LegalZoom is, I thought, one of the good things about the internet: you can get information you need for a pretty good price. I’ve used it for a few legal forms, and the few bucks I spent represented savings over having to deal with a lawyer.
The student loan scam has indebted many people. Some were simply cheated, but quite a few were taken advantage of: they had no clue what they were signing up for. The end result is we have millions of people trying to deal with inescapable debt.
There are programs to help these poor souls, free programs sponsored by the Federal government whose irresponsibility got the poor suckers into these types of debts. Any sucker who fills out the forms can at least hope for some help.
LegalZoom to the rescue! For a mere $700, they’ll provide the forms and walk the victim through whole form filling-out process. While that might seem a little pricey, it gets even worse when one learns that the forms are free, and intended to be easy enough that you don’t need professional help to fill them out…even then, consultation is supposed to be free as well:
As the “good guys,” LegalZoom are still extracting large fees for work that, at least in theory, does not require professional help. The company charges $699, or 7 payments of $99.85, to consult on borrowers’ debt situations, then file paperwork on their behalf with the Education Department to enroll them in one of a variety of federal programs designed to lessen the burden of student loans.
The forms LegalZoom fills out are available online for free, and are intended to be filled out by students themselves. The consultation they provide is supposed to be offered, for free, by student loan servicing companies, who are paid by the Education Department to counsel borrowers on their repayment options.
Insult to injury is that our higher education system is so ridiculous right now that college-educated people are not only getting screwed by the student loan scam, they get screwed again by LegalZoom for charging $700 for documents already available for free online. We really should put signs outside of our universities, making it clear just how little that education is worth.
LegalZoom naturally presents itself as just a business, and I suppose so, but jeez, taking advantage of people like this seems a bit much:
Hartman, LegalZoom’s co-founder, said his employees are supposed to disclose to customers that they can complete the forms for free themselves, though in a 3-minute phone call with a reporter who asked questions about LegalZoom’s services, a representative never independently mentioned that fact.
What’s amazing here isn’t that we have some business taking advantage of the vulnerable (that happens every day, after all), it’s that a reporter actually made some effort to illustrate the fact.
I’ve written before of the media’s strange silence regarding the serious frauds of higher education. Granted, the reporter above only spent 3 minutes to reveal the shenanigans at LegalZoom, but…just imagine if reporters started enrolling in college, especially community colleges, and started documenting loud and clear just how ridiculous much of higher education is today. Yes, it would take more than 3 minutes, but still, this would be groundbreaking, assuming any paper would publish it.
Even being caught in the act, LegalZoom defends itself:
LegalZoom helps customers navigate a confusing and time-consuming process, Hartman said, doing the legwork for people who don’t understand the complexities of student debt, or who don’t have the time to invest in understanding it.
I’m inclined to see their point, even if I don’t like it: these people are so helpless and confused that they might well need better than the free counseling they could already get. Again, the problem remains: what does this say about our higher education system that it’s taking advantage of people that, by every measure, were not cognitively capable of understanding the student loan scam?
If that kind of guidance is needed, it’s not what the Education Department intended when developing college debt relief programs. Ted Mitchell, the United States undersecretary for higher education, told BuzzFeed News there should be “absolutely” no need for borrowers to pay outside fees to deal with the process.
“This is something student loan servicers are fully equipped to help with,” he said, adding that the forms borrowers use to enroll in income-based repayment programs, are “designed to be as easy as possible.”
Instead of (or better yet, in addition to) chastising LegalZoom, we should take a good look at the customers paying $700 for a free service. LegalZoom should post what schools put them into debt like this, so that people can see with their own eyes what schools are clearly, obviously, not acting with integrity.
Granted, government-provided services usually are pretty lame (one can use the government-provided service of a speed trap as a template…), but it just seems so wrong to hurt people coming and going like this, while the educational institutions responsible for the fraud get away for free.