Don't be fooled by student debt relief scams

What $100,000 in student debt feels like
What $100,000 in student debt feels like

You've seen ads offering lower student loan monthly payments and even debt forgiveness. You're skeptical, but one small part of you hopes that maybe, just maybe, there is a way to get help paying off your student loans.

The ad might even call it the "Obama Student Loan Forgiveness Program."

Help paying off a student loan sounds great, but here's the problem: You can get the same student debt relief directly from your loan company -- for free.

There are hundreds of scams trying to make a buck off your desperation and hope, according to a survey released Tuesday by the advocacy group Student Debt Crisis and personal finance website NerdWallet.

Those surveyed named about 200 companies they had heard of that charge for some kind of student debt relief. Nearly half said the company contacted them directly, and 9% said they've actually paid for these services. On average, they were charged about $600.

Related: Is the government making money off your student loans?

Some companies try to appear sanctioned by the federal government. The "Student Loan Project" and the "SL Programs Student Loan and Debt Consolidation" websites were sent cease-and-desist letters by the Department of Education for using the agency's seal earlier this year.

About one-third of survey respondents said that the student debt relief companies they paid did help, despite charging them for the service that is available for free.

Often, the scams are simply passing off the federal government programs as their own and billing you for it. Some companies charge enrollment or subscription fees up to $600, or monthly account maintenance fees as high as $50 per month, according to the Department of Education.

Related: She paid off $100,00 in student debt

If you're struggling to pay your monthly student loan bill, here's what you should do.

1. Contact your student loan servicer.

This is the company that's collecting your money on behalf of the federal student loan program. You don't pick the company -- one company out of 10 is assigned to you by the DOE. Each has a different name. You can find the full list here. If you're eligible for the following services, your servicer will do it for free.

2. Ask if you can consolidate.

Loans from different years can have different interest rates. By consolidating, you'll get a new, single loan with an interest rate that's the average of your old ones. It probably wont' save you money, but it will make it easier to keep track of your payments. It can lower your monthly bill by giving you up to 30 years to repay your loans, but that means you might be paying more in interest in the long run.

3. Ask if you can lower your monthly payments.

If you are at risk of making a late payment, it might be worth signing up for an income-based repayment plan. If you're eligible, the plan will cap your payments at either 10% of your discretionary income and any outstanding balance left after 20 years of on-time payments will be forgiven. But remember, if you're stretching out your payments over a longer period of time, you'll end up paying more in interest. (The standard repayment plan is 10 years.)

4. Ask if you're eligible for loan forgiveness.

There are four reasons why the government would cancel your student loans.
1. Public service forgiveness: If you work for the government or a non-profit, any remaining debt you have after making 120 payments will be canceled.
2. Teacher forgiveness: If you teach at a school that serves low-income families for five years, you can get up to $17,500 canceled.
3. Closed school discharge: If your school closes while you're enrolled, you can apply to have any remaining debt canceled and get reimbursed for debt payments you may have already made. You can also seek loan cancellation if you can prove your school committed fraud by misrepresenting its services to you.
4. Disability: If you have become disabled, you won't have to pay back your federal student loans. The government also discharges your outstanding debt when you die.

5. Refinance with a private lender.

Although the federal government is offering student loans with a lower interest rate than in the past, it won't offer you the new rate on your old loans. But there are some private lenders that will refinance federal loans.

You're most likely to be eligible for a lower rate if you have a good credit score and are earning a high salary. But remember, if you make your federal loans private, you could be giving up some protections that the government offers, like the option to defer your payments if you return to school.

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