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FedLoanHelp.org - Is this company scamming me?

Started by CoreyE, November 23, 2015, 02:14:49 pm

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CoreyE

I recently applied for a loan consolidation through the company FedLoanHelp.org. They claimed to be a non-profit organization that helps graduates pay off their college loans by reducing the amount owed on a monthly basis. The way it was explained to me, was they took my income, and if it fell below a certain level, then I would only be responsible for paying a portion of my loan amount, and the government would pay the rest each month. At my old company my monthly payments were $112.00 for 15 years. The new company claimed that my new payment would be $86 for 10 years. What concerns me, is they told me that it would take 6-8 weeks for the old loan to transfer over to the new loan. Once my paperwork was processed I was almost immediately charged $86 for the new loan, but my old loan was still active. I called them and asked about this, and their explanation was that their part of the loan was processed, but the other end was not. They told me to just go ahead and make one more payment of $112 to my old company, and by the next bill cycle everything should be rolled over. Well, the next bill cycle is here and I was charged another $86, and my old loan company says I'm 9 days past due on my $112 payment. I have messaged the company to see what was going on, and they told me that my loan should have rolled over weeks ago, and that they would call me once they found out what the deal is. That was almost 8 hours ago and no phone call. Please, has anyone out there used these people before?? Am I being scammed? They never asked for a fee of any kind so at first they seemed ok to me, but now I am concerned. 

TheCollegeInvestor

I would be concerned that it is a scam. You will never make payments to a "company" with Federal loans, always to a Federal Loan Servicer (listed here: https://thecollegeinvestor.com/9892/the-complete-list-of-federal-student-loan-servicers/)

If this company was charging you a fee to them, you didn't need to even use this company and pay it. Here's an article that explain this: https://thecollegeinvestor.com/16429/is-your-student-loan-repayment-company-a-scam/

Bottom line - you paid and didn't get what you were promised. That's a scam every time. Call your credit card and dispute it. Call the company and cancel. And call your lender to make sure everything get's back on track.

CoreyE

Ok, here's an update. After a looooooot of digging and finally getting the phone call I needed, I found out that this company is actually called FedLoan Servicing. I read your post earlier about how you feel they are the worst student loan agency out there, so it must be just the way they operate. They are so terrible, that it literally feels like a scam, but it's legit lol. Unfortunately I read your post AFTER I already signed with them. Pray for me haha

TheCollegeInvestor

Are you positive? Many "help" companies have similar names to FedLoan to prey on unsuspecting borrowers. I've seen Fedloan Student Services, Fedloan Servicing Aid, and many other similar companies that aren't the real FedLoan.

CoreyE

Now that I am enrolled, the website they referred me to is called http://myfedloan.org/. They have the same address as the company on your list of loan servicers. I also read your post about how you got out by selling your car and using the money from the sale to pay off your debt. I too have a paid for vehicle and your case about car loan debt and student debt is compelling. I may look into that option as well.

TheCollegeInvestor


Carrobm

Coreye, now hat it's been a few months I was hoping you could update me on this process. I just talked with them and they said they could knock my $226 payment down to $73. They didn't really need much information, i.e. Current loan info, in order to give me that quote. It seemed like all they needed to process this was personal info, nothing about the loan I have. Anyway if you could let me know how it's been going I'd appreciate it!

Thanks
Brett

TheCollegeInvestor

If this company was charging you a fee to them, you didn't need to even use this company and pay it. Here's an article that explain this: https://thecollegeinvestor.com/16429/is-your-student-loan-repayment-company-a-scam/

Tarheel73

based on my experiences with them I would definitely advocate staying away.
they seem to have a practice of autocharging "donations" and hoping customers just don't notice, and building in some really fishy stuff into their agreements. at the end of the day they seem like flimflam men and googling their owner's name brings up a history of lawsuits against him with previous businesses, for whatever that's worth.
at the end of the day they're just another one of those technically legal but definitely self-serving "non-profits" and they liked to lean on that with their pitch, as if I'm stupid enough to just throw my hands at the sound of a "non-profit" business like they're a wonderful charity.
The article above adds to this, I'd also add that really, the key is that they don't really seem to operate their business with integrity or forthrightness (something I count as very important when dealing with a business), which would make me iffy about giving them social security info, power of attorney, all the things they ask for, etc.