Student debt relief schemes targeted by FTC

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Do you have a lot of student debt? Wish it would disappear? You’re not alone. Scammers know that people are struggling with debt. They’re targeting borrowers with phony student loan debt relief schemes that can make things worse.

Today the FTC and the State of Florida announced lawsuits against two student loan debt relief schemes — Consumer Assistance Project and Student Aid Center. The FTC also announced a settlement in a case we wrote about earlier this year.

According to the FTC, Consumer Assistance Project and Student Aid Center promised to get people’s loans forgiven or significantly reduced. Consumer Assistance targeted people online and over the phone, claiming it would get relief through government programs or by disputing loans. Student Aid Center used radio ads, text blasts, and featured ads in search results to promote “Obama Loan Forgiveness.”

But people who paid the companies didn’t get their loans forgiven or reduced. At best, the companies got people’s loans put into deferment or forbearance, where loan payments are postponed but the interest owed on them can keep growing. Student Aid Center made some situations worse by telling people to stop contacting their lenders and pay the company instead. People often ended up paying thousands, but didn’t get the promised relief.

Student loan forgiveness programs are available in very limited circumstances. You can apply for debt relief yourself; you don’t need to pay a company. The FTC has new education materials to help borrowers:

  • Student Loan Debt Relief explains how to spot a debt relief scheme, and what people struggling with student loans can do themselves.
  • Maria and Rafael Learn the Signs of a Debt Relief Scam tells the story of a couple trying to repay debt they accumulated for their daughter’s college education. It’s the latest in a series of graphic novels to raise awareness about scams targeting Latino communities.
  • This list shows every company and individual ever banned from providing debt relief and mortgage assistance relief services by an FTC order.
Tagged with: college, debt, loan, student
Blog Topics: 
Money & Credit

Comments

I'd like to get around by my self since my disabled hands can't move so I'm trying to get a motor scooter United health care one pay for it and the means Medicare won't cover it since there my second ins. And the first has to pay or 2nd won't pay

I have student loan from 1994 , when I went to Katharine Gibbs in Norwalk, and I had being paying since then, there was time when my husband was sick that could not paid. and now is with Granite State Management Resources, some times they take the money out and some times not. I still paying 99 dollars a month, and would like to know what other easy solution to get rid of this. I am senior now 67 years old, and live only with Social Security, I have being taking The developmental classes I Math and English, at Norwalk Community College so I can better my English. Thank You for your attention.

You may want to talk with a credit counselor about your debt. This FTC article has information about choosing a credit counselor.

Most reputable credit counselors are non-profit and offer services at local offices, online or by phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs.

You have rights when you deal with a debt collector. There are rules about what a debt collector may and may not do, and what you can do if a debt collector violates the law.

Recently I just started a payment plan to with a company that sounded legal and said if I didn't get it done now that I would never be able to consolidate my loans or apply for the loan forgiveness program. I am going through a divorce, have a child with a medical diagnosis that requires attention a lot and cannot afford to have some scam ran on me.... Please help with some type of advise

Many people face a financial crisis at some point in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse. The information in the FTC publication, Coping with Debt, may be helpful. For additional publications, please see Dealing with Debt.

I have experienced the very same since 2013. I thought they were a legitimate business because they had a website. Student loan processor. They had a lot if information about me. As a single mother with 2 disable kids. I was ready for a relief. I TEACH READING TO AUTISTIC MIDDLE SCHOOL LEARNERS Autistic learners so I just knew it was faith that I'm finally able to get approve for a loan forgiveness. UNFORTUNATELY it was not the case they have taken over 5k from me from 2013-3/2017. Which I thought it was GOING TOWARDS my loan for years. Instead they took over my entire life changed my address, phone number and email. I feel like a fool because I never checked I received receipts and emails on a regular. Until March 2017. Then I realized nothing waa ever applied to my loans and the BBB stated others are being defrauded by this one man job. I NEED HELP RECOUPING MY FUNDS and stopping these people. It's not fair to anyone especially to teachers who teach disable kids.

You may want to talk with a credit counselor about your financial situation. This FTC article has information about choosing a credit counselor.  Credit counselors can help you manage money and debts.

I'd like to get around by my self since my disabled hands can't move so I'm trying to get a motor scooter United health care one pay for it and the means Medicare won't cover it since there my second ins. And the first has to pay or 2nd won't pay

Great article and great advice. These schemes are targeting the fragile and need to be subject to the law. In my experience, having a financial expert witness, eg. someone from witness will surely help you get redress if you become a scheme victim. Please keep these articles coming!

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