Advocacy Group Puts Spotlight on Debt Relief Companies

August 17, 2016

A higher education advocacy group is looking to bring attention to student debt relief companies marketing to borrowers services they could be getting free from the federal government.

Student Debt Crisis, a group that advocates on student loan issues through petitions and outreach efforts, says debt relief companies, while legal, often aggressively market services to borrowers that the federal government offers for free -- including help with loan forgiveness, consolidation and refinancing.

The Department of Education has warned borrowers to be wary of companies charging for help with student loans. And the Consumer Financial Protection Bureau has taken enforcement action, including barring student debt relief companies that it said misrepresented services and tricked customers into paying large up-front fees from working in the industry.

Student Debt Crisis has released the results of a survey conducted last month with NerdWallet of 6,363 student borrowers from the group’s 800,000-person email list. Among the findings in the survey, the report says that respondents with the highest amounts of student debt were better informed about options for managing their debt than those with smaller amounts of debt.

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