In Ep. 155 of the Mullooly Asset Show, Tom sheds some light on the potential scams out there with these student debt relief programs.  There are a few warning signs to look out for when researching some of these companies, and we spell it out for you in this episode!

Show Notes

‘Soaring Student Debt Opens Door to Relief Scams’ – The Wall Street Journal

Beware of Student Loan Scams – Transcript

Tom: Hey, do you know someone who is paying a student loan? You may want to stick around and watch this because we’ve been tipped off to a scam. Watch episode 155.

Welcome to the Mullooly Asset Show. I’m your host, Tom Mullooly, and this is episode number 155. Do you know Anthony Zwarkowski? Do you know Dawn Robinson? Do you know Dean Edelman? These are student loan heroes. They’re probably also phony identities online. There was an article in the Wall Street Journal today, August 26th, 2019, regarding student loan relief scams. It’s well worth your time to read this article that they put together.

So it turns out that the names I just mentioned, Anthony Zwarkowski … Sorry if I’m mispronouncing that, mister fake person … Dawn Robinson from New Hampshire … There’s only probably 17 of them … Dean Edelman, another made up name from Virginia … These identities with fake pictures show up on 26 different websites that offer these student loan relief scams. They claim to be happy, satisfied customers of different student debt relief companies.

How can they have their student loans worked out by 26 different companies? They all had individual student loans. That’s just not possible. This appears to be, appears to be a fraud. You need to know that some of the firms that operate in the student loan debt relief corner of the world may operate legally, but there’s nothing that they offer you that you can’t get for free by yourself online with about 14 minutes of looking. There’s nearly 90 billion, with a B, in student loans that are in default as of June of this year, but that’s small compared to the $1.4 trillion student loan market.

But listen to these terms that they talk about all the time on these debt relief scams, that you have to pay almost $1,200 in an upfront fee. That’s a huge red flag right there. And then you’ll have to pay $40 a month in some cases for nearly 20 years. So all of these firms or most of these firms have complaints up the wazoo and you can go to the FTC website to read about this and actually, the FTC warns about things to watch for.

The first is if they ask for any upfront payments scam. Just run away. Two, if they promise fast loan forgiveness, again, that’s not possible. It’s just not. So again, that’s a huge red flag. Number three, they pretend to have official endorsements from a government agency. Not bloody likely. Number four, they rush you into signing some documents, and five, worst of all, they want your student ID or they want you to sign some kind of power of attorney. That’s you’re giving up all of your rights. Basically, when you sign a power of attorney with these student loan debt relief scams, you’re giving away your identity and your ability to negotiate on your behalf.

That’s trouble. But yet, there’s a lot of people who have fallen into these scams. Be super, super careful with this. If you know someone that’s involved with the student debt relief programs, have them talk to two people. They should probably contact a lawyer. And secondly, they should probably be talking to a financial planner just to understand some basic math and kind of point them in the right direction. These are things that you can do on your own. You don’t have to pay these fees. There is nothing that the student debt relief places can do that you can’t do on your own.

That’s going to wrap up episode 155. Thanks for watching. Catch you next time.

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