You’ve probably seen ads for companies that can help you lower – or even totally get rid of – your student loan debt. Some of those companies just take your money and do nothing for you.
The FTC recently filed a lawsuit against SLAC, Navloan, and Student Loan Assistance Center, three companies that ran an illegal student loan debt relief scheme. These companies claimed that they could permanently reduce monthly student loan payments and get partial loan forgiveness by enrolling people in legitimate government Income Driven Repayment (IDR) plans.
But the companies pitched their service with incomplete information and outright lies. They told people that lower payments from an IDR plan would last for 20-30 years when, in fact, the lower payments were only guaranteed for one year. Payments beyond that time depend on a person’s income and family size in the future. The companies also promised that a substantial portion of a person’s loan would be forgiven when, in fact, any forgiveness would only come after decades of payments (which could change from year to year), making the amount of any forgiveness impossible to estimate. And, to make themselves seem legitimate, the companies paid people to write positive reviews about them.
If you have federal student loans, you can get information on how to apply for temporary relief or lower your payment at StudentAid.gov/repay. If you have private loans, contact your loan servicer.
Also, because of the COVID-19 pandemic, the Department of Education is providing extra help to federal student loan borrowers. For more information, go to their Coronavirus and Forbearance Info for Students, Borrowers, and Parents page.
For more tips on how to avoid student loan scams, watch this video on YouTube:
Beware of Student Loan Debt Relief Scams
Spotted a student loan relief scam? Tell us about it at ftc.gov/complaint.