Student Loan Discharge For Special Circumstances
While student loan discharge isnt the same as forgiveness, it could leave you debt-free. In rare circumstances, borrowers can get their student loans completely canceled.
There are several situations when you could qualify for student loan discharge, including:
- Closed school
If you think you could qualify or want to learn more, speak with your loan servicer.
There Are Legitimate Ways To Get Student Loan Forgiveness And Loan Counseling
If you cant afford your student loan payments and need help, there are legitimate ways to reduce your payments or pursue loan forgiveness. Some potential options include:
- Signing up for an income-based repayment plan to reduce your payments
- Exploring forgiveness options with the help of your servicer
- Consolidating your federal student loans into a Direct Consolidation Loan to extend your repayment term up to 30 years
- Refinancing to possibly get a lower interest rate and reduce your overall costs or to extend your repayment term for a lower monthly payment
- Seeking student loan debt counseling through a trusted organization, such as the National Foundation for Credit Counseling
Remember:
Be sure to thoroughly research your options so you can make an informed decision on how to handle your student loans.
If you decide to refinance student loans, remember to shop around and compare as many lenders as you can. This way, you can find a loan that fits your needs. Credible makes this easy you can see your prequalified rates from multiple, reputable lenders in two minutes.
Just keep in mind that if you refinance federal student loans, youll lose access to federal benefits and protections. This includes access to income-driven repayment plans and student loan forgiveness programs.
Find out if refinancing is right for you
How To Get Help
Submit a complaint online or call us at 411-2372 if you have been the victim of a student loan debt relief scam or if you are getting runaround from your student loan servicer. You should also instruct your student loan servicer that they should only provide information about your student loan directly to you.
If you have questions about repaying student loans, check out Repay Student Debt to find out how you can tackle your debt even if youre in default. You can learn about your options, and what you might want to specifically ask for when speaking with the company attempting to collect from you. Another great resource to visit is Ask CFPB for answers on many more of your student loan questions.
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Student Loan Relief Red Flags
Now that you know some of the main types of student loan relief scams, what are some red flags to look for?
Based on talking to consumers for several years, these themes have emerged:
- Any company that claims to have a relationship with the Department of Education
- Any;company that promises you a set payment or forgiveness
- Any;promise of immediate loan forgiveness or cancellation
- Any;promise that a buyer will buy the loan and settle it for a set amount
- Any;promise that because your school closed or is being sued, you an get forgiveness
- Any telemarkerter that calls you and says a president’s name and “Student loan forgiveness program”
Is Supreme Advocates A Legit Company To Trust To Settle My Debt
Question:
Dear Steve,
I have recently hired a company called Supreme Advocates. My first payment doesnt come out till the 26th of this month but the thought came to my mind to research them some more.
I did see 3 bad reviews and a few good ones but b4 this scheduled payment go through, I want to be sure this company is legit.
Also, I have settled and paid 3 debts on my own so far and Im not even sure if I need then anymore.
The biggest debt wants 3 payments of 2000 and its for this only reason that Ive considered a debt settlement company; to make smaller payments on this particular account.
Is Supreme Advocates a legit company to trust with my debt settlements?
Answer:
Dear Q,
Im not quite sure what legit means to you. It might mean if they legally authorized to do business in your state, or if they get good settlements.
I have written about Supreme Advocates before. .
Do You Have a Question You’d Like Steve to Answer? .
If you are having some reservations you should absolutely talk to the company and get answers to address your concerns.
If youve already paid off three debts on your own then those should not be included in a settlement program.
So it sounds like you have one debt that is the biggest concern. Maybe Supreme Advocates has dealt with them before and knows the best settlement available. Or maybe they have a habit of going for the easiest settlement just to collect fees.
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Advance Child Tax Credit Scams
With the rollout of the Advance Child Tax Credit, stay vigilant and be aware of unsolicited communications asking for your personal or private information through mail, email, phone call, text, social media, or websites.
The IRS emphasized that the only way to get the Advance Child Tax Credit or Economic Impact Payments is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up tool, exclusively on IRS.gov. Any other option is a scam.
What to do:
- Remember that the IRS will never ask you for your personal information or threaten your benefits by phone call, email, text or social media. They also wont threaten you with jail or lawsuits, or demand tax payments on gift cards.
- If you receive an unsolicited email, text, or social media attempt that appears to be from the IRS or an organization associated with the IRS such as the Department of the Treasury Electronic Federal Tax Payment System notify the IRS at .
- If youre a victim of a COVID-19 scam, report it to the Department of Justices National Center for Disaster Fraud at 866-720-5721 or submit an online complaint
Forgiveness With Revised Pay As You Earn
Revised Pay As You Earn works much the same way as Pay As You Earn. Under this plan, your payments will be capped at 10% of your discretionary income. Undergraduate loans are forgiven after 20 years, while graduate school loans are forgiven after 25 years.
Unlike IBR and PAYE which require you to end up with a lower payment than on the standard plan, theres no such requirement for REPAYE; anyone with eligible loans can apply, even if they end up paying more with an income-based payment. As a result, you could end up with high monthly payments on REPAYE if you suddenly start making a lot more money.
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Warning Signs That A Student Loan Debt Relief Company May Be Trying To Rip You Off:
Pressure to pay high up-front fees. It can be a sign of a scam when a debt relief company requires you to pay a fee up-front or tries to make you sign a contract on the spot. These companies may even make you give your credit card number online or over the phone before they explain how theyll help you. Avoid companies that require payment before they actually do anything, especially if they try to get your credit card number or bank account information. Not only is free assistance available through your student loan servicer, many times taking payment for debt relief services before providing help is illegal.
Promises of immediate loan forgiveness or debt cancellation. Debt relief companies do not have the ability to negotiate with your creditors for a special deal under these federal student loan programs. Payment levels under income driven payment plans are set by federal law and, for most borrowers, loan forgiveness is only available through programs that require many years of qualifying payments.
Demands that you sign a third party authorization. You should be wary if a company asks you to sign a third party authorization or a power of attorney. These are written agreements giving them legal permission to talk directly to your student loan servicer and make decisions on your behalf. In some cases, they may even step in and ask you to pay them directly, promising to pay your servicer each month when your bill comes due.
Consumer Advisory: Student Loan Debt Relief Companies May Cost You Thousands Of Dollars And Drive You Further Into Debt
Today we took action to put an end to two student loan debt relief scams that illegally tricked borrowers into paying upfront fees for federal loan benefits. In a joint filing with Floridas Attorney General, we shut down student loan debt relief company College Education Services and, separately, we filed a lawsuit against Student Loan Processing.US for running illegal debt relief services. We allege that both companies exploited vulnerable student loan borrowers, made false promises about their debt relief services, and charged illegal upfront fees.
We are warning all student loan borrowers who have trouble managing their student debt to watch out for scams run by companies promising student debt relief. These companies prey on distressed borrowers who run into trouble and struggle to figure out what comes next. In some cases, borrowers do not think their student loan servicers can help them and seek help from a third party. Others are lured in by aggressive marketing practices that target the most vulnerable student loan borrowers.
Last year, we warned you that you dont have to pay someone to help with your student loan. You should also be aware of these warning signs to help you avoid student loan debt relief scams and information on getting help if you are a victim of this scam.
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Consolidating Your Private Loans
If you want to consolidate your private student loans, the only choice is a private lender. There might be a cost to consolidate your loans, but avoid companies that tell you to pay up front.
Make sure you understand all the conditions of your consolidated loan before you agree to consolidate especially if you have both private and federal student loans. Some debt relief companies and lenders offer to consolidate private and federal loans together. They offer one new loan to lower your monthly payments or interest rate. Dont do it.
Consolidating private and federal loans turns all your loans into a private loan. That means youll lose federal repayment benefits and protections, like deferment and forbearance, and will no longer have access to income-driven repayment plans and potential loan forgiveness programs.
Before you consolidate your loans, take your time. Find out what consolidating could mean for your specific situation. If you have private loans, talk to your lender. For federal loans, call the Department of Educations Loan Consolidation Information Center at 1-800-557-7394.
How To Get On The Do Not Call List
If you are receiving unwanted, unwarranted phone calls, consider putting your number on the National Do Not Call Registry, set up by the Federal Trade Commission . While this effort will stop telemarketing sales calls, you may still receive calls from scammers and robocallers, so continue to be cautious about which calls you take seriously.
If you have already received a spam call for what you think is a scam and don’t want a callback, donât just notify your app operator, also report the number to the FTCâs Complaint Assistant. You can use the Federal Communication Commissionâs online form.
Also, if you receive a robotext, you can copy the message and send it to your smartphone carrier at 7726 . This free service is available to AT&T, T-Mobile, Verizon, Sprint, and Bell customers. Many companies offer security products and information specific to their phones.
No company can legitimately promise immediate and complete student loan forgiveness or cancellation. A sign that the offer is a scam is if a caller claims that they can get rid of your loans in a short time. Most government forgiveness programs require many years of qualifying payments and/or employment in certain fields before loans are forgiven.
You also have rights under the Telephone Consumer Protection Act . Telemarketers, including those working for lenders and loan servicers, must ask for your permission before robocalling you, and include an opt-out or unsubscribe option during each robocall.
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Is There Any Company You Can Trust To Help You
Even though Ive said countless times you can do it for free at StudentAid.gov, there are still people whove asked me thats great Robert, but I still want to pay someone to help me who can I trust? Thats a fair question, so who can you trust?
Next, call your student loan servicing company. I know this sounds counter-intuitive, but 80% of issues and concerns can be resolved by simply calling your loan servicer. These free options are usually your best bet for help with student loans.
If you’re still not quite sure where to start or what to do, consider using talking to a financial planner that specializes in student loan debt. A real financial planner with have a CFP or similar designation, AND they will have a fiduciary duty to you. We recommend the Student Loan Planner. Check out our Student Loan Planner review here.
The Benefits Of Paying For Student Loan Consultations
Theres no magic wand to get rid of student loans quickly. Instead, youll need to think carefully through your options to find the best repayment strategy.
You can go at it alone for free through the Federal Student Aid website, the reality is that figuring out which repayment option is best for you is complicated. If you find yourself feeling over your head with your options, it might make sense for you to invest in one of our one-on-one student loan consultations.
Thats why Student Loan Planner® offers a paid service for advice related to your student loan debt repayment. We wouldnt have a business if the federal government could solve every borrowers debt problems. The reality is if you have six-figure student loan debt, your situation is very different from someone who has $20,000 in student loans.
We dont have the answers to wipe away your debt in one fell swoop. Nor do we claim to provide immediate loan forgiveness. Were also not a document preparation company. We purposely dont fill out any paperwork for clients. The more involved and educated you are in your own repayment decisions, the more focused youll be at eliminating your student loan debt the right way.
You can now better identify student loan forgiveness scams!
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Student Loan Debt Elimination Scam
Quick student debt elimination is a myth. So if you receive a phone call from a student loan debt relief company promising fast debt cancellation, youre likely dealing with a scam.
Scammers might make a claim that because you attended a certain college that closed you can get your debt completely wiped out at a cost. While there are times when this is possible, you should not pay a company to try to get your debt eliminated.
For instance, the federal government may permit student loan debt discharge for special circumstances, such as disability, death, and if your school closed.
According to the Federal Student Aid website, If youre no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
For more details on student loan discharge and which loans are eligible, check out the Department of Educations student loan forgiveness, cancellation or discharge criteria.
Here’s What To Do If You’ve Been Scammed
The first thing to know about being scammed is that it happens to everyone, and doesn’t mean anything about a person’s abilities. Tricksters and thieves are honing their skills and coming up with new tactics every day, so there’s no shame in clicking the wrong link or answering the wrong text. If someone has fallen victim, the next steps will depend on what, exactly, the losses look like.
“There is no risk minimization or recovery program that’s suitable for all circumstances,” says Velasquez. If a person’s SSN has been compromised, the first step is to freeze their credit so that no new lines of credit can be opened in that person’s name. If a scammer gets a person to create a new username and password, and that person has used the same password elsewhere, the next step is to change it on all other websites.;
It’s not likely that someone who has been scammed will recoup their funds, unless it’s possible to cancel a credit card charge or a bank transfer before it goes through. “If you paid them in Bitcoin, or a wire transfer, or a money order, or gift cards, the reality is you’re not going to be able to recover that money,” said Velasquez.;
Beyond these avenues of protection, it’s also possible to file a complaint with your state’s Attorney General as well as with the Consumer Finance Protection Bureau . While these avenues aren’t likely to take action on individual cases, the more complaints they receive, the more possible it is that they may shut down nefarious companies.;
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Help For Student Loan Relief Is Free
You may have seen Google or social media ads making outrageous claims of providing immediate relief from student loan debt. Generally, these private companies offer help with consolidating loans and other basic student loan services.
For federal student loans, most of these advertised services are things you can actually do for free. The Department of Education and your federal student loan servicer can help you with a variety of tasks, including:
- Consolidating your federal student loans
- Lowering your monthly student loan payments
- Applying for student loan forgiveness programs
- Getting your loans out of default
- Applying for forbearance or deferment
Although you can do many of these tasks yourself, some people arent aware of this or think its more difficult than it is. Forms can also seem confusing to fill out. With so many options to consider, some borrowers cant tell the difference between real student loan repayment strategies and scams.
