- Various government agencies have noted concerns with respect to student loan debt relief practices, including the Consumer Financial Protection Bureau (“CFPB”), the Federal Trade Commission, and the Department of Education.
- Beware of promised immediate loan forgiveness or debt cancellation. Student loan debt relief companies or law firms do not have the ability to negotiate with Sallie Mae for a “special deal.”
- They may advise you to stop making loan payments to your student loan servicer, which may result in delinquency, default, or your credit history being negatively impacted.
The CFPB has highlighted several warning signs that a student loan debt relief company may be trying to take advantage of you:
- Pressure to pay high up-front fees. It can be a sign of a scam when a debt relief company requires you to pay a fee up-front or tries to make you sign a contract on the spot. These companies may even make you give your credit card number online or over the phone before they explain how they’ll help you. Avoid companies that require payment before they actually do anything, especially if they try to get your credit card number or bank account information. Not only is free assistance available through your student loan servicer, many times taking payment for debt relief services before providing help is illegal.
- Demands that you sign a “third party authorization.” You should be wary if a company asks you to sign a “third party authorization” or a “power of attorney.” These are written agreements giving them legal permission to talk directly to your student loan servicer and make decisions on your behalf. In some cases, they may even step in and ask you to pay them directly, promising to pay your servicer each month when your bill comes due.
- Additional information about student loan debt relief scams is available at:
- If you’re having difficulty repaying your Sallie Mae loan, call us at 800-472-5543 (800-4-SALLIE). We can work with you to help you get back on track.