Beware of student debt scams

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According to the Consumer Financial Protection Bureau (CFPB), approximately 40 million people have student loan debt totaling $1.2 trillion dollars. Many are struggling to pay this debt back. Consequently, scammers are taking advantage of the situation. Many of these borrowers, out of desperation, will pay up to $1,200 for services that are already provided for free by government agencies.

The Department of Education’s role is to assist potential borrowers on student loans as well as provide guidance on paying back the loans. They are not designed to provide consumer protection. The federal agency that is most responsible for helping student loan borrowers and oversees deceitful lenders is the CFPB.

Borrowers are encouraged to utilize the tools and services that CFPB has on their site. All the tools are there to assist in making the best decisions needed for all levels of the student loan process. No one needs to pay a fee. Too often borrowers are paying unnecessary high fees when dealing with student loans.

The CFPB, as well as the Michigan State Attorney General office, can assist borrowers if they believe they have been a victim of a student debt scam. At the CFPB site, there is a link specific to student loan complaints. The CFPB also has an ombudsman’s to assist with questions on student loan issues.

Michigan State University Extension offers financial management and home ownership education classes. For more information of classes in your area, visit MIMoneyHealth.org.

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