Blog Post  Students Rejoice: The FTC Cracking Down on Student Loan Debt Relief Scams

Student loan debt can be difficult to manage, especially when the average student holds about $30,000 in debt. So it is not surprising that many look to companies offering promises of loan consolidation or assistance with repayment.

In March, we warned about student loan debt relief programs and how consumers can avoid them. And today, the FTC announced they filed charges against several of these companies for lying to consumers about providing student loan debt relief and charging illegal upfront fees.

Strategic Student Solutions, Student Relief Center, and related companies took money from consumers for loan forgiveness or payment reduction and credit repair services, but never enrolled the consumers in such programs and often kept the payments for themselves. In fact, the FTC alleges that the owner of Strategic Student Solutions actually used some of the money to pay for personal expenses.

The FTC suggests that consumers who paid money to Strategic Student Solutions or Student Relief Center contact their loan servicer. Additionally, it’s wise to remember:

• If you’re having trouble repaying your loans, talk with your lender first. You may have options such as deferring payments or decreasing the payment amount.
• Consumers with multiple federal education loans can apply to consolidate those loans into one loan. There is no fee to do so and consumers can apply right on the U.S. Department of Education’s website.
• Consumers who are considering paying for student loan relief should ask questions before signing up. If the company does not want to answer questions, it’s a red flag.
• Look for reviews and complaints against these companies using the Better Business Bureau website or other trustworthy sources.
• If the company promises to provide immediate relief, run the other way. Student debt relief companies advertise that they can get your loans forgiven immediately. Loan forgiveness doesn’t happen automatically!