The District of Columbia Department of Insurance, Securities and Banking has some information concerning student loan debt relief scams which you might want to share with your clients.
The Department is warning residents to be on the alert for companies offering deceptive student debt relief services. These services are often promoted through web and social media ads or appear in search engine results.
The scam involves private companies that promise student loan debt relief services for a fee. In actuality, these services are available for free from loan servicers or providers. Free services include:
- Loan consolidation
- Payment modification
- Income based repayment plans
- Public Service Loan Forgiveness
- Total and Permanent Disability Discharge among other forms of discharge
While not all companies offering such services are ill-intentioned, according to an action filed by the Consumer Financial Protection Bureau in 2019, one scam operation alone defrauded thousands of federal-student-loan debtors of more than $71 million.
To avoid becoming a victim of deceitful student loan debt relief scams, remind your clients to:
- Never pay upfront or pay monthly fees to get help.
- Beware of any company promising immediate loan forgiveness.
- Not share personal or sensitive information.
- Check with their loan provider to see if the same services are available for free.