August 24, 2014

Student loans scammers want your cash

Debt-burdened college graduates are ripe targets for scams that come in the guise of programs offering help.

If you re a University of Washington Husky or a Washington State Cougar, you probably have one thing in common

debt from college loans.

It s estimated there s over a trillion dollars in student loan debt out there now. And obviously many students are

struggling to pay that debt off, said Chuck Harwood of the Federal Trade Commission.

Harwood said debt-burdened graduates are ripe targets for scams that come in the guise of programs offering help.

Some scammers will claim they can consolidate student loans and help consumers pay it off faster or make cheaper

payments, Harwood said. Some scammers will claim they can help students or consumers who are already in default

get out of default.

The State of Illinois is suing two companies that promised such help, but instead charged applicants hundreds of

dollars and didn t come through with the promised relief.

Harwood said similar lawsuits are likely.

They re filing them because the scammers are collecting large amounts of money up front and not providing

services, the scammers are promising services that can be obtained for free, and the scammers are not assisting

consumers to get out of their debt burdens, he said.

For anyone looking for help managing student loan debt, Harwood recommended contacting the U.S. Department

Education first.

U.S. DOE has excellent online resources talking about consolidation including consolidating debt, finding ways to

pay off the debt by paying off smaller amounts at a time, Harwood said, adding: It also has information on how to

deal with debt collectors who call in connection with a student loan that may be in default.

Military service members are urged to be careful, as they could lose some special protections by switching to the

wrong type of consolidation loan. The Department of Education s website has information for people serving in the

military (https://studentaid.ed.gov/types/grants-scholarships/military), as well as the Consumer Financial

Protection Bureau. (http://www.consumerfinance.gov/f/201210_cfpb_servicemember-student-loan-guide.pdf)

Harwood also recommended that borrowers check the loan s fine print:

Make sure understand the terms both of your current loan and whatever new loans are being offered. Sometimes you

ll find that your interest rate may go up slightly with a consolidate loan. Sometimes you ll find that you ll have

to pay over a longer period of time or some of the discounts you re entitled to may only count if you have a

certain type of loan.

The FTC has its own student loan information guide on its website: http://www.consumer.ftc.gov/articles/0160-

student-loans

Bottom line, know your loan, before your loan owns you.

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The above statements do not represent those of Weston Legal or Michael Weston and they have not been reviewed for accuracy. The statements have been published by a third party and are being linked to by our website only because they contain information relating to debt. Nothing in this article should be construed as legal advice given by Weston Legal or Michael Weston. To view the source of the article, please following the link to the website that published the article. Articles written by Michael W. Weston can be viewed here: To report any problem with this article please email studentloan@westonlegal.com