CNBC published an important article on firms who are making money off the student loan debt crisis.   Many debt settlement companies are taking advantage of distressed student loan borrowers who are having trouble paying back their student loans. 


Beware of Those Making Money off the Student Loan Debt Crisis

In CNBC’s article, they link to NerdWallet’s Student Loan Watch List, which offers an index of companies who are profiting from the student loan debt crisis.  If you feel like you have been dealing with a debt settlement company who has taken advantage of you, then report it to the Consumer Financial Protection Bureau and the Federal Trade Commission.  Also let NerdWallet know at  In my debt relief law firm, I regularly take on clients who have been the victims of scams from debt settlement companies.  I will go into the differences between a debt settlement company and a debt relief law firm further in a bit.


Once consumers can’t make their student loan payments, their student loan debt will be considered defaulted (for federal student loans this is 270 days).  Once a student loan is in default, that is when debt collectors will start being more aggressive with collection efforts and threaten to do things such as garnish your wages, intercept your tax refund or possibly even sue you (for private student loans) for not making your student loan payments.  Debt settlement companies know that you are vulnerable at this point, so they often take advantage of the consumer.


Warning Signs for Consumers in Default for Student Loan Debt

student loan debt crisis

Debt settlement companies often offer services for a fee that you can do yourself, such as getting you into a loan rehabilitation program.  Navigating through the loan rehab process can be confusing, so debt settlement companies know that you might be more likely to seek out the advice of a professional. They also often charge a fee for simple paper work to submit to the Department of Education, so that you can consolidate your loan or get you into an income-driven repayment plan.  Pretty much all the information a consumer needs to so this is available for free already on the Department of Education website. 


As Brianna McGurran, who specializes in student loans at NerdWallet says in the CNBC article, “Some of these firms are charging upfront fees, monthly retainers or a percentage of a borrower’s total balance to put them into programs borrowers can apply for on their own for free.”  Especially beware if a debt settlement company solicits you first, asks for money up front or they ask to grant you their power of attorney to make payments on your behalf


How is a Debt Relief Law Firm Different from a Debt Settlement Company?

I have a debt relief law firm that offers all kinds of debt relief help such as student loan debt relief, credit card debt settlement, credit repair, debt lawsuit defense and more.  As an attorney, I am prohibited from directly contacting potential clients that are having difficulties paying back their student loan debt.  Potential clients contact me, I offer them a free consultation to go over their student loan debt problems, and we map out a plan from there.  As an attorney, I am held to ethical standards under the law to act in the best interest of my clients.  Student loan debt relief companies aren’t held to those same legal standards. 


I do often have clients who come to me about matters that they can handle themselves, such as getting set up in a Federal student loan rehabilitation program.  I let my clients know in advance that there are steps they can take to handle the rehab themselves.  Many would rather rely on my experience and have peace of mind that I will take care of their student loan debt and act in their best interest.  And my fee is pretty small in comparison to how much money they save on their student loan debt once we get them into a loan program for federal student loans or a debt settlement for private student loans.


If you are in default, then you should definitely beware of those making money off the student loan debt crisis.  Be sure you have done your research before you sign on with a debt relief company. If you have any questions, we are happy to talk to you free of charge at 844-729-4866 or us at You can also schedule your FREE Consultation by clicking here. And be sure to check out my student loan debt relief success stories on my website to learn about people who are finding financial freedom after dealing with student loan debt.



Jonathan B. Haskett is a debt attorney serving clients in California and focuses exclusively in debt relief. He is licensed to practice in California. Mr. Haskett owns and operates The Debt Settlement Lawyer in San Diego, and helps people with debt problems all over the country, if possible. For more information, please contact attorney Jonathan Haskett at 844-729-4866, or  or use our online contact form.