,” she said. “For people who’ve already defaulted, it can be difficult knowing what steps to take to get back into a payment plan.”
Gonzalez said she’ll also consider expanding the program to include preventive measures as well, possibly by reaching students who haven’t yet started paying back their loans.
The federal government requires “exit counseling” for students who’ve received federal loans, she said, but since students typically go through that counseling right before they graduate it doesn’t help those who have dropped out.
And for those who have been the victims of “predatory” student loan practices, Hystad said, pursuing higher education with the goal of improving their lives can end up having the opposite effect.
“We’ve seen a lot of cases where people have really been duped by some for-profit schools,” she said. “They’re told, ‘Hey, you’re going to get this great education and get a great job,’ and they take out loans in order to pay for the school, and it turns out the school is bogus or just not providing a good education. Then they’re stuck with this debt and no way to pay it off.”
Hystad said Civil Justice is planning to market Gonzalez’s program to potential clients. The organization is anticipating high levels of demand.
“When we’ve talked to people [running similar programs] in other states, they’ve said as soon as they put the word out, they were just crushed with the volume of people,” she said.
For now, Gonzalez said she plans to emphasize debt relief assistance over litigation, although she’s not ruling that option out entirely.
“A lot of it will focus on the administrative aspect, and learning about options and getting into repayment programs,” she said, “but I’m definitely open to the possibility of pursuing select cases, especially ones that might have a powerful impact. That’s something I definitely recognize as a possibility.”