I have written often about phony student loan debt relief companies and with good reason. More than forty-two million Americans have student loans with an outstanding balance of more than 1.4 trillion dollars so it is no surprise that scammers are focusing their attention on these students and former students through scams that falsely promise to provide debt relief. In 2019 I told you that the Federal Trade Commission sued Arete Financial Group alleging that Arete charged illegal upfront fees for their services. However, according to the FTC, Arete’s crimes did not end there. In its lawsuit, the FTC alleged that Arete would change their clients’ Federal Student Aid (FSA) login ID, password and contact information with their clients’ loan servicer which effectively eliminated contact between the borrowers and their loan servicers. This enabled Arete, according to the FTC, to place the borrower’s loans into temporary forbearance or deferment status without the borrower even being aware of this. Thus when the borrowers sent their payments to Arete that they were told would be credited toward their loans, the money actually was kept by Arete. Some of Arete’s clients saw their loans become delinquent and their income tax refunds garnished to pay for overdue loan payments. The victims of the scam also lost the money they paid to Arete that was intended to be applied toward their loans.
In 2020 I informed you that Arete and the FTC settled their case and as a part of the settlement would be paying funds to the FTC to distribute to the victims of the scam. Now after three years the FTC is sending 3.3 million dollars of checks to victims of Arete’s scam. For more information about this settlement, go to the first page of the Scamicide.com website and click on the tab in the middle of the page entitled “FTC Refunds.”
The old adage still is true. If it sounds too good to be true, it probably isn’t true. Many of these student loan debt relief scammers promise quick loan forgiveness, which is unrealistic. In addition, you should never pay any upfront fees for student loan debt relief assistance. Those fees are illegal and are a sure indication that you are being scammed. Also, remember my motto, “trust me, you can’t trust anyone.” Don’t trust scammers merely because they use names that sound like they are affiliated with the government. You also should never share your FSA ID with anyone.
For information you can trust about federal student loan repayment option, go to https://studentaid.ed.gov/sa/repay-loans . There you can learn about loan deferments, forbearance, repayment and loan forgiveness programs and there is never an application fee. If you owe private student loans, contact your loan servicer directly. You can also look into student loan refinancing rather than consolidating the loans. Refinancing student loans can result in a lower interest rate. For more information about student loans go to https://www.consumer.ftc.gov/articles/1028-student-loans Here is a link to a calculator that can help you determine whether you will save more by consolidating or refinancing student loans.https://www.makelemonade.co/calculators/student-loan-consolidation-refinancing-calculator/
Here also is a link to an FTC video that explains student loan scams and what you can do to protect yourself. https://www.youtube.com/watch?v=7TjSI4Q6ztQ
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