Student loan document companies help students obtain educational loans and modify existing agreements so that borrowers can pay their loans off faster or reduce their monthly payments to make them more affordable. 

Unfortunately, banks consider these companies “high-risk” because many unscrupulous or inexperienced entrepreneurs don’t know their jobs as well as they should or are actively trying to defraud borrowers with simple services that the borrower actually does for the most part. 

Disappointed borrowers often cancel their credit card payments, which is why banks consider them high-risk operations.

If your business helps students prepare documents for lenders, you might have difficulty getting approved for a merchant account. 


Why the Burgeoning Student Documentation Industry Is Risky

Educational costs are rising to outrageous numbers, and even relatively well-to-do families can’t always afford the costs unless their students apply for a loan. reports that 44 million Americans are paying off student loans on $1.5 trillion of loan-related debt. [1] 

Those figures mean that one out of every four adults is paying off educational expenses. Students can’t default on these loans or declare bankruptcy.

The government will eventually attach their income and other assets. The average payment for a student loan has skyrocketed from $227 in 2005 to $393 in in 2016.

These issues create a strong demand for loan modification that attracts con artists and inexperienced but honest entrepreneurs. 

Document preparation for students has become a multi-billion industry, and the services attract loan-modification borrowers, loan-counseling customers and borrowers interested in debt consolidation.

These customers easily become disillusioned, which results in high chargeback rates.

Fortunately, Blue Wave Merchant Solutions offers full credit card processing services for many high-risk merchants.

You can also accept checks and ACH by phone. If necessary, you can schedule automated payments for ongoing services. 


Unhappy Customers Lead to Chargebacks

Customers who seek to modify their student loan payments are often disappointed with loan-modification services because there are practical limits because any plan must cover the monthly interest charges on what is often an overwhelming debt.

Unhappy customers result in chargebacks for service payments even when the merchant does everything as promised. 

Some of the most common types of loan-modification services include forbearance for a particular time period, interest rate reduction, loan consolidation service, scheduling larger payments to retire the loan faster and loan-period extensions.

Although there are more options for different types of loans, student loans are relatively strict because the government doesn’t allow defaulting on these loans or bankrupting them.

The interest rate also limits what merchants can do for their clients. 

Some of the big problems for loan-modification companies include dissatisfied customers and being left out of the dispute-resolution process.

Customer complaints and chargebacks are common, and the merchants often aren’t informed of the disputes until it’s too ;ate to address them. 


Have You Been Denied Credit Card Processing Services?

The loan-modification industry includes document preparation companies, loan consolidation companies, credit counselors and other companies that offer loan-related financial services.

Unfortunately, there have been many high-profile cases of fraud associated with some of these companies. That’s why they’re considered high-risk

Even legitimate companies receive many chargebacks because borrowers often have high and unrealistic expectations.

The ability to restructure a loan is limited, and it’s impossible to cancel student loan debt.

Unhappy clients often cancel their payments, and high chargeback rates over 2 percent can result in credit processors losing money. That’s why high-risk companies are denied merchant accounts

Banks are limited by an applicant’s credit score, business history and the type of business.

The underwriting rules of credit card processing companies automatically reject businesses in key industries such as adult entertainment, smoke shops, head shops, travel services and student loan modification services.

Many of these processors will reassure merchants that their accounts can be approved but reject them after collecting substantial application fees. 


Enjoy Full Credit Processing Services at Blue Wave Merchant Solutions

New merchants who work with student loan borrowers perform a valuable service.

Blue Wave Credit Solutions performs an equally valuable service by helping these merchants expand their businesses, provide better customer service and–for some business owners–expand their businesses with the new and valuable service of restructuring burdensome student loans. 

Blue Wave approves most credit processing applications–about 95 percent of the applications–within two days.

Your business can start processing credit cards in 72 hours.

Blue Wave provides a full suite of processing services including a payment gateway, chargeback insurance, a secure API and a program to reduce your chargeback rate using best business practices to provide exemplary customer service

Blue Wave can help companies like yours with credit card processing and the customer service issues that result in chargebacks.

For example, it’s important to explain your services and acknowledge the limitations of loan restructuring.

Loan-modification merchants face a difficult task to keep customers happy.

Transparency and prompt answers to questions can establish your business as legitimate company offering genuine services. 


Termination of Your Merchant Account

Even companies that had a merchant account that was cancelled for various reasons can still get credit card processing privileges with the right company.

Some of the reasons for cancellation include high chargeback rates, changes to the owner’s credit score and evidence of fraudulent or illegal activity 


It’s Easy to Get Started

Blue Wave can take your application online. You just need a few things to apply for a merchant account. These include: 


  • Proof that your business is legitimate and fully licensed
  • Information about your business and its products and services
  • Proof of your identity and your ownership of the business
  • Bank records
  • A working website to run the credit card processing technology

Blue Wave provides an API that connects with all the major eCommerce platforms and CRM software including Shopify, Magento, WooCommerce and others.

The application is SSL-secured and guarantees that your customers’ financial data are protected. 

Contact us at Blue Wave Merchant Solutions today to apply for a merchant account or to learn more about the challenges of processing payments for student loan documentation services. 


[1] Here’s how much the average student loan borrower owes when they graduate

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