Is Student Loan Consolidation A Scam?

Student loan experts provide advice and support on medical student loan debt and repayment.

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The students have not been hurt

Postby kingloo » Fri Jun 08, 2007 10:25 am

Simply put...

No matter what you say or the media says, all of the stuff that the government is accusing these companies of, has NOT hurt the students in the past. The students are who the government is saying is getting screwed over and that is not true. They will still get the same interest rates as they did before. If anything, it is the government that should be looked at because they SET the interest rates.
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Current Articles on lenders

Postby sandybakerevans » Fri Jun 08, 2007 10:27 am

LEGAL UPDATES:
Several lenders have come under legal review for corrupt practices including the following:
Student Loan Xpress - http://www.cnbc.com/id/18599262
Citibank - http://www.southcoasttoday.com/apps/pbc ... /705250346
Nelnet - http://qconline.com/archives/qco/display.php?id=333963
Sallie Mae- http://www.ft.com/cms/s/00f6592c-e8...0b5df10621.html

Consolidate with these lenders AT YOUR OWN RISK! For information about the illegal activities:

http://www.msnbc.msn.com/id/17644168/
http://www.wlwt.com/education/11811547/detail.html
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Who is hurt

Postby sandybakerevans » Fri Jun 08, 2007 10:42 am

There are actually two sides to this coin:

1. Students/parents may actually benefit from all of the lenders competing against each other because the benefits keep getting better - so that is a good thing!

2. Bad side - due to such a competitive environment lenders have set up alliances with schools and schools then promote those lenders regardless if they are in the best programs or not and then students (parents) trusting this school believe this is the only choice and that is what this mess is about. It all boils down to giving students (and parents) the opportunity to choose and making lenders fully disclose their programs and how they work.

This might be the one time you can not pin something on the government- if the Department of Ed is to blame for anything it is because there are no real penalities imposed against lenders or entities that are deliberately misleading thru the promotions, thru their mailings and the things their staff tell students.

Some of the settlements these lenders are paying - $2m in one case -is pocket change and well worth if for the number of loans they were able to get from those schools. Same goes with all of the other lenders referenced above - its all about money and they have no reason to stop unless consumers become aware of the tactics, ask the right questions and stop using programs and lenders that have been participating in questionable practices.
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Maybe a Question will be Easier

Postby kingloo » Mon Jun 11, 2007 9:33 am

You posted articles which say nothing about the students. Answer this for me...

Send me one article of one student that has been poorly affected by what these companies were doing? And, if a student took out a loan today compared to three months ago, is he getting a better deal/rate?
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Postby roselee_a » Sun Jul 01, 2007 8:13 am

I had a substantial amount in student loans from Loan Suggest, but upon graduation I could not find a job and another one was too low to even cover my expenses. 3 years ago, I had an opportunity to pay back some of the loans and contacted the servicing agent that was on my credit report, and settled out with hemar, the servicing agency. I paid out about $75k as part of the overall settlement. About a year ago, I got a threatening call from NYS Higher Education Servicing Agency, saying that I owed them $100k!
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