There are several private companies that promise to help student borrowers manage their loans. However, these same companies are charging hundreds of dollars in service fees. The kicker? All of these services are offered free by the federal government, according to a report released Wednesday by the National Consumer Law Center, a national non-profit that advocates on behalf of low-income individuals.
According to the Huffington Post, NCLC found one company used its fine print to bury a fee of $445 to enroll borrowers in a government program, with a subsequent monthly charge of $39. Similar fees were imposed by other companies, with enrollment charges of up to $1,600 and monthly fees for ongoing services ranging from $20 to $50. The report said borrowers were either not informed of such charges, or the disclosure was placed in the fine print of contracts and on websites.
Nationwide our student debt deficit is over $1 trillion dollars, and it is the number 1 cause of bankruptcy in the nation… which is funny because you can’t get rid of student loans by filing for bankruptcy.
Government Programs Offer Same Services for Free
Government programs offer free enrollment and are designed to help lower monthly loan payments for struggling graduates, but the companies did not clearly explain this difference to customers, the report found.
“At a minimum, it is deceptive that most of the companies fail to prominently disclose that ‘their’ programs are actually government programs that an individual can access on her own at no cost,” the authors wrote.
If you are in need of student loan help, or with managing your payments and figuring out how to live properly while paying down your school debt, then contact a legit government company that will do all this for free.
Sources: Huffington Post | National Consumer Law Center