Reality TV star Blac Chyna is in hot water after encouraging her social media followers to sign up and pay for expensive help with their federal student loans—a process that is already available to all borrowers for free from the federal government.
Angela Renee White, who is known as Blac Chyna in her reality TV appearances and social media, put up a post on Instagram encouraging her social media followers—all 10.8 million of them—to call a toll-free number and “get rid of” their student loans. “I need all my followers with over 10k [sic] in student debt to CALL…and qualify in less than 5 mins[sic],” read the post. It was accompanied by a photo calling the program “Obama’s Student Loan Forgiveness.”
The toll-free number links people to a company that charges an exorbitant fee of $495 for “payment relief” to lower the borrower’s monthly loan payments. The problem is, the federal government already has several options for borrowers who need to reduce their monthly repayments, such as the Income Driven Repayment Plan that allows payments based on a percentage of borrowers’ income, and those programs are all free.
Federal student loan repayment scams are everywhere lately; it’s no surprise, considering the high amount of unpaid debt that Americans are carrying and trying to pay for. It can be tempting to pay for a program that promises to ease the monthly financial burden, even if it requires a stiff payment up front. The Department of Education, however, wants borrowers to know that at no time, ever, do borrowers have to pay for help with their student loans.
“Don’t be fooled,” said Acting Secretary of Education John B. King Jr. in a recent YouTube video aimed at federal student loan borrowers. “You never have to pay for help managing your federal student loan debt.” There are always options available to help borrowers, and they’re always free. Some scams, King pointed out, even make claims that the free options available are their own programs—and then try to charge borrowers for access to them.
While these fraudulent companies claim that paying them that exorbitant “one-time” fee allows them to negotiate with the federal government on the borrower’s behalf, in reality the borrower can do that themselves directly, and without paying any fees. A press release from the Better Business Bureau warned that many of these scams invoke the federal government’s name, Congress, or even the President as ‘proof’ that they are legitimate. “They will claim they’ve helped numerous other people,” says the press release, “but don’t believe them.”
Blac Chyna isn’t the first celebrity—minor or otherwise—to use social media to endorse products and programs. One 2015 article showed a huge list of celebrities and their ads, ranging from slightly-subtle to outright sad. Using a celebrity endorsement can be a bad move, as some companies found out too late. In the case of federal student loan help, however, anything that charges the borrower money—with or without a celebrity endorsement—is a scam.