When we released our “Finding a Way Out” report five years ago, we were extremely concerned about the lack of reliable and affordable resources for financially distressed student loan borrowers. Unfortunately, the situation has not improved despite the increased numbers of borrowers in trouble.
To compound the problem, the for-profit “student assistance” industry keeps getting bigger and more insidious. These for-profit companies claim to provide student loan counseling or specific loan services such as consolidation. Many have names that appear to be neutral or even non-profit. Despite the consumer friendly labels, many companies are not offering comprehensive counseling, but are selling specific products such as loan consolidations and are charging exorbitant fees.
Some claim on their web sites that borrowers should consolidate student loan debt in order to get out of default. They do not discuss any other options. In fact, consolidation is not a good option for everyone and may not even be available to all borrowers.