Student loans are an ongoing problem, and it does not look as if they are going anywhere soon. With trillions of dollars in student loans, people in South Carolina and across the rest of the United States are understandably eager for a solution. Unfortunately, many student loan debtors were taken advantage of by fraudulent companies that offered relief.
Federal authorities believe that consumers were conned into paying over $95 million worth of upfront fees to deceptive businesses. These businesses allegedly portrayed themselves as affiliates of loan servicers and federal relief programs. Student loan debtors were promised that their debt would be greatly reduced or even forgiven altogether if they signed on with these companies, some of which advertised federal programs that were free to apply or that were only for a small percentage of borrowers that qualified.
This is not the first time that predatory businesses preyed on vulnerable consumers. Mortgage rescue companies were quite common in recent years, and many homeowners were put even further into debt after paying the upfront fees. These types of scams are still ongoing, and the Federal Trade Commission is combatting the issue.
Many people feel alone in their debt, which can make the possibility of paying up to have federal student loans disappear seem very appealing. However, it is virtually impossible to have these types of student loans forgiven absent proof of undue hardship. A more reasonable approach for most South Carolina debtors is to pursue personal bankruptcy, which can effectively reduce or forgive other debts, making it easier to repay student loans.
Source: ABC News, “Feds, 11 states crack down on companies selling student debt relief”, Stephanie Zimmermann, Oct. 13, 2017