I know a lot of you out there don't have sympathy for student loan debtors who complain about their debt.
You see it as a matter of personal responsibility - they chose to sign a contract and so should suck it up and uphold their end of the deal.
Money Morning's Capital Wave Strategist Shah Gilani says it best, though:
"You're not wrong. But there are other forces exerting outside influence on the inner intentions of a lot of 'students' susceptible to being sold a bill of goods. Sometimes we're stupid for being conned, and sometimes the con is just so cleverly concealed."
Think of all the branding, marketing, and pressure swirling around the heads of these young folks.
And many don't have parents or educators taking the time to sit down and weigh the options with them.
They are being deceived into paying up to $1,600 in initial fees, and monthly fees as high as $50, to private "debt relief firms" for help that they could otherwise get for free.
It's a problem of transparency.
These firms claim to help a student loan debtor to reduce or manage their debts.
Some firms are clear about the services they provide and where any fees they charge are coming from.
But most firms aren't.
And most firms simply collect the information from their "clients" that is required on government application forms - the same government application forms that are readily available online and can be submitted for free.
The report concludes:
"At a minimum, it is deceptive that most of the companies fail to prominently disclose that 'their' programs are actually federal government programs that an individual can access on her own at no cost."
Moreover, some of these firms are utilizing unconscionable mandatory arbitration clauses that require borrowers to sign over a power of attorney, among other highly private information, in blatant violation of consumer protection laws.
One great way to cut down on these predatory debt relief schemes would be for the government to improve the administration of its own programs.
Student debtors don't realize what's available to them for free.
Or, even if they do, they can't navigate through all the red tape.
Have I convinced any of you to have a heart for our student loan debtors?
Please comment below and let us know what you think!
There might light at the end of the tunnel for some student loan debtors. Find out how one law student exposed the secret to wiping out student loan debt in bankruptcy.