Students and graduates in the United States have a combined student loan debt of 1.3 trillion dollars. As a result, information from “student debt reliefâ€ companies are being mailed and promoted to recent graduates, promising to eliminate, consolidate, or lower student loan payments for a fee.
You may also have seen advertisements of student debt relief companies on social media, seemingly endorsed by celebrities who are paid to advertise the services of student debt relief companies on their Instagram accounts.
These companies’ marketing materials suggest that they are affiliated with the federal government. However, they are not!
The truth is that companies that claim to eliminate, consolidate, or lower your student loan payments cannot change the terms of your loan in any way. These companies are not a quick fix! In some cases, they will put you further in debt.
Typically, these third-party companies begin to contact you during your six-month grace period.
Everyday lenders are calling graduates, yet account holders (graduates) are ignoring their lenders. However, graduates will call a third-party company that they saw on their favorite celebrity’s Instagram page. And before they know it, they’re scammed out of hundreds of dollars.
Please note: Federal student loans can only be consolidated through the Federal Direct Consolidation Program.
Oftentimes, these third-party programs will do nothing for you, yet take your money as you provided them your bank account information to directly withdraw from your account.
There is no such thing as eliminating your student debt or companies offering you lower interest rates for a fee.
As a reminder, you do not have to pay ANY vendor to consolidate your federal loans! So, do not fall for student loan scams! Watch out for these corporations that capitalize off of students who do not understand the student plan repayment process.
Remember, if you choose to ignore your lender, they have the power to garnish your tax refunds and paychecks until your debt is completely paid in full. It is not what you owe, but who you owe! So be sure to protect yourself, and do not sign up for third-party “student debt reliefâ€ companies.
If you have been a victim of student loan scams or want to submit a complaint about your loan servicer, contact the Consumer Finance Protection Bureau at (855) 411-2372.
Jessica Brown, CEO of College GurlÂ has been helping students, parents, and guardians successfully navigate the seas of financial aid at post-secondary institutions as a financial aid administrator at various universities.Â For more information on College Gurl, please visitÂ www.collegegurl.comÂ or follow College Gurl on Instagram and Twitter @collegegurljb.