The Student Loan Ranger receives many questions from readers. On occasion, we like to share some queries that other borrowers are likely to find relevant.
Here’s a sample of some we’ve addressed recently. Letters have been edited for clarity and to protect readers’ privacy.
Q: I recently signed up with a debt-relief company to get my student loans forgiven or lowered. My federal loans fortunately seem to be seized temporarily, but my private loans seem sketchy now. I have been paying the company since June of this year.
The company stated that whenever Sallie Mae, my loan provider, called I should not answer the phone. I was told that if the calls continue I should reach out and they would handle the issue legally.
The problem is Sallie Mae’s records are showing that I am not paying my loans at all and the monthly total has been increasing. I reached out to the debt-relief company and none of the numbers I’ve used in the past worked anymore and the email I sent failed all of a sudden. Sallie Mae is going to try and garnish my mother’s paychecks because I am not working currently and she is a co-signer on this loan.
Are debt-relief companies trustworthy? What loan forgiveness company would you recommend?
[Learn how to avoid falling victim to debt-relief companies.]
A: The Student Loan Ranger normally does not recommend companies or comment about particular ones . The Federal Trade Commission has recently taken action against some debt-relief companies , as have several state attorneys general .
Here’s the bottom line: You should never have to pay for help with your student loans. While it’s not illegal to charge for such services, it becomes illegal when what these companies advertise or promise — or who they represent themselves to be — is misleading or outright false.
Most of these companies are providing document processing services and, at best, are simply filling out a form to get you access to a program that you could access for free by working directly with your loan holder or any number of available free services. There isn’t a person or entity in the world that can get you a better deal on your student loans or access to a forgiveness program or other benefit that you can’t get yourself.
In prior posts, we’ve given advice on how to recognize bad debt-relief companies, but there are a few red flags in your email worth noting and that may help other readers. The biggest warning sign was when the company told you to stop talking to your loan holder — which means it is trying to hide its actions on your loan account from you. This clearly turned out to be the case.
We did connect you with someone who was going to try and advise you, for free, on how to work with the private loans now that you are in this situation. We also gave you information about the FTC’s action s and recommended you contact it to see if once the legal action is complete, you would have any access to refunds of what you paid to this company.
[Learn ways to avoid being duped by a student loan service.]
Q: I am an ITT Tech graduate. With the recent closure of all its campuses, is there any help I can get to get rid of my $30,000-plus in loans? This is a bogus degree in my eyes, since this school is no longer in operation. Look forward to getting your help and insight on this issue.
A: Just because a school closes does not make the degree worthless and is not a reason in and of itself for student loan discharge.
If you can show, however, that the school violated state consumer protection laws, which usually means it misled students in program advertising, you may have a claim under the borrower defense to repayment discharge for your federal student loans.
Some examples of this would include if the school stated it had a 100-percent job placement rate but in reality had a much lower one. Another example would be if the school stated that completing a program means you are eligible for certification in a certain state and that wasn’t actually the case.
[Learn about three times college closings can affect student loan repayments.]
If you have private student loans, you may want to look into this lawsuit that other former ITT Tech students have filed.
Students who had been attending the school within 120 days of its closure and were unable to complete their degree or certificate are eligible for what’s called closed school discharge. However, because you completed your degree — and perhaps attended well before the closure — this is not an option for you.
Remember, obtaining a degree is less about what school you attend and more about the education you receive. You still have that education, despite the school’s closing.
More from U.S. News
New Homebuyer Programs Help Student Loan Borrowers
Tackle the Public Service Loan Forgiveness Form
Stay Informed to Make Wise Student Debt Choices
Take Ownership of Student Loan Debt Repayment originally appeared on usnews.com
