Student Loan Debt Consolidation - It’s Free, That’s A Fact

February 15, 2017

Student Loan Debt Consolidation - It’s Free, That’s A Fact

Nashville, TN – February 15, 2017 – Have you seen online ads offering to help you have your student loans forgiven? Or maybe they offer to help you consolidate your loans for a small fee?  Existing student loan debt is well over a trillion dollars and many former students are looking for help managing their debt. One way to do that is by consolidating existing loans into a Direct Consolidation Loan, which results in a single monthly payment instead of multiple payments to multiple servicers.

Some student loan debt relief companies claim to offer assistance to students about consolidating their loans and learning if they qualify for a relief program.  However, many of these companies provide services of unclear value. Some of these companies even ask students to provide their Federal Student Aid (FSA) ID, which puts them at risk of identity theft. FSA IDs should not be shared with anyone.

According to the U.S. Department of Education, if you took out federal student loans to pay for college you never have to pay to get help managing your student loan debt, the Department of Education offers assistance for free. If you see an ad from a debt relief company offering to help you with your student loans for a fee, walk away. Some companies charge as much as $999 at start-up, or $39 a month over the life of the loan for their services.

The Consumer Financial Protection Bureau states paying a student loan relief company money to relieve debt is not the best choice because;

  • Enrollment in alternative repayment programs, like Income-Based Repayment (IBR), is available at no cost to federal student loan borrowers.
  • Debt relief companies do not have the ability to negotiate with your creditors in order to obtain a “special deal” under these federal student loan programs. Payment levels under IBR and other federal income-driven repayment plans are set by federal law.
  • Any claims by debt relief companies to the contrary may be misleading and potentially a violation of law.

The US Department of Education offers many tips to individuals with outstanding student loans to help them determine whether loan consolidation is right for them. From there, BBB offers some additional tips to consumers before seeking student loan consolidation assistance:

  • Be proactive. If you’re interested in consolidating your existing student loans, contact the Loan Consolidation Information Call Center at 1-800-557-7392 or login with your FSA ID at Remember, you don’t need the assistance of any company to consolidate your loans, but you do need to know if you’re eligible to proceed with consolidation.
  • Research companies and their complaint histories for free at Carefully review complaint details and also customer reviews people have submitted through BBB and on other websites.
  • Ask what service the loan consolidation company is providing. Some companies say they can offer “relief” for student loan holders. However, all they do – for a fee – is work with your loan servicer to secure a temporary deferment or forbearance. These options are something borrowers can seek for free and, if granted, only delay loan repayment for a specified time.

If borrowers feel they have been misled by a company offering assistance consolidating their student loans, they should file complaints at, their state Attorney General’s office and the Consumer Financial Protection Bureau ( 

For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2016, people turned to BBB more than 224 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at

There are over 100 local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Middle TN and Southern KY, which was founded in 1961 and serves 38 counties in Middle TN and 7 in Southern KY.