Tuesday, September 22, 2015
Are Student Debt Forgiveness Scams The Next Mortgage Meltdown?
With student loan defaults on the rise, regulatory agencies are increasingly concerned about borrowers being preyed upon by student debt relief scammers. These scammers, which promise students they can cut their student loan payments by 50 percent or more, take advantage of students’ lack of knowledge about repayment options and a lack of intervention by student loan servicers that are paid by the federal government.
Sam Adler-Bell, a policy associate for The Century Foundation, who focuses on research surveillance, privacy, and economic justice, experienced how borrowers are targeted firsthand when he was called by a student debt relief scammer a few weeks ago. He wrote about his interactions with one company, Student Debt Relief, and how it operates in a regulatory grey area. Mary, a representative of the company whom he spoke to on the phone, explained why he needed the service, even though he could easily do it for free...: