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Graduates: beware sketchy student loan debt relief schemes

It is well-known right now that burdensome student loan debt is a major problem for a growing number of young Americans. Together with disappointingly slow growth in the job market, student loan debt has literally crushed the spirit of many. Along with this, there has been a corresponding growth in the number of debt relief schemes aimed at graduates.

For graduates faced with offers for debt relief, it is important to really be cautious as there are some bad actors out there. Getting involved with such a scheme could leave one with further financial troubles. Here we’ll look at several things to watch out for in such schemes. 

One of the biggest things to realize is that debt relief schemes aimed at burdened college graduates are often charging for things that graduates could do themselves without much trouble. Whether it is applying for a loan, applying for loan consolidation, or applying for income-based repayment, these processes are relatively easy to navigate and can be done in a minimal amount of time. Paid help is not necessary.

Another thing to be aware of is ambiguity regarding fees. Different debt relief companies vary in how they charge fees, but regardless of the arrangement, it should always be clear to the borrower what the terms are. When things are ambiguous, it is a bad sign.

Similarly, borrowers have a right to know all their options in terms of debt relief. With respect to consolidation, it is important for borrowers to understand what this means for them and whether it is the right move for them. This isn’t always the case.

Because student loan debt is very difficult to discharge in bankruptcy, the options for serious debt relief are limited, but there are ways out of the forest for borrowers who are patient. If you are in such a situation, just beware of schemes offering to help with your situation. If you cannot understand the benefits of a scheme or the terms of the arrangement, you should be wary. 

Source: Desert News, “9 ways to spot—and avoid—a shady student loan ‘debt relief’ agency,” Jan Miller, March 26, 2014. 

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