Rise in student loans makes room for debt relief schemes

The Consumer Financial Protection Bureau says to be carefu

Image: Thinkstock
Image: Thinkstock

CHICOPEE, Mass. (WWLP) – The rise in student loan debt has created room for more schemers to get money out of you.

Student loans can be an immense financial burden, and for someone who is struggling to make monthly payments, a company that offers lower payments or total loan forgiveness sounds like a good thing.

The Consumer Financial Protection Bureau says to be careful. They have seen an increase in the number of companies that charge large upfront fees that range from $600 to $1200 to get borrowers into government debt relief plans. Many of these programs you could sign up for on your own for free or they simply don’t exist.  For someone going into college it’s an added stress to worry about.

Brenna Gompper from Agawam told 22News, “Of course I worry about it, just because you know everyone kind of has that stigma like, you are going to college, you are going to come out with student debt until you’re fifty, so it is a little nerve racking knowing that you have to put so much money into college for you future.”

Consumer advocates say these debt relief companies are misleading making it look like they are close with the government.

Once in those companies plan, they will consolidate your loan, and have the same monthly payments, but often now with a hidden fee. Sometimes your money will not even make it to the lender.

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