Taking on the Student Debt Crisis Standing for Students
What we are seeing.
We’re seeing a lot of students who are struggling to pay student loans turn to predatory debt relief scammers. These companies often pretend to be affiliated with the federal government, and charge exorbitant fees to help borrowers apply for repayment plans or loan consolidation. Students often don’t realize that they can apply for these programs on their own for free. With 40 million Americans owing over $1 trillion in student loan debt, this is an issue we need to address now.
The Problem
There are two problems here: 1) federal loan servicers who are supposed to help students manage their loans and make them more affordable are falling down on job; 2) because of this, debt relief scammers are stepping in to fill the void, driving students further into debt.
The Solution: Standing for Students
First, we are committed to shutting down fraudulent debt relief scammers that hurt students in our state. Second, our students need to know they have a variety of repayment options and that free services are available to help them manage their student loan debt.
Taking Action
The predatory debt relief firms, Student Loan Processing and Direct Student Aid, charged illegal fees, used aggressive marketing practices, and misled borrowers about their ability to arrange lower monthly payments for their loans. They will no longer operate in our state and our nearly $100K settlement with them will go straight back to the students they ripped off. We will continue to pursue debt relief scammers preying on students in our state.
AG's Student Loan Assistance Unit
Where the federal loan services have failed, we are stepping up. We have created a new Student Loan Assistance Unit within our office that is dedicated to provide assistance to borrowers in need of help. The new unit will help borrowers apply for more affordable repayment plans, explore options for getting out of default, and seek loan discharges when appropriate.