Posted: 11/21/2017

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Student loan debt is a financial burden for many. It is estimated that more than 42 million Americans owe nearly $1.3 trillion in student loans, the second largest class of consumer debt. Operators of Strategic Student Solutions, LLC and their related companies lured student loan borrowers into signing up for debt relief plans and duping them out of more than $11 million.

Here’s the catch:  Student loan debt is a financial burden for many. It is estimated that more than 42 million Americans owe nearly $1.3 trillion in student loans, the second largest class of consumer debt. Operators of Strategic Student Solutions, LLC and their related companies lured student loan borrowers into signing up for debt relief plans and duping them out of more than $11 million.

The scammers promised distressed borrowers they would reduce or eliminate their student loan debt and also offered credit repair services. Operators said they could enroll borrowers into loan forgiveness or payment reduction programs for an up-front fee and low monthly payments. In exchange for the promised debt relief and credit repair services, the student loan scammers charged illegal up-front fees of up to $1,200 and monthly payments typically of $49.99. They went so far as to tell clients that if they made their monthly payments for three years, their loans would be forgiven.

Borrowers were told not to correspond with or make payments to their loan servicer and if they received paperwork or bills from the loan servicer, they were to send them to the company to handle.

The company grossly failed to fulfill any of their promises. Borrowers received no loan forgiveness, lower payments, or any relief and several ended up owing more on their loans. Many consumers later found out that the company never contacted their loan servicers at all. In instances where they did contact the loan servicers, they only did so to place the borrower’s loans into forbearance, which is not the same as a loan forgiveness or income driven repayment plan.

When the borrowers tried to cancel with the company, operators oftentimes lied to them by telling them that if they cancelled, they may not be eligible for federal loan forgiveness in the future. Many times the company ignored or refused refund requests. In the end, borrowers were in far worse circumstances than when they signed up with the company.

Complaints filed against the company through Business Consumer Alliance allege dishonest and deceptive actions as well. One complainant believed they were associated with the Department of Labor. You can find out more information by checking out F-rated Strategic Student Solutions, LLC BCA Reputation Report.

In May 2017 the Federal Trade Commission shut the scam operation down and filed a complaint. In the complaint, the FTC alleges Owner Dave Green used corporate funds to pay for personal expenses such as jewelry, casino tabs, mortgage payments, luxury vehicles, clothing, and construction of a pool. All while the borrowers struggled with their loans.

Kim’s advice:  Beware of student loan debt relief companies that offer student loan forgiveness or relief services or claiming that loan forgiveness programs will end soon. Steer clear of anyone using high pressure tactics and trying to get you to sign up right away before you have a chance to check out the company making the offer, any associated fees, or their program.

Many of these companies make grandiose claims about what they can do for you. Never do business with a debt relief company that requires you to pay up-front or charges monthly fees for their assistance. In addition, look out for these signs of a student loan debt relief scam:

  • Promises of immediate and total loan forgiveness or cancellation.
  • Claim that they can negotiate a “special exclusive deal” for you regarding your loan.
  • Asks for your Federal Student Aid (FSA ID) or password.
  • Requires you to submit a third-party authorization form or a power of attorney.
  • Pressures you to sign an agreement before you have time to read it in its entirety and ask questions.

In truth there’s nothing a student loan debt relief company can do for you that you can’t do yourself for free. If you are struggling with student loan payments, contact your loan servicer or the Department of Education for help. They can help you lower or cap your monthly federal student loan payment, assist with consolidating your federal loans, check if you’re eligible for loan forgiveness or other programs, and get your loans out of default. These services are free and can not only save you money, but also can save you the pain of falling for a scam.

About Business Consumer Alliance

Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.

Tags: student loan, debt relief, scams

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