Tell the Department of Education to work with the Consumer Financial Protection Bureau and crack down on private companies taking advantage of Student Loan Borrowers.
We demand that the Department of Education work with the Consumer Financial Protection Bureau to crack down on student debt relief companies. With student loan defaults and delinquencies on the rise, distressed borrowers are often looking for ways to get help with their student debt. As a result, student loan borrowers are being aggressively targeted by fraudulent student loan debt relief companies. Based on a recent Student Debt Crisis and NerdWallet survey, student loan borrowers are paying over $600 for services that are otherwise free of charge and guaranteed to federal student loan borrowers under federal law.
Therefore, we urge the Department to work in collaboration with the CFPB to issue Cease and Desist letters on a consistent basis, create policies that increase borrower awareness and education, protect borrowers from scams, and use their enforcement tools to shut down companies that are found guilty of misleading borrowers and violating federal law.
It is time for the federal government to reign in these private companies that take advantage of thousands of distressed student loan borrowers across the country. Companies that advertise student debt relief, forgiveness, and consolidation services that are completely FREE OF CHARGE need to be closely monitored and shutdown if found guilty of misrepresenting themselves or violating federal consumer protection laws. It has also been reported that private companies contracted by the Department of Education to service federal student loans often do a poor job of informing borrowers about their rights and options to help manage their student debt, leaving borrowers vulnerable to scams and deceit.
Student loan borrowers need to know that they do not have to pay for help with their federal student loans. Based on our recent Student Debt Crisis survey findings, NerdWallet has released this report.