If you've got student loans, you feel the pressure of that financial obligation, but watch out. There are scammers looking to take advantage of your situation, offering student loan consolidation or elimination for a fee. Our guest today is Robert Farrington.
Robert is founder of The College Investor. He has been featured in many media outlets such as The New York Times, Washington Post, ABC and NBC News. As America's millennial money expert and America's student loan debt expert, he is on a mission to help people escape student loan debt and start building wealth for their future.
Show Notes:
- [0:54] - Robert founded The College Investor website when he was a college student. He shares his background as a blogger and his experience when a post about student loan debt went viral.
- [2:33] - College is a great investment for a lot of people, but like any investment, if you spend too much it might not be worth it.
- [3:01] - You don't go to college to learn because you find everything you need online for free. College is a signal to potential employers that you have a degree.
- [4:02] - Robert points out that trade schools and "dirty jobs" are a fantastic opportunity to make a lot of money without going to college but that many young adults don't know enough about them.
- [5:29] - There are three main types of schools: state school, non-profit, and for-profit. Robert gives examples of each kind.
- [6:39] - One type of student loan is federal student loans through the government with the requirement that you attend an accredited school.
- [7:23] - The other type of student loan is a private student loan that comes from a bank, credit card company, or other private lender. These are similar to a mortgage.
- [8:15] - Robert shares that there are so many student loan scams out there but they all have the same theme: to either lower the monthly payment or lower the total amount somehow.
- [9:32] - There are many programs that are legitimate and that will lower your monthly payment. The red flag is the fee that you pay. Robert explains how this works.
- [10:01] - The most popular loan forgiveness program that is fully legitimate is the Public Service Loan Forgiveness program that there is no fee for.
- [11:11] - There is loan consolidation which takes all your loans and puts them into one loan. Robert doesn't recommend this and explains why.
- [12:13] - If you call your lender and let them know that you can't pay, there is something they can do. It is a scam if you pay a third party and they can fill out your paperwork incorrectly.
- [13:26] - Robert describes another type of scammers that pose as a pseudo law firm that tells people to stop paying their loans and then go to court for them to represent you to get you lower payments. But this trashes your credit and doesn't get you ahead.
- [15:03] - Robert recommends to always start with caller your lender and talk to them about your options. Communicate your needs.
- [16:51] - There are also really great apps available that will help you manage your finances and Robert points out that there are valid and legitimate paid programs.
- [17:16] - The legitimate paid financial advisors won't do anything for you. They will give you a plan and you will need to take the steps to follow the plan.
- [19:39] - Robert admits that most loan service providers make errors and there are definitely problems. However, they manage loans for millions of people.
- [20:51] - All paperwork done on your behalf needs to be looked over. A lot of companies that have been shut down were because of falsified information.
- [21:38] - Robert explains how some scam companies will take your fees and not do any work at all. They'll send you email updates as if things are being done and then you default.
- [22:28] - Even if you are going to work with someone, you still need to log in to your loan provider account and check things every month. Ultimately, you are responsible.
- [24:09] - Congress wants government loan servicers to promote these programs but they never do.
- [26:01] - If you feel that you have been scammed, you need to lock down all of your information. Change all passwords and check all of your accounts to make sure your information has not been changed.
- [27:20] - No legitimate company will ever ask you for your password or log in on your behalf. It is a literal federal crime.
- [27:58] - Robert shares the most incredible dollar amounts that some scam companies have collected.
- [28:51] - Robert also explains that some people pay companies to do this work for them because they don't take the time to do the research.
- [30:01] - Student loans are challenging because it seems like there's no way out. People know that there's not a lot of options. Scammers are preying on.
- [32:36] - There are 100 Americans with over 100 million dollars in student loans. They got there because of graduate schools.
- [33:00] - There are two types of people who benefit the most from student loans. The first are low-income who plan to make between $30-$50k a year. The other one are the ones who borrow over $100k per year for graduate school.
- [35:34] - It always starts with getting organized. If you're feeling overwhelmed, get it organized and look at it all.
Thanks for joining us on Easy Prey. Be sure to subscribe to our podcast on iTunes and leave a nice review.
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