Students have amassed $1.4 trillion in debt and counting, according to Collegedebt.com. But on top of crippling debt loads, borrowers also have to worry about a massive rise instudent loan scams…
These scams are being pushed under the guise of "student debt relief." They are designed to trick borrowers into paying money to lessen their financial burden.
Here's how it works…
Scammers offer to help loan borrowers for a fee. Then, instead of providing advice tailored to each borrower's situation, the scammers offer advice that can be obtained from the government for free.
According to a study conducted by NerdWallet (a personal finance website that helps people manage their money) and a student loan advocacy group, nearly 60% of the 6,300 student loan borrowers sampled stated they saw ads for these "relief programs."
Student Loan Scammers Make Millions
Student Aid Center, a Florida-based debt relief company, made more than $36 million by hooking students with ads like, "$17,500 in Up-Front Forgiveness?"
Sure enough, it was too good to be true…
District Attorney General Karl A. Racine found evidence that the company was charging $600 to $1,000 for debt relief services, but all the company did was mail out paperwork borrowers could obtain for free.
There is currently a lawsuit pending against Student Aid Center, according to The Washington Post.
Student loan scams are working because of the confusion surrounding options for student loan debt reduction.
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