CONSUMER ALERT: Student Debt Relief Companies
The Cuomo Administration's newly formed Student Protection Unit is conducting an investigation into student debt relief companies.
Some student debt relief companies advertise that they can save you a large percentage of your monthly student loan payments. These companies generally obtain lower monthly payments not through their own programs, but by assisting borrowers in completing the paperwork required to consolidate their outstanding student loan debt into a single, new loan issued by the U.S. Department of Education and repay that loan under an income-based plan. These companies usually charge hundreds of dollars upfront for their services, when borrowers can access the same debt relief programs that the federal government offers free of charge.
You do NOT need to pay to enroll in the many borrower assistance programs that the federal government provides for free. These programs include loan consolidation, income-based repayment plans, and loan forgiveness. The government even provides options to borrowers who have already defaulted, such as loan rehabilitation.
To learn more about your student loan repayment options, you can contact your federal student loan servicer or visit the Federal Department of Education or the Consumer Financial Protection Bureau's interactive student loan repayment guide.
Any New Yorker who would like to file a complaint with the Cuomo Administration's Student Protection Unit about a student debt relief company or other potential abuses can contact the Department of Financial Services Consumer Hotline at (212) 480-6400 or (800) 342-3736 for assistance.