Thomas F. Miles, Attorney and Counselor at Law
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Unmanageable debt and student loan scams

The value of a college education is still considered to be one of the most important assets that a young person can gain. However, the cost of higher education has grown considerably over the years. In many cases, students graduate with unmanageable debt, and with little prospects for repayment in a timely manner. This can lead to a scenario in which California residents are targeted for student loan debt relief scams. It is important to be aware of the warning signs that a debt relief offer is simply too good to be true.

Perhaps one of the biggest red flags involves an offer that requires the consumer to create a power of attorney in order to take advantage of debt relief services. There is no legitimate reason why a consumer should be asked to complete a power of attorney when taking out a consolidation or other type of loan. Scammers will often tell consumers that this step is required so that the debt counselor can complete loan servicing applications on the borrower's behalf. They then charge a hefty fee to complete the paperwork, which the borrower could have easily completed on their own.

Another sign of a scam is when a debt relief agency goes to great lengths to convince borrowers that the loan servicing application process is lengthy and complex. In reality, completing the federal application is a very straightforward process, one that anyone with a college education can handle on their own. The entire process only takes between 20 and 30 minutes in most cases, and can be completed online.

For California consumers who are struggling with unmanageable debt, the promise of a quick solution can be hard to resist. Upon closer examination, however, many debt relief programs aimed at student loan servicing are easy to identify as scams. For those consumers who are burdened with multiple types of consumer debt in addition to student loans, filing for personal bankruptcy may offer the best path to financial freedom and the ability to repay student loan obligations.

Source:, 9 ways to spot -- and avoid -- a shady student loan 'debt relief' agency, Jan Miller, March 26, 2014

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Thomas F. Miles, Attorney and Counselor at Law
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