With American students owing more than a trillion dollars in student loans, you could well have predicted scammers to identify this as a great opportunity to scam students and former students already struggling to pay their student loans and you would be right.  Phony debt settlement companies that either charge you for information about debt assistance that is easily accessible for free or, even worse, who charge you for services that they don’t provide have become a major problem.  Earlier this week the Illinois Attorney General sued Broadsword Student Advantage and First American Tax Defense for charging customers for debt settlement services that they never provided.  First American Tax Defense is accused of fabricating totally non-existent government programs, such as the “Obama Forgiveness Program” that it said it would use to reduce student loans.  It also is accused of representing that it was affiliated with the U.S. Department of Education.  Some phony student loan relief agencies have been charging fees of as much as $1,600 to unwary students without providing anything in return.


The best place to go if you are having difficulty with a student loan is directly to the servicer of the loan.  You can also find helpful information at StudentLoanBorrowerAssistance.org which is a website maintained by the National Consumer Law Center.  The United States Department of Education also has a lot of helpful information about student loan consolidation and other things you can do to reduce your payments at https://studentaid.ed.gov/repay-loans/consolidation.  The Department of Education also has a toll-free number where you can get helpful loan information at 1-800-4-FEDAID.  One thing to remember is that no legitimate lender will charge you before providing a service.