Student Debt-Relief Companies Are Often a Sham

Suffocating student loan debt is one of the most serious financial problems facing a generation of Americans. Worse still, it makes student loan borrowers a tempting target for unscrupulous companies.

According to consumer advocates, complaints and suits filed against companies offering dubious student-debt relief programs are on the rise, according to recent news reports. The companies lure in borrowers by presenting themselves as empowered by the government to help lessen their debt burden but are really after easy money.

Often they push borrowers to sign contracts with hidden fees, and make promises they have no intention of delivering on and couldn’t even if they did, such as offering loan forgiveness. These tactics are similar to the ones used by companies in the wake of the housing crisis that took advantage of homeowners suddenly facing an upside-down mortgage.

If you’re struggling with student loan debt, here are some better options:

Call your loan servicer. Many of the services offered by these student-debt relief programs you can do yourself for free. The less fraudulent of these companies are merely taking advantage of the fact that there is a lot of confusion around student loans;

Check out your student-loan forgiveness options. Depending on the field you work in, you may be eligible for a student loan forgiveness program, and you don’t need to pay a third-party company to enroll you. For federal programs, you can check studentaid.ed.gov to find out if you qualify. And this site has a list of student loan forgiveness programs by state; and

Check with Hopewell Federal Credit Union. We may be able to help, but if we can’t, we can point you to credible resources and help you get your other finances under control so your student debt doesn’t feel quite so burdensome.