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What You Need to Know About Paying Off Your Student Loans

Congratulations to the Class of 2015 college graduates! You are officially the most indebted graduating class ever. Yes, that's right...for all of your hard work, your parting gift is an average of more than $35,000 in student. That is nearly 65 BILLION dollars in student debt. And that is just the Bachelor's Degree level. Yikes!


With figures like that it is no wonder that one of the top priorities for virtually every young professional or budding family that comes into my office is how to manage five and six-figure student loan debt. While advisors and accountants, present company included, will preach that this is good debt, it is debt none-the-less. Good debt only means that it is better than bank loans, credit card debt and personal debt in that the interest rate is (generally) lower and the interest is deductible on your tax return. Hooray for small victories!


While these figures are scary enough, the truth is that there is a much scarier trend in this market right now. For every person who speaks to their financial advisor about their student debt, there are hundreds, if not thousands, who have been drawn into these student-debt schemes that pray on those who are desperate the lower their payment and get their loans behind them. There is just one problem...the services these companies offer is nothing more than a red herring, an opportunity for un-ethical hucksters, that once went after underwater mortgage holders, to find a new victim.


So how does the scheme starts with a phone call, email or web ad from Affordable Life Plans, Student Loan Forgiveness Plans, or any of the dozens of companies that hold themselves out as being able to offer you assistance in lowering your payment. They will undoubtedly tell you that they have ways to lower your payment to a level that better matches what you are able to afford. They will go on to tell you that President Obama has enacted loan forgiveness programs for "people just like you," who can get away without paying much of what they owe. And finally, they will tell you that for a small fee of $500, plus $29.99 per month, YOU, yes YOU, can take advantage of their expertise and knowledge. WOW...helpful and affordable? Sign me up!


Not so fast. Here is the problem. First and foremost, the income-based repayment plans are available through the Federal Government to anyone who qualifies. Just go to to find out if that includes you. Second, the Obama "loan forgiveness" is not available to everyone. It requires you to work in the non-profit or public sectors for a period of time. Private sector jobs, no matter how worthy, don't make the cut. There are also hours and years requirements so visit the afore-mentioned Federal Government site on student loans for assistance on your situation. Finally, the government programs only apply to federal loans, not private loans. Funny how this little fact doesn't seem to make it to the surface of conversations had by these scam-artists.


So then what are you paying for with these companies? No one knows, but it is sure not your own loan balance. Forbes recently tried calling 18 of the companies who hold themselves out as experts in this area. None of them would offer information about their process or what qualifications their counselors have. Plus, if you read these companies paperwork carefully (which most people who end up involved with these scams do not) it will say "results not guaranteed." That is because these companies are nothing more than paper-pushers. They might put your application in for you, but they may not tell you all of the details. They might suggest a program that does exist, but they won't tell you whether or not it actually makes sense for you. Many people end up in worse positions than when they started, and without being any closer to their loans being paid off.


So if the moral of the story is not to engage these companies, then what is there to do? Here are three simple solutions.


1. Know your personal details. This includes how much you owe, what your monthly payment is, and your interest rate. There may very well be an opportunity to refinance, but you will never figure it out if you don't keep track for yourself.


2. Investigate for yourself. Go to and put in some of your information, including your loan information, and the Federal Government will tell you what you are and are not eligible for.


3. Get Real Advice. Whether your financial advisor, accountant, or something like the National Consumer Law Center's Loan Borrower Assistance Project, there is legitimate advice to be had. Your advisor will be able to help you weigh federal options, investigate refinancing, and develop strategies for paying loans back in an orderly and affordable fashion.



There is no way to eliminate schemes. Throughout history you will find unethical companies trying to exploit people who are in a desperate situation. Make no mistake about it, in our economy's current state of salary stagnation, higher-than-ever college costs, and more and more graduates returning from college without a job, this is a desperate situation. But there are no short cuts. There are methods of assistance, but always remember that if someone offers you something that is too good to be true with regard to your student probably is.




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 Securities offered through American Portfolios Financial Services, Inc. Member FINRA/SIPC (FINRA/SIPC). American Portfolios Financial Services, Inc. and American Portfolios Advisors, Inc. are not affiliated with any other named business entities mentioned.

This communication is strictly intended for individuals residing in the state(s) of CA, CO, CT, FL, IL, KY, MA, MD, NJ, NY, PA and VA. No offers may be made or accepted from any resident outside the specific states referenced.

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