@blacchyna / Via instagram.com
Blac Chyna is using her vast social media presence to promote a deceptive and wildly expensive student loan forgiveness scheme, telling her 10.6 million Instagram followers they can call a phone number to “get rid” of their student loans “before it's too late and Obama is out of office.”
It&039;ll take 5 minutes, she says. “Hurry!&033;&033; IT WORKS&033;”
It doesn&039;t. The Student Relief Center, the company in Chyna&039;s post, is one of hundreds of fly-by-night student loan operators that use social media to target borrowers. Via Facebook and Instagram, most promise to help students have their loans wiped away.
In reality, they charge hefty fees to do what anyone can do for free: sign up for the Education Department&039;s income-based repayment options, which fix student loan payments at a percentage of monthly earnings.
By charging hundreds or thousands of dollars for doing this, the student loan relief schemes extract money from people already struggling with debt. But they can be lucrative for the people promoting them — based on typical rates, Chyna could have been paid as much as $35,000 for her post promoting the scheme, according to Mike Heller, the president and CEO of Talent Resource, a celebrity lifestyle marketing company.
As Americans grapple with more than a trillion dollars of student debt, schemes targeting borrowers looking for a way out have become widespread. “Have you seen ads offering help with your federal student loans that seem too good to be true? They probably are,” reads a warning from the Secretary of Education about student debt relief scams.
The fees charged to former students by the company in Blac Chyna&039;s Instagram post — which was not marked as an ad — are astronomical, and carefully disguised. When BuzzFeed News called the Student Relief Center number yesterday, a representative said the company could arrange a “graduated payment plan,” where a borrower paying off a $20,000 loan would make two payments of $385, then pay $162.99 a month for 36 months, then begin paying $113 monthly.
But what they didn&039;t say, until further prodding, was that much of that money would go to the middleman, not loan repayments. Baked into the Student Relief Center&039;s plan were well over $2,200 in fees paid to the company, including a charge of $49.99 a month for 36 months, long after any paperwork had been filed with the government.
After the three-year time period, the representative said, the $49.99 monthly fees would become “optional” — though customers would be automatically enrolled in the payments.
Student debt forgiveness schemes like the Student Relief Center have come under increasingly harsh scrutiny in recent years. They charge sky-high fees, at times in violation of state law, for services that often involve little more than submitting free forms to the government. At worst, some companies charge hundreds and even thousands of dollars and then disappear without performing any services at all.
Representatives for Blac Chyna and the Student Relief Center did not respond to a request for comment from BuzzFeed News. The reality TV star&039;s initial Instagram ad was deleted on Wednesday; another ad was posted on Thursday afternoon.
Quelle: <a href="Blac Chyna Is Promoting A Shady Student Loan Ripoff On Instagram“>BuzzFeed
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