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New warnings about student loan scams - WCAX.COM Local Vermont News, Weather and Sports-

New warnings about student loan scams

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MONTPELIER, Vt. -

Are student loans weighing you down? You might want to be careful about offers to lighten your load.

Vermont officials are raising concerns over companies that promise to help student loan borrowers ease their financial burden. Experts say those services often charge hefty fees for unnecessary services that can cost you more in the long run and jeopardize your long-term credit history.

Vermont Attorney General Bill Sorrell, spoke at a news conference Friday with the president of the Vermont Student Assistance Corporation and Congressman Peter Welch, who said many of the companies are just scam artists.

Scott Giles of VSAC says you need to do your homework before working with a debt consolidation company.

"Even if you're not a VSAC customer, call us. We can help you determine whether this is a legitimate organization, but probably also help you figure out how to get the right repayment plan in place for your particular needs," Giles said.

You can also check the Vermont state website to determine if a company is licensed.

Giles says red flags for shady practices include requests for upfront payment or personal information like a Social Security number or password.

At the press conference, officials released a list of 15 companies. A manager at one of them, Mike Fernandez of the Miami-based Student Aid Center, agreed consumers can perform for themselves the services his company offers. But he said many prefer to rely on his company's expertise.

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