Avoid Companies Offering Student Loan Debt Relief for a Fee
The Department of Consumer Protection, the Department of Banking, and the Office of the Attorney General are warning residents with student loan debt to avoid companies that promise to provide student loan debt relief, but for a fee. Student loan debt is an increasing financial hardship for Connecticut residents. Some unscrupulous companies take advantage of borrowers who are trying to manage or lessen their debt, often charging high up-front fees and not offering any services beyond what borrowers can get at no cost by contacting their loan servicers or the U.S. Department of Education.
Some of the warning signs that a student loan debt relief companies may be trying to scam borrowers include:
- High up-front fees;
- Recurring monthly charges;
- Promises of immediate loan forgiveness or total debt cancellation;
Requiring borrowers to sign over a power of attorney or "third-party authorization;"
Asking for borrowers' Federal Student Aid PINs;
Falsely representing an affiliation with the United States Department of Education;
Selling a one-size-fits-all solution that might not be appropriate for all borrowers.
The United States Department of Education's Federal Student Aid website-- https://studentaid.ed.gov/repay-loans -- contains a number of links to information about student loan repayment options and how borrowers can identify their student loan servicer.
The CFPB's student loan repayment site-- http://www.consumerfinance.gov/paying-for-college/repay-student-debt/. This site explains options available to borrowers with federal and non-federal (private) student loans.
The National Consumer Law Center's Student Loan Borrower Assistance Project website at www.studentloanborrowerassistance.org.
Borrowers who believe they have been the victim of a debt relief, loan forgiveness or refinancing scam are urged to contact:
The Office of the Attorney General at (860) 808-5318 or firstname.lastname@example.org.
The Department of Consumer Protection at (860) 713-6300 or email@example.com.
Complaint forms are available at http://www.ct.gov/dcp/cwp/view.asp?a=1629&Q=274424
The Department of Consumer Protection works to ensure a fair marketplace for all Connecticut consumers through regulation and monitoring, enforcing the law, and educating and empowering consumers.
The Department of Banking is a state agency that is responsible for the regulation and examination of financial institutions and various related entities that are chartered, licensed or registered by the state.
Office of the Attorney General:
Department of Consumer Protection:
Department of Banking:
Kathleen Titsworth860-240-8176 (office)