The Student Loan Debt Forgiveness Scam, and How NOT to be Taken In

In the past year, there has been an increasing number of "student loan debt forgiveness" companies advertising their services to unsuspected borrowers, basically advertising that, if you utilize their services, your student loan debt will be completely forgiven, and go by such names as Student Loan Services, Federal Loan Forgiveness, and Student Loan Forgiveness, just to name a few. Let me clue you in on this- it is complete and total poppycock!  Basically, these companies are third party companies that have nothing whatsoever to do with debt forgiveness. They will lure unsuspecting, and more often than not gullible borrowers in by promising total loan forgiveness, all for a fee ranging anywhere from $300 to as high as $1500 or more. Once said fee is received, they will just access your federal student aid information, and attempt to consolidate your loans through the Department of Education with one of the four main Department of Education affiliated servicers. They will also outright promise lower payments without telling you that the lower payments are based on low income requirements, so if you're annual adjusted gross income is above a certain amount, you're basically out of luck. These companies seem to thrive on misleading gullible people into believing something that is not true, and take their money while doing so. More often than not, unsuspecting borrowers find themselves with a consolidation that they did not ask for, and loan payments higher than promised because they do not qualify for the promised lower payments. Said misled borrowers will then call the loan servicing company that the loans were consolidated with, and try to cancel it, but by the time they do, it is too late, as the loans have already been consolidated, and that cannot be undone, therefore, they are stuck with something they did not want.

Also, note, while there are some forms of loan forgiveness that ARE offered through the DoE, they are not instant, and require you to pay back your loans on one of the income driven repayment plans for a certain amount of time (usually 20 to 25 years for regular borrowers, or 10 years for borrowers working in the public service sector.)

Below are a few simple tips to avoid falling into this "loan forgiveness" trap:
1) If you get correspondence from one of these companies, tell them you do not want to commit to anything until you consult with a loan specialist at your loan servicer. More often than not, if you are eligible for consolidation, and lower income driven repayment plans, your servicer will be able to process those for you, and direct you to the department of education website to consolidate your loans, if that is what you want to do. As these servicers and the Department of Education's Federal Student Aid division can provide these services for free, it will save you a lot of money and a lot of grief in the long run.

2) If you continue to get phone calls from said companies that pressure you into using their service, block the number and contact the better busness bureau.

3) If you have been misled into believing these false promises, and have been charged for incomplete or improperly processed services by one of these companies, report them to one of the state or national consumer protection agencies or better business bureau. They should be able to intervene on your behalf, and may be able to get some of your lost money back.

Doing the proper research could save you a lot of trouble in the future.