Recently, I’ve been hearing from clients and prospective clients about a new twist to the old deceptive student debt relief game. Like all scams, there is always an element of truth, however small that element may be.
Before I carry on, click the following link if you’re looking for some help and advice with Navient settlement. Right, let’s carry on…
Borrowers are being told to call in for relief/forgiveness “due to the lawsuits against Navient” from some of these debt relief companies. While there are regulatory lawsuits against Navient currently and in the past, from the CFPB and various state attorney generals, and some class actions; very few if any have resulted in tangible refunds or results for any significant amount of borrowers. The student debt relief scammers then pivot into their same old pitch – charging upfront (illegally) for free programs.
I recently had the “pleasure” to speak with one of these companies (who never provided their actual company name of course) after I had some inquiries to my website asking if these offers were real or a scam. So, I created a fake phone number, used a fake name, made up a fake story – and turned the tables on the scammers. I do enjoy publicly exposing inferior “competition” from time to time.
Listen to the call here:
Scammer call #1:
So let’s break this call down step by step and expose the lies.
- First – an automated message says you have reached the “Dedicated line for settlement and forgiveness related to the Navient lawsuit”. They also mention “confirming eligibility” – something a private company can’t do. This is a part of a larger strategy of trying to make the company sound official without saying outright they are affiliated with the Dept. of Ed. or Navient. You’ll notice that the rep I spoke to goes on to directly contradict this recorded initial statement further along in the call.
- Next, the person I spoke with says that he is from the “Student loan advisory department” and that they “confirm eligibility” for different programs. More sleight of hand that obscures the true nature of whether they are a private company, and makes the caller think they are somehow official or have some kind of special connections. Only the Department of Education can actually confirm someone’s eligibility. Companies can only provide an educated guess (depending on the skill of the counselor or sales rep); the Dept. of Ed has the final say.
- Next, he says he is a “counselor”. Certified like me? Through an accredited organization? Probably not. Just a self given title.. (by the way, I’m an astronaut).
- I said I was calling about forgiveness from the Navient lawsuits. His response? “Ok, perfect”. Perfect for him – he thinks he has a gullible, uninformed prospect on the line and he’s already thinking about the commission he might get for closing the sale. I’ve done these types of calls before – I know how to act like I don’t know about student loans, pretend that I’m nervous, etc. Only later on in the call do I start to expose his lies and call them out on their nonsense.
- He then says there are two requirements to be approved – the balance must be more than $12k, and I must have income. Neither of these things are requirements for any federal loan program. But, I’m sure they are requirements for his company to accept clients.. they need borrowers to have income so they can slam them with upfront and ongoing fees.
- I mentioned that combined I have over $100k in student loans. I said this to get him more even more interested. His response? A surprised, “Oh, wow…”. (Note to debt relief professionals.. when someone says they have 6 figures in debt, never say “oh wow” – this does not exactly help to empathize with the borrower). I routinely run across six figure private loans all the time, and recently settled private loans as high as $256k and $317k. These types of settlements require different and more complex strategies. But it is not at all uncommon for me to run into loans over six figures on a regular basis. The highest debt amount I have heard of so far personally (in both federal and private combined) was over $700k. And I know for a fact that there are larger balances out there. Oh, wow.
- I then asked if the lawsuits were only for federal loans (they were mostly for federal practices, but included some private loan practices, such as difficulty in getting cosigner release – I already knew this when I asked). His response – “Correct… No. No I take that back. I’m not sure. I’m not sure about that”. At this point, I’m obviously super impressed with his base of student loan knowledge and ready to just hand over my credit card number.. Please just take my money.
- I then ask how his company gets money/relief back from the Navient loan lawsuits (what the initial automated message says directly). This is where he pivots to the usual student debt relief pitch and completely contradicts the actual statement that began the call. He mentions I would have to join a class action lawsuit to get money back from Navient lawsuits and they are not involved with this despite the initial message explicitly saying just that. He says that the class action is over “multiple states”. Fun fact: class action lawsuits are made up of individuals, not states. There are actual class action lawsuits against Navient though – as I mentioned before, every scam has an element of truth.
- In his next statements (I could tell he was going off script at this point and trying to say anything to close the deal) he says “Navient is kind of like a debt collector, and they profit off of getting the money back from your student loans when they buy them out”. Well… no. Navient is a loan originator for private loans, and a servicer for federal loans. Although they do have a collection department for their private loans. And the second part of his statement is completely false, I have no idea what he was even trying to say by that. Just another example of how these reps will say anything to hit your card with an illegal upfront fee.
- Next, here comes the pivot – they “help clients qualify for student loan forgiveness programs”. No – only the Dept. of Ed can qualify borrowers for forgiveness programs. Private companies are just making their best educated guess based on their level of knowledge (or lack thereof).
- I directly ask if the forgiveness is related to the lawsuits (the very first automated message). This is where I start to drop a little knowledge on my friendly student debt relief scam rep. He then says “No – that is incorrect” – about getting money back from the lawsuits (again, the very first line of the call!). A 180 degree reversal.
- He then says “We can get you forgiveness on your loans”. No you can’t – only the Dept. of Ed can. He says, “We can help you qualify”. No, only the Dept. of Ed officially qualifies borrowers for the free loan forgiveness programs like PSLF.
- I then ask what the program is called. It’s the “Loan Forgiveness Program but it’s different names”. Uh, what? No… there’s no program called that.
- I ask again if he can help me qualify for it, and he responds yes. An outright lie. He says “we calculate a monthly payment for you”. No.. that’s done with a free calculator on studentloans.gov – not a specific thing his company does. Maybe they have a similar calculator they made with a software programmer. But monthly payments are solely and finally calculated by the Dept. of Ed.
- I ask how much they charge – the answer for “enrollment and processing fees” is a certain amount split up over several months (this makes it sound like it’s less, rather than saying the total amount). “Enrollment and processing fees” is another deceptive term – there are no such fees for free federal loan programs. I then ask what do the monthly payments total up to? Their charge to “enroll” me in free programs that take 20 minutes for most people to apply for on studentloans.gov? $1,245. Oh, wow. And that doesn’t include the ongoing monthly fees – which are for the life of the loan.
- I ask again if this is payment for loan processing fees (which literally do not exist). The rep responds, “enrollment and processing fees, yes sir”. No, sir – another lie. I don’t understand how people go home and sleep well at night after literally spending all day lying to and deceiving borrowers. If the rep in this recording would like to record a public apology, I will gladly post it here.
- I then say, “I thought these programs were free to apply for”. Surprise! He didn’t seem to be expecting that, but he launched into the common student debt relief pitch that it’s similar to filing taxes and paying someone to do that (but my CPA charges $250 to prepare my taxes). It’s interesting that he did not disclose this until I brought it up, nor did he mention the free website (studentloans.gov) to apply. And the tax prep analogy isn’t accurate – tax documents are often much more complicated, they are done by licensed and audited advisors and CPA’s, and the basic federal student loan apps can be done for the most part within 20-30 minutes on studentloans.gov, through a relatively streamlined process.
- I then ask about ongoing fees (which have been highly targeted by regulatory agencies as the worst of the worst type of deceptive student debt relief practice). He mentions a “recertification fee” – also free to apply for, easily, on studentloans.gov (or by paper) – which he does not mention either. This is required once per year for all income related payment plans. He says that his company charges monthly for this. I ask why a monthly charge, if it’s only done once per year? He responds “that’s just the way our company does business”. Well, that’s a stupid way for your company to do business, in my opinion. I wonder if he knows that many student debt relief companies have been sued and shut down in large part because of that specific practice. Charging monthly for a free paper or online form that needs to be recertified once per year makes zero sense (but it makes those companies a lot of money, which is why they do it of course). It’s also a good way to get an FTC or state attorney general target on your company’s back – many companies have been sued and shut down because of this greed centered, deceptive practice.
After this, he seems to know that I am sort of calling him out on his practices and that I am not a closed deal, and offers to transfer me to a customer service department. The call quality becomes poor, and I end the call. But, I called again – stay tuned for the next post about these kind of scams.
A new pitch but the same old debt relief scam
So borrowers – beware of this new twist on an old scam pitch for private student loan forgiveness, and Sallie Mae and Navient loan forgiveness.
Yes, there are federal loan forgiveness programs that are free to apply for, rather easily, via studentloans.gov and paper application. You can hire a company to help you; but don’t hire one that lies, does not disclose their company name, or charges outrageous fees. There are some more complex federal loan situations, like wage garnishment, that these types of debt relief companies usually don’t handle (too much work for them; they want easy money). If you’re struggling with something like that, contact us – we can help.
For private loans, the only real type of Sallie Mae forgiveness (or for other private lenders) besides the recent regulatory lawsuits against Career Education Corp, is a negotiated settlement – which is an art and science in itself.
If you’re interested in hiring the top non-attorney private student loan negotiation expert in the world to settle your private loans, fill out my evaluation form here so we can analyze your situation and see if you are a good fit for our transparent, no upfront fee service – and don’t worry, I’m never “on a timer” for any of my phone calls.