The FRANK Roundup: Student Loan Scams, Congress on Debt Relief, and Parents Struggling to Save

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Here at FRANK, we like to stay on top of news and trends that affect students nationwide. Whether it’s sharing an article in a Slack channel or reading 50-page studies on financial aid, our team likes to stay in-the-know. 

Starting now, well be bringing you trending news and buzzworthy items that hit our desks weekly. Check out what we’ve been sharing this week!

Beware the student debt relief scams

Students drowning in crazy amounts of debt are vulnerable. Unfortunately, some companies are willing to take advantage of that vulnerability. A recent Wall Street Journal investigation sought to get to the bottom of a few of the biggest offenders out there right now. The top dog? A company called Financial Preparation Services.

Companies like FPS change their names, get new websites, and charge users upwards of $1k to help them get lower student loan payments. Only to turn around and submit false information to the government on their behalf. And big surprise, they leave most people worse off than they were before.

When it comes to your financial wellbeing, make sure the people you’re dealing with are trustworthy. Do your research and read reviews. More importantly, keep in mind that you can do the exact same thing any company proposes to you for free. All you have to do is get on the phone with your loan provider and negotiate.

Is Congress’ proposed plan for student debt good enough?

Sen. John Thune and Sen. Mark Warner believe they’re on the right track, at least. The Senators wrote an article for Time Magazine this week outlining their proposed expansion to the Employer Participation Repayment Act. It’s an expansion on a benefit already in place that allows employers to contribute up to $5,250 each year tax-free to employees that are currently in school.

The expanded benefit would allow them to do the same for employees that are no longer in school. Essentially, this would give employers a tax-free opportunity to help their employees pay down their debt faster. 

While this is an obvious benefit for the employees, it helps employers attract and retain their talent as well.

The question is, while it’s a step in the right direction, is it really enough to help with the mounting student debt crisis America is facing? 

Parents are finding it harder and harder to save for college

The rising cost of a college education obviously has an effect on parents that want to contribute to their children’s tuition. A recent study gives us a look at the bigger picture of what they’re dealing with. The report by Student Loan Hero says that 8 in 10 parents found that saving for their child’s education was harder than they expected. 

This frustration with not being able to save enough or realizing that tuition is much higher than they expected is a growing trend. Here are a few more surprising finds form the Student Loan Hero survey:

  • 43% of parents feel guilty they didn’t save enough
  • 36% of parents are paying their own student debt while saving for their children’s
  • 57% of parents help their children pay off their student debt
  • 39% believe saving for their child’s education is more important than retirement

The article sheds light on the fact that student debt doesn’t just affect the child that’s heading off to college, it comes down on the entire family. 

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