Student Loan Group, the Aliso Viejo, California-based debt resolution company, agreed to pay close to $400,000 in fines, settling claims that it defrauded student loan borrowers according to a North Carolina Department of Justice press release.
A complaint was filed by North Carolina Attorney General Josh Stein alleging that Student Loan Group illegally charged upfront fees to lower a borrower’s student debt. He went on to assert that the company failed to do anything for the borrower after the fee. Student Loan Group didn’t admit any wrongdoing and said that they opted for the settlement because of the costs associated with a protracted legal battle.
Student Loan Group agreed to pay out $375,000 to 377 affected borrowers in North Carolina. “Students across North Carolina with significant education debt deserve effective protection against fraud. It is illegal to charge borrowers an up-front fee for these services, and my office will not let it happen unchecked,” Stein said in the NC Justice Department press release.
Student Loan Group’s settlement is just the latest in a string of scams targeted at student loan borrowers the government has been cracking down on. With student loan debt around $1.4 trillion, cash-strapped borrowers are looking for relief and are more susceptible to scams. AG Josh Stein has been on the frontlines this year, taking action against several other debt relief companies. He led the attack on Orion Processing, Swift Rock Financial, World Law South, and Cutting Edge Collections; all we recipients of legal action in January and March. Additionally, just last month, the Federal Trade Commission (FTC) shut down three debt reduction companies in Florida for scamming people out of close to $2.4 million.
It’s not surprising there’s a lot of student loan scams going around. Student debt precludes student borrowers from doing all sorts of things including just getting by. Debt relief isn’t always free, but any company that charges an upfront fee is doing so illegally, taking advantage of the student loan situation. Hard sales and marketing tactics by a student loan debt relief company should have you running for the hills; spotting them early is the trick.
“To get you to act fast, scammers tell you that you could miss qualifying for repayment plans, loan consolidations, or loan forgiveness programs if you don’t sign up right away. Don’t be rushed into a bad decision,” the FTC warned on its website.
In general, there aren’t any deadlines for signing up for a repayment plan. Federal repayment plans are usually available to borrowers whenever they need to sign up, and private student loans only offer rigid plans to borrowers.
The federal consolidation loan program is open to federal student loan borrowers at any time; it is approached through a government website. Student loan refinancing is offered by reputable private lenders and banks who support their own widely-available loan consolidation applications.. If you are under pressure to sign up for these to hit a deadline, then you should understand that isn’t how either option works. They’re available for qualified borrowers to apply whenever.
Finally, the only student loan forgiveness programs are offered by the Federal government, so you shouldn’t listen to a third party about your eligibility. You should go directly to the government to check out your prospects for forgiveness.
Author: Donna Fuscaldo
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