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Loans Consumer Alert

Note: Be aware that if you re-finance your Federal student loans with a bank into private loans, the loans cannot be forgiven under any of the Federal Student Loan Forgiveness Programs.

A recent report by NCLC investigated the growing “student loan debt relief” industry that has sprung up in response to the demand for borrower assistance and the dearth of reliable resources. Many “student relief” organizations were found using deceptive advertising and numerous potential legal violations of consumer protection laws.

Read: https://studydaddy.com/

The National Student Debt Association strongly recommends you to be aware of these practices, take precaution, and look into consolidating your own student loans with the Department of Education. Listed below are some of the numerous problems with this new industry, including:

Student loan debt relief companies mischaracterizing government programs as their own

Selling a One-Size-Fits-All Approach

Despite claims of broad services, most of the representatives of these student loan debt relief companies acknowledged that they offered only loan consolidation. According to get answers for homework service there are numerous problems with this approach including that consolidation is not an appropriate product for all borrowers and may not even be available to all borrowers.

Improperly Claiming Government Affiliations

For example, stating that they are an “approved servicer” with the U.S. Department of Education is inaccurate. Companies should not say they have a special arrangement or relationship with the Department of Education or imply they have access to programs or solutions that consumers do not.

Discouraging Borrowers from Handling Their Own Cases

According to studydaddy.com the debt relief companies seize on federal government incompetence in selling their services. This may be an appealing selling point, but it is deceptive if the companies go too far in implying or in some cases stating explicitly that a borrower cannot get relief on her own.

Numerous potential legal violations of consumer protection laws, including the federal Credit Repair Organizations Act (CROA), Federal Trade Commission (FTC) Telemarketing Sales Rule, state debt settlement and debt management laws, and unauthorized practice of law provisions.

Abuses in the debt relief industry are not new. The abuses grew so severe in the credit card counseling, foreclosure rescue, and debt settlement industries in recent years that the federal government and many states passed laws to crack down on abuses. Most of these laws should apply to student loan debt relief companies. Many of these companies appear to be routinely violating all or some of these laws intended to protect consumers.

More resources:

Graduated Loan Repayment Plan

Student Loan Consolidation

How Student Loan Consolidation Benefits You

The Student Advisor Center

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