Debt Relief Letters

These so-called debt relief companies typically try to take advantage of student loan borrowers lured by promises of student loan cancellation, forgiveness, credit repair, or dramatically lowered payments. But they charge fees for services that federal loan servicers offer for free.

To avoid getting taken advantage of by one of these companies, Iowa Lakes Community College recommends borrowers follow these simple precautions:

  1. Contact your student loan servicer with any questions regarding your loans. Your loan servicer is committed to helping our student loan customers achieve successful loan repayment. If you are having trouble managing your student loans, contact your servicer. They can help you review your repayment plan options, which may include income driven plans.
  2. Protect your personal information. Don’t share personal, financial or sensitive information about your federal student aid, such as your FSA ID.
  3. Don’t pay for what is available for free. There are no fees to enroll in Income-Based Repayment, Pay-As-You-Earn or other repayment options based on your income.

Here are a few signs to watch out for:

  • You are asked to pay high fees in advance;
  • Your request for a company name, mailing address, or phone number is refused;
  • You feel high pressure to decide immediately; or,
  • You are asked to sign paperwork giving the third-party company “Power of Attorney” or legal authority to negotiate on your behalf and you’re told not to contact your servicer after you complete the paperwork.

If you’ve already signed a contract, seek advice to learn about your options. You can file a complaint with the consumer protection division of your opens in a new windowState’s Attorney General. At the federal level, the opens in a new windowFederal Trade Commission has the authority to act against companies that engage in deceptive or unfair practices.