For many Florida residents, the cost of a college education is far more than what was anticipated or planned for. Once studies are complete, many people find that they are unable to repay those loans as agreed upon. The next step is often making an application for loan servicing through the federal government. However, consumers should be aware that there are a wide range of debt relief scams aimed at the loan servicing process.
One red flag that a debt relief program is a scam involves a push for loan consolidation as the only available debt relief option. While consolidation is a solid choice for many consumers, it is not the only available choice for dealing with student loan issues. Consumers have a range of other repayment options from which to choose, and these should be considered in addition to pursuing consolidation.
Perhaps the most obvious sign that a debt relief offer is a scam is the insistence that the process of applying for loan servicing is difficult and lengthy. In reality, the application process is very straightforward. The average borrower can complete the documents online within 20 to 30 minutes, and detailed instructions are available.
For those in Florida who are saddled with high levels of student loan debt, the need for debt relief is understandable. In many cases, this is just one of many financial obligations that have gone unpaid due to factors outside of the borrower's control. When debt levels have outpaced a consumer's ability to repay, personal bankruptcy can offer a solution. While student loan debt is not easily discharged through bankruptcy, the elimination of other forms of consumer debt can make student loan repayment easier to manage.
Source: Deseret News National, 9 ways to spot and avoid a shady student loan 'debt relief' agency, Jan Miller, March 26, 2014