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Beware of student loan debt relief scams

On Behalf of | Sep 15, 2016 | Debt Relief

Many people with student loans in North Carolina may have heard about programs that can help them reduce their loan payments or consolidate their debt and thought that they sounded too good to be true. Such programs actually do exist and they are available for free through the federal government. However, that has not stopped some private companies from preying on unsuspecting consumers and providing them with the same services for an average of $613, according to CNBC.

An entire industry has been built around student loan debt relief and while it is legal for a company to help someone prepare the documents they need for submittal to a legitimate, government-based debt relief program, many of these companies engage in questionable behaviors. As a result, some of these companies have been sent cease-and-desist letters or shut down.

After paying a company hundreds of dollars to help reduce student loan debt, one would think he or she would at least have something positive to show for it. However, 65 percent of the people who have used a debt relief company reported that their finances had not improved as a result.

According to the Christian Science Monitor, one solution to prevent students from falling prey to these companies would be to require classes in financial literacy beginning in high school. If students have a better idea of how loans work, experts argue, they might not end up in the position where they cannot afford their loans in the first place. For example, being able to estimate what your monthly payment would be before committing to the funding would be a prudent move. However, 54 percent of students polled reportedly failed to do so. People who are struggling with their student loans may find it beneficial to contact the federal government or their loan servicer directly to see what kind of free relief programs they may qualify for.


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