by John Darer CLU ChFC MSSC CEft RSP CLTC
Selling your structured settlement to pay off student loan debt could be a significant mistake.
Highpoint Funding of Boca Raton is suggesting selling your structured settlement to pay off student loan debt. Highpoint Funding states that selling your structured settlement is "what's next" for a graduate, even before you have a cold beer to celebrate. Highpoint Funding's Twitter feed and Facebook page pushed the bogus student loan advice on June 1, 2018.
Before you or a loved one gets hooked on the Highpoint Funding sucker play please consider this:
- Selling your structured settlement payments to Highpoint Funding, or any other settlement purchaser is a money loser 100% of the time.
- Following is an excerpt from a table of student loan rates for the last 4 academic years, produced by student loan expert Mark Kantrowitz
|
Academic Year |
Fixed |
Federal Stafford Loans |
Federal PLUS Loans |
||||
|
Undergraduate |
Graduate |
Direct |
FFEL |
||||
|
Subsidized |
Unsubsidized |
Subsidized |
Unsubsidized |
Parent & |
Parent & |
||
|
2017-2018 |
Fixed |
4.45% |
4.45% |
NA |
6% |
7% |
NA |
|
2016-2017 |
Fixed |
3.76% |
3.76% |
NA |
5.31% |
6.31% |
NA |
|
2015-2016 |
Fixed |
4.29% |
4.29% |
NA |
5.84% |
6.84% |
NA |
|
2014-2015 |
Fixed |
4.66% |
4.66% |
NA |
6.21% |
7.21% |
|
Given that the undergraduate student loan rates are below or about the 4% cost of money of a company like JG Wentworth, and given the facts that Highpoint Funding is a for profit business that must incur case costs and legal expenses, in excess of its cost of money, it is highly unlikely to impossible that following HIghpoint Funding's advice will result in a successful outcome.
Highpoint Funding's conduct underscores the dangers in taking advice from settlement purchasers whose representatives may be unlicensed and/or unqualified to provide such advice.
First Republic Bank offers an alternative solution, refinancing, with rates as low as 1.95%.
- One simple payment
- If you pay your loans within 4 years, First Republic advertises that it will give you back the interest paid against your loan, up to 2% on the original loan balance.
Highpoint Funding has previously engaged in predatory advertising with Openyourvault(dot)com, cited by famed trial lawyer Mike Papantonio in an episode of The Ring Of Fire, a syndicated show established in 2004 for the purpose of exposing Wall Street thugs, environmental criminality, corporate media failure, and political back stories that you will rarely find from any other source.