Question:
Dear Steve,
I’m a believer that if it seems too good to be true, it’s usually not true. But because I am a co-signer to a large student loan, I thought I would run this letter past you. It seems like a scam, but I’d like a second opinion. I’ve attached the letter.
Is the attached letter a scam?
Marie
The Letter Marie Attached
“I’ve tried to reach you by telephone but have been unsuccessful. I wanted to share with you our program that will reduce your Private Student Loan balance by 65% and you will never pay interest again. We understand many hard working Americans are facing a serious challenge trying to pay their Private Student Loans, which can hold them back from getting ahead in life. With our Debt Validation Program, there is no qualifying and no credit check required. We can help if you’re current on your payments, in default or in collections. Finally there is a real answer to the Private Student Loan crisis.
With our Debt Validation Program, see some examples below on how much we can save you in hard cost, depending on what debt load you have now:
*** If you are $25,000 in debt, you pay only $8,750. That’s a savings of $16,250.
*** If you are $40,000 in debt, you pay only $14,000. That’s a savings of $26,000.
*** If you are $65,000 in debt, you pay only $22,750. That’s a savings of $42,250.
*** If you are $80,000 in debt, you pay only $28,000. That’s a savings of $52,000.
There are no upfront fees or other charges. Our program also includes full credit repair. You will be debt free in 12 to 48 months depending on the payment plan you choose. There is no out of pocket cost to get started and it is completely Interest Free.
We can also assist you with any Credit Card, Medical and Personal debt you may have.
Thanks to our success rate with this program, we offer a 100% money back guarantee. You can visit our website at, www.ushardship.com. I have also attached a couple of quick overviews of the process for you to look over. Please feel free to call me or email me with any questions you may have or to receive your free consultation. Thank you and I look forward to assisting you.
Best Regards,
Cliff [ ]
Senior Financial Solutions Consultant
U.S. Hardship Group
(201) 244-6872 (Direct Line)
[ ]@ushardship.com
http://www.ushardship.com”
Answer:
Dear Marie,
I never really know how to answer the “are they a scam” question since I don’t know what people think is or is not a scam.
As a general rule I recommend that anyone considering using such a company should read the following free guides. That way you can come to your own conclusion.
- The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
- How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off
Since you are a co-signer you should be aware the role of the co-signer is someone for the creditor to go after if the borrower does not pay. As it stands now, they could go after one or both of you if the debt becomes delinquent. Any action will impact the credit reports of both parties.
It is entirely possible that if the student loan was sold and resold to new debt buyers that the proof to show the debt is valid, may have been lost or misplaced. But if this is being held by the original company, it is highly unlikely there is an absence of information to prove the debt is valid.
I’m not familair with the complete approach U.S. Hardship Group says it is offering. I can only see what they say on their website.
If you decide to explore this option with them then you might want to get some specific information about their success rates of previous customers who have had the same student loan owner and accounts with co-signers. It’s only logical to ask about their track record with others in a similar situation so you can place the claims in context to your situation.
If they say you will need to go delinquent on the student loans so they can negotiate a settlement, that is a strategy at time depending on who the student loan owner is. This would be a strategic default approach and is one that might be appropriate if you are already behind or simply can’t make any more payments.
If you are not behind on payments and do fall behind, this will probably be reported on your credit report, as the co-signer. You could be sued for the delinquent debt, a default may accelerate the balance and make it due at once, and you could always lose and face a wage garnishment.
Falling behind on the debt can also grow the balance from collection penalties and fees.
As the U.S. Hardship Group website says, “If you do nothing and default on a student loan, the lender can seek to obtain a court judgment in order to garnish wages, place a bank levy, or a lien on your personal property.” – Source
It might be important to also understand if the person who is giving you information is a salesperson who is just trying to close the deal or someone who is a counselor or student loan debt expert who is aware of all of the issues surrounding the private student loan issues.
For example, were the private student loans used for unqualified educational expenses or at a non-Title IV school? If so, some or all of the student loans may be eligible for forgiveness in bankruptcy. See this article.
So as you can see, there is more to this than just a blanket claim or a magic wand that all private student loans can be dealt with in the same way.
At the very least here, there are a lot more questions you should ask to understand if their pitched program is right for you.

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