Why Most Student Loan Debt Advice is Bad or Just Wrong

As a consumer debt expert it is exceedingly frustrating hearing from people all around the country on a daily basis who are seeking good help for their student loan troubles, only to get really bad advice, or worse, ripped off.

The scammers are ahead of the experts on selling student loan solutions. It’s not unusual at all for me hear from people who were charged $20,000-$37,000 for student loan help that’s available for free. I’ve got a couple of those client agreements sitting right here on my desk as I write this. Quite frankly the reason the scammers do this is because unaware consumers are easy pickings.

Even student loan servicers are giving horrible advice. Call me cynical but one reason might be the servicers and collectors earn more by not telling you how to reduce or eliminate your loans for free. In fairness, I have observed some employees at some loan servicers trying to give best advice.

To make the situation worse, people who you would think have a really good grasp on how to deal with student loans, like attorneys, don’t. Not yet at least. For most this is new training and skills they were never taught in law school.

One debt relief person just told me he tried to refer a consumer to an attorney for specific help and out of the 50 he tried to refer the consumer too, only three even had a clue what he was talking about.

“I’d love to tell you that most lawyers know how to deal with student loan problems but the reality is they don’t. It’s not that they are intentionally giving incorrect advice. The problem is they don’t know what they don’t know,” said Joshua Cohen, a lawyer who spends a great deal of time training attorneys on how to deal with student loans.

Another major contributor to the errant student loan advice given or sold to consumers by scammers is assumptions. People have heard for so long that there are no options or special relationships are required, that they believe that. My favorite line by scammers is, “We can help because we have special relationships at the Department of Education.” No they don’t. And besides, you don’t need one.

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People incorrectly believe they can’t discharge their student loans in bankruptcy. That’s not true because you can. While it might take specialized knowledge and some loans might be tough to discharge, others are simple and easy.

Maybe you were given private student loans for more than the published cost of attendance at your school or university. Did you know the amount of the loans above the published cost is dischargeable in bankruptcy right now because that part of the loan is not a “student loan” as defined in bankruptcy.

Maybe you filed bankruptcy but were told your loans were not dischargeable. It’s probably not to late to go back and fix that with a separate procedure.

If you need to find an attorney or someone who can deal with your loans for you, try here.

Both private and federal student loans can be dealt with in bankruptcy. Look at these real world examples here and here.

And let’s say you get your wages or Social Security benefits garnished because of a student loan debt, or you are getting your tax refunds intercepted. That’s not the end of the world either. In fact that’s often easy to stop or reduce based on your circumstances.

Even being sued by the Department of Justice is an opportunity to have to have your student loans reduced or eliminated. Read this.

I fully admit there is a problem out there when it comes to dealing with problem student loans but from my point of view the problem is not that there are not good options available right now. The problem is most people just don’t have a clue on what options are available to reduce or eliminate their unaffordable student loans so they fall for anything. And as crazy as this sounds, the reality is the higher the balances which are owed, the better the dollar reductions available.

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You don’t need to be disabled, have a health problem, or dead broke to be eligible for real and meaningful help. Although if you are, getting reductions or eliminations is much easier. You also don’t need to pay tens of thousands of dollars. You just need to be educated about what options are available.

Teachers, police officers, firefighters, military, education, public interest lawyers, and others are already eligible for a full and total federal student loan forgiveness for free if they just knew who and how to ask for it.

Government programs even exist to reduce your regular student loan payments way down based on your current income. This is yet another free solution available from the Department of Education.

Out of frustration or desperation I wrote this comprehensive free guide that will give you the information you need to begin to make smart and educated decisions and it shows you what programs are available.

Some might say I’m advocating just walking away from problem student loans. I’m not. What I am advocating is that legitimate help is already available for people who are buried in student loans, can’t make the payments, have loans sitting on deferment or forbearance and getting bigger, desperate for real help, or don’t have the ability to save for retirement. In a perfect world everyone would be able to repay their student loans without a problem. But then again we don’t live in a perfect world, do we?


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

2 thoughts on “Why Most Student Loan Debt Advice is Bad or Just Wrong”

  1. Steve, this post is a great resource for consumers dealing with student loan debt. FYI, I’ve recently seen a couple of 50% settlements offered by Sallie Mae on defaulted student loans. These were automatically offered, not “negotiated” per se, in that SM just sent out a letter with the offered terms, take it or leave it. Just wondering if you’ve been seeing similar examples cross your desk recently?

    • Absolutely. Sallie Mae is sending these out proactively and that’s why I’m telling everyone to open their Sallie Mae mail if they are in default.

      I’ve seen much less success in the typical call them up and offer a settlement approach.

      When the account meets the internal Sallie Mae criteria they desperately want to settle it. Till then they seem to care less.


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