Student Loan Debt Relief
Beware of companies that specialize in student loan debt relief. These companies charge large up-front or monthly fees for federal student aid services offered by the Department of Education and its student loan services for free. Such services include:
- Consolidating federal student loans;
- Changing repayment plans;
- Resolving defaults;
- Filing requests for borrower defense loan cancellation; and
- Other benefits and services that students are entitled to receive at no charge
In December 2014, the Consumer Financial Protection Bureau issued a consumer advisory (https://www.consumerfinance.gov/about-us/blog/consumer-advisory-student-loan-debt-relief-companies-may-cost-you-thousands-of-dollars-and-drive-you-further-into-debt/) concerning third-party debt relief companies that schools may wish to use in informing students about these companies.
The advisory includes four warning signs of third-party debt relief companies that student loan borrowers should avoid, including:
- Pressure to pay high up-front fees;
- Promises of immediate loan forgiveness or debt cancellation;
- Demands that you sign a "third party authorization"; or
- Request for a student's Federal Student Aid PIN or FSA ID
The above information is from the U.S. Department of Education Office of Federal Student Aid Electronic Announcement, March 30, 2016.