Unfortunately student loan forgiveness scams are all too common today. Most companies in the industry have quality ethics and strive to sincerely help their clients, but just like in any industry there are always a few companies who choose to be unethical. Recently the student loan industry has seen quite a few companies pose as if they are directly affiliated with the government, sign up clients for bad loans and outright lie to clients about how their loans work. In general, there are a lot of quality companies in the student loan industry, but it only takes a few to damage the perception of the industry as a whole. Recently a company by the name of SLF Center was accused of misleading a client into believing that they were able to offer her free loan forgiveness. However no company itself offers free loan forgiveness. The federal government is the only entity that provides loan forgiveness to borrowers who have federal loans.
THE SCAMS
When Vanessa Williams talked with SLF Center she was told that they offer ‘loan forgiveness.’ In reality what Vanessa was actually signing up for was loan consolidation. This involves merging separate loans into a single loan. Sometimes it can help lower borrowers interest rates slightly. The problem with this situation is that Vanessa was outright lied to.
Another company called Integra offered a similar type of scam to a borrower named Kory Turner. When Turner decided to sign up for Integra’s ‘loan forgiveness’ program he actually signed up for loan forbearance. This process allows borrowers to have a ‘grace period’ where they are not required to make their normal loan payments for a certain amount of time. The downside to forbearance is that interest is still active during the ‘grace period,’ meaning borrowers can end up owing more money than if they kept making payments according to their original schedule. Forbearance is not all bad news though. It’s usually very helpful for borrowers who need time in order to make payments. For example if a borrower lost their job and were un-able to make their loan payments until they found a new job. The problem with Turner’s situation is the same as Williams – the company outright lied. They also both ended up owing more on their loans than what they started out with. Both Turner and Williams along with about 60,000 other borrowers are participating in a class action lawsuit against Integra, SLF Center and a company by the name of Equitable Acceptance Corporation who allegedly created this scam.
THE GOVERNMENT IS THE ONLY ENTITY CAPABLE OF FORGIVING STUDENT LOANS
The best ways to avoid student loan forgiveness scams is by doing your own research and trusting your instincts. If any company ever says they are forgiving student loans themselves, run the other direction. The government is the only entity that can forgive borrowers federal loans. Unfortunately there’s been a fair amount of companies misleading borrowers into situations like the ones described earlier in this article. This hurts the industry as a whole and most importantly it hurts the borrowers who fall victim to these types of scams. If you’re interested in working with a company that cares about its clients, contact Hope Credit! We always want the best for our clients. We’ve worked with thousands of clients over the years and throughout that time we’ve helped numerous people achieve loan forgiveness. Feel free to contact us by clicking here.
Sources:
Jones. Hannah. (2018, October 2) Minnetonka company sued for tricking students into paying for free ‘loan forgiveness’ programs. Retrieved from http://www.citypages.com/news/minnetonka-company-sued-for-tricking-students-into-paying-for-free-loan-forgiveness-programs/494815821