AG McDaniel Warns On Student Loan Debt Scams

Attorney General Dustin McDaniel is warning consumers of scams and frauds involving student loan debt.

“The federal government says student loan debt is the single largest form of consumer debt, aside from mortgages,” McDaniel said. “According to a recent report the average student will have amassed $29,000 in student loans before leaving college.”

McDaniel said the industry is “ripe for scams and fraud” and that many consumers have received mailers from an unnamed for-profit entity claiming that it can help consolidate or defer student loan debt.  In some instances, the group – which touts a toll-free phone number to call – says it may be able to obtain “total forgiveness” of the debt.

“Those mailed solicitations fail to mention that the services offered at a cost of hundreds of dollars are often available for free,” he said. “Further, the for-profit entities most likely could not do everything they promise, anyway.”

McDaniel said both the Arkansas Department of Higher Education and the Arkansas Student Loan Authority have received complaints about the solicitation in recent weeks.

The company seeks between $400 and $800 to provide their services.