LITTLE ROCK — Student loan debt can be overwhelming to some consumers already riddled with debt from mortgages and credit card bills.

LITTLE ROCK — Student loan debt can be overwhelming to some consumers already riddled with debt from mortgages and credit card bills.

The federal government says student loan debt is the single largest form of consumer debt, aside from mortgages. According to a recent report, the average student will have amassed $29,000 in student loans before leaving college.

That makes the industry ripe for scams and fraud. Some Arkansas consumers have received mailers from a for-profit entity claiming that the entity can help consolidate or defer student loan debt. Those mailed solicitations fail to mention that the services offered at a cost of hundreds of dollars are often available for free. Further, the for-profit entities most likely could not do everything they promise, anyway.

Attorney General Dustin McDaniel issued this consumer alert today to encourage consumers with outstanding student loan debt to do research and be aware of scams.

"Scammers will seek any opportunity to take advantage of someone, and we are increasingly seeing more examples of how that applies to student loans," McDaniel said. "It is best to remember that a borrower should never have to pay for the assistance they may need. Programs are available for those who need relief, and those programs can be accessed for free."

The mailer that some Arkansans have received states that consumers may receive "total forgiveness" of student loans or may have the opportunity to have lower monthly payments or lower interest rates. The solicitation advertises a "student loan consolidation and payment forgiveness program."

McDaniel said both the Arkansas Department of Higher Education and the Arkansas Student Loan Authority have received complaints about the solicitation in recent weeks.

The company seeks between $400 and $800 to provide their services. However, the company and other similar businesses fail to disclose that consumers can get similar help from government programs free of charge. McDaniel encouraged consumers to contact the U.S. Department of Education ( or the Arkansas Student Loan Authority ( for more information.

Last year, the National Consumer Law Center reported on an array of problems related to student loan debt relief services. In the report, the center said many companies mischaracterized federal government programs as their own. The center said that, at a minimum, companies did not prominently disclose their programs are actually federal government programs that can be accessed at no cost. Many companies also violated multiple state and federal consumer protection laws, the report found.

In addition, the center found that companies charge an initial rate of up to $1,600 in some cases, with ongoing service fees of up to $50 a month. Further, they offered a "one-size-fits-all" approach of loan consolidation, although that might not necessarily be best for some borrowers. They focused more on sales than on actually counseling consumers, and they discouraged borrowers from handling their own cases.

For more information about this or other consumer-related issues, contact the Attorney General’s Consumer Protection Division at 800-482-8982, or visit the division’s website,