Student loan forgiveness is pretty much every borrower’s dream, but the prospect of forgiveness can also be used to scam people which is what the Better Business Bureau (BBB) is warning students about in St. Louis, Missouri.
Earlier this week in a press release, the BBB issued an advisory that warned residents of St. Charles to be wary of Student Loan Forgiveness Agency, a ten-month old company that purports to help student loan borrowers reduce their debt. According to the release, the consumer watchdog said that it’s concerned with the name of the business because it implies that it can rid borrowers of their debt.
Despite the fact that full student loan forgiveness is hard to come by. What’s more, the BBB is concerned that the firm is charging an upfront fee which violates federal law. Another concern, the company is operated by Ashley Ezell who the BBB claims has been a defendant in two civil cases over failing to repay student loans. Summing it all up, the BBB gave Student Loan Forgiveness Agency an “F” rating.
The BBB said that they were alerted about the company by a potential client who got suspicious of the promises made by the company. Ezell reportedly claimed she could reduce the potential client’s student loan debt to zero, quite possibly one of the most indicative red flags for a scam. “Federal prosecutors have been very aggressive in going after so-called student debt relief companies in recent years,” Michelle Corey, president and CEO of the Better Business Bureau in St. Louis, said in the release. “These schemes have taken millions of dollars from consumers who are desperate to reduce or eliminate their student loan payments.”
This latest warning of a student loan scam comes at a time when debt holders are being crippled by outsized student debt, making them vulnerable and susceptible to scams. The nation owes more than $1.4 trillion in student loans with the average per borrower nearing $30,000. Many scam companies acknowledge this opportunity to tap into a desperate group of debtors. This latest BBB warning is not the first indication of a scam either; for instance, the Federal Trade Commission just issued a fine to several debt reduction companies operated by an individual from Florida. Efforts to profit of the student debt crisis are not limited to debt reduction scams. One woman from Georgia was just recently caught stealing identities and collecting financial aid paychecks for personal enrichment. In short, there are many ways to fall victim to a scam, but one of the simplest and easiest scam opportunities lies in the prospect of student loan forgiveness.
While it is very rare to see your loans completely discharged, many college students believe that a loan forgiveness program can help them. A recent LendEDU survey found that 49.8 percent of current college students believe that they will be helped by federal student loan forgiveness programs. On top of this, a separate LendEDU survey revealed just how desperate student debtors truly are. The survey found that more than half of college students would take a punch from former boxer Mike Tyson, give up all social media for life, abstain from alcohol, drugs, and coffee for the rest of their lives, all to get rid of student loans.
Author: Dave Rathmanner
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