Want to start a student loan relief business? According to a recent ad that will give you all the tools to do just that, you can learn the tricks that let you cut someone’s private student loan payment by more than 50%.
Clients who sign up for this program apparently also get a written guarantee and credit restoration included.
It sounds like a good result to offer to people who need help with their student loans.
And with so many people falling behind on their student loans, it sounds like it’s extremely profitable for the business owner.
But remember that if something sounds too good to be true then it probably is. So, too, with these student loan relief businesses that are popping up all over.
In fact, it’s scams like these that have led Attorneys General in Illinois and Washington State, as well as the CFPB, to take drastic action.
Lower Your Private Student Loan Payments!
The first problem is the promise that the company’s program can reduce private student loan payments by more than half.
The only way a borrower can get a payment that much lower than the contractual payment is if they’ve already defaulted. In many cases, these super-low payments are available only if you’re being sued and actively defend your case.
In other words, payments this low are usually part of a settlement deal that comes only after you’ve gone significantly past due on your private student loan and have wrecked your credit.
Just as in credit card settlements, no private student loan creditor would modify loan payments down to 50% or less if you’re making on-time payments.
Deal With Your Federal Student Loans!
Federal student loans don’t offer massive settlement options, and the scammers know it. So for these loans they offer a one-size-fits-all approach.
Every federal student loan gets consolidated and the borrower gets put into Income-Based Repayment.
For some people, that’s the right choice. But not for everyone.
Consolidation isn’t the only option. And for some federal student loan borrowers, it’s not an option at all.
For the student loan companies that have cropped up overnight as the mortgage mess has been replaced by the student loan problem, profitability means doing the cheapest and quickest job without regard for whether it’s the right one.
It’s A Sure-Fire Way For You To Lose Your Money
The ad that teaches how to operate one of these businesses theoretically offered access to attorneys to help with compliance reviews.
Good thing, if that’s true. Because anyone who wants to become a student loan scammer is going to need all the legal help they can get.
Most states have debt settlement or modification laws and complex licensing requirements.
These companies that advertise credit repair also need to comply with the Credit Repair Organization Act.
I’d be shocked if these companies are doing anything more than paying lip service to these consumer protection laws.
Avoid The Scammers By Doing This Instead
If you’re looking for help with your student loans, start with your servicer – that’s the company that sends you bills each month.
Contact the CFPB and/or Department of Education Ombudsman.
If that doesn’t help, reach out to a student loan lawyer.
There are better ways of making sure you don’t fall prey to one of these student loan scam companies.
I hear radio ads for these so called “student loan debt relief” companies all the time. They purposely mislead the listener to believe that they are associated with the government or a government program. Some add the word “federal” to their company name for exactly this purpose! They all discuss “new federal programs” that the listeners will qualify for. Seeing clients who fall prey to these scams and lose thousands of dollars and often times wind up in a worse position than when they started, I feel nothing but anger and disgust when I hear these ads. Now you are saying that there is a company selling kits or business models on how to create one of these companies?!?