Scammers are now targeting struggling borrowers on social media websites such as Facebook to offer student loan debt relief. Higher education and consumer protection officials say that if you see advertisements on social media sites they are likely a scam. These scammers are circulating personalized ads using school information that is posted on user profile pages.
These companies are not affiliated with any of the student loan servicers and are scamming borrowers with fee-based assistance they can get for free through the federal government’s financial aid office.
Student loan debt in the United States has reached nearly $1 trillion making it the second largest consumer debt market. Approximately eight million federal and private student loan holders are in default and millions more are struggling to make their minimum payments each month.
Moira Vahey, a spokeswoman for the Consumer Financial Protection Bureau (CFPB) said, “Companies offering these type services do not have the ability to negotiate with creditors in order to obtain a special deal under the federal student loan program.”
Companies such as College Education Services (CES) in Florida are telling borrowers they can have their student loans consolidated and lower their monthly payments. CES requires debtors to pay upfront fees and sign over power of attorney to the company. After failing to deliver results, there have been multiple complaints filed with the Florida Attorney General against this company.
Some debt relief companies promise to save borrowers thousands of dollars, charging them upfront fees and then enrolling them in a repayment plan that is available and free to anyone with a federal student loan.
The CFPB offers the following warning tips to borrowers when it comes to these so-called student loan debt relief companies:
- The promise of immediate loan forgiveness or debt cancellation;
- Demands for a power of attorney;
- Requests for federal student aid PIN numbers;
- Charging large upfront fees.
For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Related Resources:
http://www.winknews.com/2015/11/12/warning-student-loan-scams-hitting-swfl/
http://www.wvgazettemail.com/news/20160118/ads-offering-student-loan-relief-scamming-borrowers