Chase stops consolidating school loans
“The worst scams are the ones where people are paying a large upfront fee and nothing happens to their student loans,” said student loan expert Robert Farrington, who runs a website called The College Investor. These companies act illegally in a variety of ways, including “charging illegal advance fees before providing any services, deceiving customers about the costs of their services, falsely promising lower monthly payments, falsely claiming quick relief from default or garnishment, and falsely representing an affiliation with the U. Department of Education,” a Consumer Financial Protection Bureau spokesperson told .In all cases, the companies obscure the fact that they exist purely to profit.in March 2016, Director Richard Cordray noted the parallels between the two types of con.“We see more and more companies and websites demanding large upfront fees to help student loan borrowers enroll in income-driven plans that are available for free,” Cordray said in a statement.In 2015, one in six people with student loans from the federal government were in default, according to .That’s around 3.6 million people desperate for a solution to mounting debt.Several debt experts I spoke with characterized them as “fly-by-night.” The phrase “whack-a-mole” was also used repeatedly, since many of the companies are small operations that simply declare bankruptcy, change their names, and start over when complaints roll in, making them difficult to catch and permanently stop.It’s stand-out villainy in an industry rife with bad guys.
These kinds of ads use generic, benevolent-sounding names like College Education Services and Student Aid Institute to sound legitimate, but in reality they are often ramshackle operations designed to disappear when they’re scrutinized.
There are a few different models of the “Obama’s student loan forgiveness” ploy and other too-good-to-be-true gambits.
Some of these companies convince students to pay them to act as superfluous middlemen, and charge steep payments to do what any student can do for free.
The third-party companies that manage student loans are an even more scurrilous element of the crisis.
No matter where people go to school, once they receive student loans, the companies that help manage those loans often fail to help them pay off their debt effectively.