Warning to College Students: Beware of These Shady Debt-Relief Practices

With the student loan debt soaring north of $1.26 trillion in the U.S., many students are looking for alternative solutions to help them pay off their massive loans. Unfortunately, some of those alternative solutions can wind up scamming unsuspecting students in the end. If you’ve fallen victim to shady debt-relief practices, contact our Ohio debt relief attorneys at Luftman, Heck & Associates at (888) 726-3181 to find out how we can help you.

New Graduates May Be Victims of Shady Practices

Students earning a bachelor’s degree can expect to be saddled with nearly $30,000 in loans. For those in graduate programs, that sum can easily reach into the six-figure bracket. Interest rates on these loans have increased, leaving many students with repayment options that are too expensive for their insubstantial first-job salaries.

Such was the case for a young veterinarian who became involved with a company, Student Loan Service (SLS) Managers, that promised to help pay off her $175k debt much faster than her current repayment program. The Student Loan Service Managers assured its customers that it worked with student loan programs to cut interest rates significantly, saving students years on their repayment plans.

SLS turned out to be less than honest about its services, collecting a one-time annual servicing fee as well as a monthly charge that was shaved off the student’s loan payment. The company was unavailable to consumers who called for further information or to sever ties with SLS completely. After a year-long battle, the vet was finally able to drop the shady debt relief company. Unfortunately, due to her forbearance status, (SLS had previously requested a forbearance on her behalf using a signed Limited Special Power of Attorney) her loan program had tacked another $7,000 in unpaid interest onto her total remaining balance.

Finding the Right Debt Relief Program

Student debt relief companies have historically been able to get away with less-than-noble practices because their customers are both uneducated about repayment options and desperate to get these intimidatingly high loan balances off their plates.

When it comes time for you to pay back your loans, it’s a good idea to start looking at the repayment programs that the U.S. Department of Education (USDE) has to offer. There are a variety of plans that do not charge monthly or annual processing fees of any kind. These plans cover a wide range of needs.

The standard repayment plan allows graduates to pay off loans as fast as possible, typically within a 10-year period. Income-driven plans are calculated based on earnings, some of which allow the student to pay over a 25-year period and forgive any outstanding balances left at the end of that time frame. There are other repayment plans that can be selected depending on the type of loan and specific situation.

The USDE provides forbearance options which allow a student to temporarily reduce or stop paying on their loans. A forbearance can be an excellent tool to use, but, it is important to keep in mind that the interest on the loan(s) will continue to accrue during that period of forbearance. If you decide to refinance your loan through another company, you may lose the ability to apply for a forbearance altogether.

If you are interested in seeking out a refinance option with a non-governmental program, make sure you do plenty of research. SLS employees used tactics to convince callers that time was of the essence. This sense of urgency encouraged the callers to make snappy decisions regarding their repayment options and discouraged any kind of research into their company at all. A quick internet search proves that SLS is not the most scrupulous company – the Better Business Bureau has given them an F rating and flagged their account for “false and deceptive advertising and trademark infringement,” among other issues.

The USDE has recently implemented the Enterprise Complaint System in which complaints can be filed and viewed by other students, providing easy access to review debt relief companies and weed out the bad guys. The Enterprise Complaint System is not just a great resource to use as a watch dog for potential scammers. This system gives you access to the positive reviews as well, proving there are some debt relief companies that are legitimate and can help.

How Our Ohio Debt Relief Attorneys Can Help

Debt relief attorneys can offer valuable education and advice regarding your student loan repayment options. If you have questions about student loan debt relief companies, you can contact Luftman, Heck & Associates to get a fee consultation on your case. Call us today at (888) 726-3181, or send an email to advice@ohiodebthelp.com.