Beware of Student Loan Debt Relief Operations
Consumers searching for student loan debt relief solutions should be wary of outlandish promises and claims that don’t stand up to scrutiny. These scams can damage an individual’s credit, drain savings accounts and leave borrowers owing more money to creditors.
Operation “Game of Loans”
Debt relief scams targeting student loan borrowers have reached a critical level and the Department of Justice, Federal Trade Commission, and other federal agencies are taking note. Operation Game of Loans is the first coordinated effort between federal and state enforcement agencies to stem the rising tide of scams. The game involves 36 different actions against scammers accused of collecting more than $95 million in fees and payments from unsuspecting consumers. In many cases, these scammers collected upfront fees promising services that were never delivered. For example, promising to process loan deferments, modify repayment plans, discharge loans, etc. The scammers merely collected the funds and did none of the work which meant that loans continued to accrue interest and penalties, and consumers pulled into the scam fell deeper into debt.
Targets are Plentiful
Nationwide, 42 million Americans have student loans. In total, there is $1.4 trillion in student loan debt. This provides plenty of victims for scammers to target. Using everything from impressive titles on official-looking stationary to forged government seals on the envelopes, scammers cast wide nets that are ensnaring an increasing number of victims. These notices and promises from companies called Strategic Student Solutions, Student Aid Center, Student Debt Relief Group and many others sound official and plausible but don’t pass the snuff test.
Protection Against Scams
Negotiating with representatives from the government and the authorized representatives of private lenders is always the best way to avoid scammers. A debt relief lawyer can help individuals negotiate the best possible terms and settlements with these entities. These can include loan deferments, discharges, loan forgiveness, consolidation, and modified repayment plans. A debt lawyer can also help borrowers understand loan terms and their repayment obligations.
For student loan debt relief programs, borrowers should remember that if it sounds too good to be true, it most likely is. Because of the prevalence of scams targeting those with student loans, an ounce of caution is most certainly better than the pound of damage that can occur when a “good deal” turns into a bad burn.