Student debt has reached an all-time high in the U. of late, with an estimated 40 million people now owing an average balance of ,000, according to credit report company Experian.With student loans soaring, debt-saddled students and graduates are desperate for any strategy that may help them escape their burden.You can have your federal student loans canceled for school-related reasons, such as your school closing, or in the event of disability or death. Department of Education will accept payment in the form of checks, money orders or credit or debit cards.
For instance, the Consumer Financial Protection Bureau has shuttered three companies that it labeled “scams.” The Federal Trade Commission has closed four companies that it says operated illegally.
Knowing the warning signs of a potentially harmful company can save consumers hundreds of dollars in unnecessary fees.
And it’s not inherently wrong for companies to charge for services you could do for free.
Some people compare student debt relief services with tax preparation.
Here are five red flags to look for and tips on what to do instead.
There’s nothing a debt relief company can do that you can’t do on your own.Most loans can be discharged in the following situations: "Circumstances beyond the borrower's control" do not include things like having to drop out of college before graduation or inability to find a job after graduation.However, there is a possibility that they could include a school using illegal recruiting tactics – for example, guaranteeing the student a well-paid career. Department of Education promised debt relief to students of the bankrupt for-profit Corinthian Colleges schools (click here for more information on how to apply).Under certain circumstances, federally backed student loans – such as Direct Subsidized Loans and Federal Perkins Loans – can be discharged or forgiven.The prospect of your student debt evaporating may seem like a dream come true.For many borrowers, this is the most practical option for getting out of default.