Phone Call Us 414-326-9231
Toll Free 866-678-9352
Text Us 414-277-7742

Debt relief companies dupe student loan debtors

Government officials are warning that many debt settlement companies are beginning to take advantage of Americans with hefty student loan debt.

In the past, debt settlement companies often focused on people with credit card and mortgage debt, but today they see the nationwide surge in student loan debt as a potential gold mine.

In fact, Americans now owe $1.2 trillion dollars in student loan debt, and many borrowers simply cannot afford to pay back the educational loans they have taken out. 

The Consumer Financial Protection Bureau reports that seven million people in Wisconsin and the rest of the United States have already defaulted on their student loans, and the number continues to grow each month.

In many instances, people who took out loans to attend college did so with the expectation that it would pay off in the long run by allowing them to eventually earn more money. However, many recent graduates are now working low-paying jobs that don’t require the advanced degrees they worked hard to obtain.

Oftentimes, debt relief companies promise to lower monthly debt payments in exchange for a large up-front fee. Some of the companies even pretend to be associated with federal debt relief programs even though they are private, for-profit companies.

So far, one state in the Midwest already plans to crack down on the predatory practices. The attorney general of Illinois has filed suit against two debt relief companies for shady student loan practices, including misleading borrowers about the fees they were charged and charging for assistance that could have been obtained for free through the U.S. Department of Education.

Ultimately, people need to be cautious when looking for help with overwhelming student loan debt. The best option is to find a reputable bankruptcy law firm in your area that provides services regulated by the state bar association.

Source: The New York Times DealBook blog, “Companies That Offer Help With Student Loans Are Often Predatory, Officials Say,” Rachel Abrams and Jessica Silver-Greenberg, July 13, 2014

No Comments

Leave a comment
Comment Information

Contact Our Milwaukee Law Firm

Reach Miller & Miller Law, LLC, online or call us at 414-326-9231 to schedule a free initial consultation. Our law office also provides Spanish language services. Se habla español.

To schedule an initial consultation, call 414-326-9231 or contact Miller & Miller today.

Free Case Evaluation

* indicates required field

Milwaukee Office
633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Law Office Map

Kenosha Office
6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Law Office Map

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Law Office Map

Madison Office
2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Law Office Map

Glendale Office
6001 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Law Office Map