As a nation drowning in student loan debt, the promise of relief can be too tempting a proposition to turn down. Yet that is precisely what borrowers should do regarding any such promise that comes from a student loan debt relief company boasting special programs. As revealed in a new report, the same relief programs these private companies are charging hundreds of dollars for may be entered into free of charge directly through the government.
As reported by The Huffington Post, this week the National Consumer Law Center released an investigative report of 10 private companies offering student loan debt relief. Investigators not only combed websites for information, but used “secret shoppers” to garner information directly. While there are a number of troubling practices prevalent in this industry, glaringly so are the programs made to sound as though they are unique to the companies themselves. In fact, they are charging as much as $1,600 to enroll borrowers in the same programs that can be entered into free of charge by borrowers themselves. As though that’s not enough, these companies sweeten the deal for themselves, tacking on $25 to $50 monthly fees, evidently to cover the cost of keeping them enrolled in said programs.
What’s worse is that those tasked with enrolling borrowers into these “special” programs are working on commission. The more borrowers they enroll, the more these “sales” people make. Clearly that’s no good sign of any company that is truly looking out for the best interest of consumers.
If you’re struggling to make your monthly payments on a federal student loan, don’t create credit card debt to make ends meet, don’t file for bankruptcy (as student loans can’t be discharged anyway) and, by all means, don’t solicit the help of a private student loan debt relief company. Go straight to the source for help at StudentAid.ed.gov/repay-loans.