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Are student loan debt relief firms in Appleton a rip off?

With student loans rising and interest rates going through the roof, many debtors are looking for help but not all help is created equal as some can be more of a detriment than a benefit. Appleton residents should carefully scrutinize all student loan debt relief firms to ensure they are offering legitimate services that are worth the money.

Several members of Congress are taking a stand against student loan debt relief firms that charge student loan debtors hefty fees for utilizing federal programs that are already free. An investigation found that these firms were charging student loan debtors up to $1,600 up front and $50 per month for these free government programs. The National Consumer Law Center reported that these firms were cashing in on desperate and confused student loan debtors struggling with repayment. According to the report, some student loan debt relief firms are characterizing federal programs for student loan debt relief as their own and charging student loan debtors hefty fees to enroll in these free programs. Lawmakers are proposing an investigation into these firms.

There are many free federal programs already available to assist student loan debtors who are facing financial challenges. There are federal programs such as forbearance, deferment, consolidation and income based repayment plans. There are also federal programs for loan forgiveness that many are not aware of. For example, loan forgiveness is available for borrowers in the event of death or total disability. Loan forgiveness is also available for full time teachers up to a certain amount, full time public service workers and in cases where there was a fraudulent loan certification by the school. These categories are not automatic and certain conditions must be met in order to qualify. Student loan debtors can explore the government websites for more details about the various student loan repayment and loan forgiveness programs available without cost.

Student loan debtors in Appleton that are facing financial challenges can not only explore some of the federal repayment programs available but bankruptcy may also be an option. Filing for bankruptcy can help student loan debtors to eliminate credit card debts that may free up more money for paying student loans.

Source:¬†Businessweek, “Student debt relief firms should be probed, 23 U.S. Senators say,” John Lauerman, July 11, 2013.

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