National student loan debt currently tops $1 trillion, which is three times higher than it was a decade ago. As an Asheville student loan lawyer I help people reduce their student loan payments. In previous blog posts I have discussed some of the options student loan borrowers have in attempting to reduce their monthly payments. In this blog post I want to discuss ways to avoid scam companies preying on the uninformed student loan borrower.
Given that student loan debt exceeds $1 trillion and that a large portion of this debt is in default, it should be no surprise that a cottage industry has popped up to make money off of unwary borrowers by marketing their supposed “student loan debt relief” services. This industry, much like the debt consolidation industry from which it spawned, has a lot of bad actors who will use unethical tactics to lure you into giving them money for bogus services. When attempting to reduce your student loan debt, you should be on the lookout for scam businesses. Here are some companies to avoid:
- Debt relief companies boasting that your entire student loan debt can be forgiven. This sounds great, right? Unfortunately, most borrowers’ student loans will not be forgiven. Before sending money to a company that makes this claim ask specifically how it intends to obtain complete forgiveness of your student loans. Better yet, avoid the company altogether.
- Debt relief companies that want large, nonrefundable up front fees and monthly payments. Don’t send money to a student loan debt settlement company without first getting- and carefully reviewing- the fee contract. Do not send money unless the method of computing fees is clearly set out in the contract and the fees are reasonable.
- Debt relief companies that charge for debt assistance that you can get for free from the Education Department. Navigating your way through all of your options and making the right choice can be difficult and so it’s not unethical for a debt settlement company to charge a reasonable fee to help you with this service. However, don’t agree to pay a fee for something that you can easily do yourself!
- Debt relief companies that require you to send your student loan payment directly to them, rather than to your student loan servicer. This will cause you to go into default on your student loans while your money is being held, usually interest free, by a shady company.
- Debt relief companies who offer services under non-existent laws. According to the NY Times, a company called First American offered student loan services under something called the “Obama Forgiveness Program” that had supposedly been enacted by Congress. No such program exists. A simple online search will usually help you identify whether a particular student loan program exists or not. (So will your friendly student loan attorney.)
- Debt relief companies who contend that they have special ties or connections with the Education Department. It should go without saying that you shouldn’t put your trust in a private company that purports to have a special connection with a government agency!
I am a student loan lawyer and my duty is to my client. For this reason, at Kight Law Office we usually do not charge a fee if we are unable to lower your student loan payments. We explore all of the available- and legal!- options that you have to reduce your student loan debt and then help you make the right choice. Not everyone’s student loan payments can be reduced. For this reason, we’ll never promise a result and we encourage you not to trust anyone who does.
Contact us today to see if we can help you with your student loan debt.