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Report: 131 Student Loan Reduction Companies Engaged in Questionable Practices

NerdWallet, a financial website that helps people understand their economic options, has identified 131 companies and owners who claim to reduce or eliminate student loans. Instead, these companies have been cited for fraudulent or questionable practices.

Officials at the website said they released their Watch List report to assist those who are seeking help to diminish their student debt. The list provides the names of companies that have been investigated, penalized or sued by federal or state authorities.

“Our main goal is to help shine a light on this process,” said Brianna McGurran, a student loan expert with NerdWallet.

McGurran said the list was created for borrowers to have a simpler way to navigate the process of student debt relief. She also said the Watch List will help debtors avoid costly mistakes.

NerdWallet combed through federal and state public and court records. Their team also contacted officials in all 50 states, including state attorneys general to compile the necessary information to create this resource for borrowers.

“The team has mined public records of hundreds of companies profiting from the student loans and the 44 million people shouldering $1.5 trillion in outstanding student loan debt,” said McGurran.

She noted other factors that can land a company on The Watch List include: owners failing to control debt, companies with substantial unpaid tax liens and companies that received a “D” or “F” rating from the Better Business Bureau.

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