BOSTON, Mass. (WWLP) – Attorney General Maura Healey said some debt consolidation companies charge more than a thousand dollars to complete federal applications that students can fill out themselves online and for free.
Many parents and students are struggling to pay off their college loans long after graduation. Attorney General Maura Healey warns that some debt relief companies are charging illegal upfront fees for arranging lower monthly payments on student loans.
“If you are being marketed to by an entity that is suggesting they can help you with debt consolidation, debt relief – buyer beware. Don’t go there,” said Healey.
The Attorney General’s office said these programs are offered free of charge by the federal government. The AG’s since banned the companies Student Loan Processing and Direct Student Aid from doing business in Massachusetts. Amelia Manni and her mother Tina, like many families, took out more than $100,000 dollars in student loans. They paid thousands of dollars in down payments and fees to a debt consolidation company, only to have that money stolen from them.
“None of those payments were going toward my student loans and I just haven’t been paying them for the six months since I’ve graduated,” said Amelia Manni.
AG Healey was able to recover her money. As the price of a college education continues to go up, the Attorney General said they’re investigating other debt relief companies to make sure families don’t get duped.
Attorney General Maura Healey is setting up a new “Student Loan Assistance Unit” to help borrowers from defaulting on their loans.