Student Loan Scammers Tips and Tricks

Student Loan Scammers Tips and Tricks

Recently, there have been organizations offering tools to resolve student loans as a student loan relief program. They claim you can learn the tips and tricks that let you reduce student loans by more than 50%. People who sign up for this program receive credit restoration and a written guarantee. The program even shows how you can generate additional income by helping others. It sounds like a good program that will benefit you and anyone else you want to help. However, people who join this program become Student Loan Scammers. So many people joined, that several state’s Attorney General such as Illinois and Washington State as well as the CFPB took action.

The Scammers Promise

There are several problems with this program. First, the promise that you can reduce student loans by more than 50% is misleading. The only way you can get a loan reduced by that much is to default on your payment and ruin your credit score. You must have defaulted for many months, have suffered through hundreds of collection calls and more. This way, you enter into a settlement via being sued and actively defend your case. Even then, if you are not actually suffering a financial hardship, there may not be a settlement and you will have wrecked your credit for nothing.

 Federal Student Loans

Federal student loans do not offer discounted settlement options because they have several ways to collect the funds, including through wage garnishment and tax refund intercepts. Student Loan Scammers know this, so they have to change the way they operate. Since they are for-profit organizations, they have designed a cookie-cutter program that they apply to everyone without concern for anyone’s particular scenario.

They consolidate every person’s loan the same way. They put you into the Income-Based Repayment program. For many people this program is beneficial to some degree, but for others, it is not; and no one explains the pros and cons of the program. They only state that your monthly payment will drop. They also do not discuss the other programs available to you, so you have no way to know if this is the correct choice for you.

Avoid The Scammers

If you are looking for help dealing with student loans and do not understand your options, start with the servicer who sends your monthly statements. Then, contact the CFPB and/or Department of Education Ombudsman. If that does not help, reach out to a student loan lawyer. This way you do not fall prey to one of these student loan scammers.