Students tricked by debt relief scam

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ILLINOIS - Illinois Attorney General Lisa Madigan made her point clear Monday morning.  She doesn't want to see another student scammed.

"I am filing five new lawsuits against student loan debt relief scam artists," she said at a news conference in Chicago.

She says students are being tricked by fake debt settlement services.

"They tell people that they will be able to reduce their monthly payments," she said.  "They continue to tell people that their services are free.  Nothing is free about these scams.  What we see consistently is that there is a very large up front payment that is required.  

She says they can range from $600 to $1,200.

"For this money, here's what you get. Nothing that you can not have done for yourself for free, if you had merely reached out and availed yourself to the services that are available through the Department of Education."

I spoke with local financial aid adviser, Marcus Brown of Richland Community College.  He, too, says the Department of Education is the first place borrowers should go if they're struggling.

"That loan servicer works with them to figure out what the best option is for them, and they do that at no fee," said Brown.  "Obviously, if you're having problems, the worst thing you can do is charge another fee on top of that."

At Millikin University, Cheryl Howerton says that many graduating seniors forget to rely on trusted sources.

"Your trusted source is going to be your institution, their financial aid office.  Secondly, if these are federal loans, you should be looking for information coming from a ".Gov" site.

Madigan says the companies that she's suing are violating an Illinois law that prohibits up front fees for debt-relief services.
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