Never pay upfront for “help” with your student loans
According to the Federal Trade Commission (FTC) scammers stole millions from innocent student loan borrowers who were doing their best to workout their student loans. These sleazes lied to innocent borrowers, saying that for $1,000 upfront, they could permanently reduce or eliminate the monthly payments.
Lied about connection with U.S. Department of Education or the loan servicers
The FTC alleged that the defendants’ companies bilked millions from people trying to lower or eliminate their student loan debt. The defendants marketed on social media platforms, including Facebook. According to the FTC’s complaint, they misrepresented that they were affiliated with the U.S. Department of Education or the loan servicers, and falsely claimed that consumers who paid an upfront fee of up to $1,000 were qualified or approved for permanently reduced monthly payments or loan forgiveness. In fact, the complaint alleged, the defendants had no affiliation with the U.S. Department of Education and operated a service that provided no relief.
The defendants’ Los Angeles-based companies used the following names: Alliance Document Preparation, LLC; EZ Doc Preps; Grads Aid; First Document Aid; SBS Capital Group, LLC; Grads United Discharge; SBB Holdings, LLC; Allied Doc Prep; Post Grad Services; United Legal Center, LLC; Post Grad Aid; Alumni Aid Assistance; United Legal Discharge; United Legal Center, Inc.; Grads Doc Prep, LLC; Academic Aid Center; Academic Protection; Academy Doc Prep; and Academic Discharge.
HOW TO PROTECT YOURSELF FROM STUDENT LOAN SCAMS:
Student Loan Consolidation Scam: What To Do (reprint from Forbes article)
- If a student loan company says it has a “relationship” with the U.S. Department of Education, don’t work with them.
- Legitimate student loan companies clearly disclose that they are independent companies that are not affiliated with the U.S. Department of Education.
- Never pay a fee for student loan consolidation. Student loan consolidation is completely free through the federal government.
- Remember, student loan consolidation helps you organize your student loans, but does not lower your interest rate or your monthly payment. Visit Studentloans.gov or call 1-800-557-7394 for more information on student loan consolidation.
- If you want to lower your interest rate or monthly payment, then refinance student loans. Plus, student loan refinancing rates just got cheaper.
Student Loan Forgiveness Scam: What To Do
- No third party student loan debt company will “forgive” your student loans.
- Don’t pay an upfront fee for student loan forgiveness.
- This scam sounds like Public Service Loan Forgiveness, which is a federal program for public servants with federal student loans. Income-driven repayment plans also can offer student loan forgiveness for federal student loans.
- You can report the scam to the Consumer Financial Protection Bureau (CFPB). You can also report the scam to the Federal Trade Commission (FTC) or call 1-877-FTC-HELP (1-877-382-4357).
- If your goal is to lower your student loan interest rate and monthly payment today, the best way to lower your student loan interest rate is to refinance your student loans. This student loan refinance calculator shows how much you can save when you refinance student loans.