How to Spot 4 Types of Student Loan Forgiveness Scams
Not only are students worrying about their loans, but they are also now worried about being scammed. The FTC has taken action against the operator of a student loan debt scheme, along with the financers. Two recently filed lawsuits suggest that the defendants orchestrated debt relief schemes that were illegal.
The suits allege that victims were typically charged over 1k in fees and instructed toward multi-year, high-interest loans, as opposed to finding debt relief. The charges specify that the Defendant Equitable Acceptance Corporation and the Students Advocates Team acted improperly, telling victims that their student debt would be forgiven and reduced. Their deceit made people believe that fees they paid would go toward their student loans, but their money only went to the financing company.
Types of Student Loan Forgiveness Scams
Student Loan Forgiveness Program Being Discontinued
You might see this type of ad appear as a pop-up advertisement and assume that the ad’s transparency means it is legit. It isn’t. Instead, review legitimate companies that work with the Department of Education.
Eligible for Benefits Due to Recent Law Changes
This is an advertisement sent by phone, text, email, and appearing online. In reality, legal student debt help is available all year long. An individual scammer is not calling or messaging you due to law changes. They are making contact because they want your money!
Discharge Your Student Debt
If it sounds too good to be true, it probably is. The U.S. Department of Education has federal loan services that can help lower your monthly payments, consolidate your loans, review debt forgiveness options, and help with defaulted loans. However, they are not removing all debt.
Student Loan Flagged
This lender or company will claim that your student loan has been flagged for forgiveness. This is a ploy to get you to give them your information.
How to Spot Student Loan Forgiveness Scams
You are asked to refinance at a higher interest rate. This means the company is trying to make money off of your loan debt, not help you. If you’re asked to pay a fee upfront. This fee will not go toward the repayment of your loan and will be kept by the company.
The scammer promises your debt will be eliminated quickly. They are hoping you will be motivated by fear about your loan payment and agree to anything they offer you.
If the company is private but claims to work closely with the Department of Education. They may even incorporate seals and jargon, which appear “official.” If you want help from legitimate sources, go to the FSA’s “safe” list.
Some scammers want your personal information, which they will then use to access your accounts and steal your identity. This might include your FSA ID, social security number, date of birth, driver’s license number, social security number, or bank information.
Having your identity stolen is a nightmare for consumers. Keep your private information safe and away from scammers.
How to Take Action Against Student Loan Forgiveness Scams
Start your student loan inquiry at websites that end in .gov and only follow those links to research student loan programs. Do not trust unsolicited emails, calls, or pop-up ads. Never give out your FSA ID or other personal information. Also, contact the lender if a fraudulent account was opened on your behalf.
Review your credit report and dispute information that is not accurate. Also, contact lenders about fraudulent charges, add a security alert, or consider a credit freeze if your accounts have been compromised or your identity is stolen. If the scam happened online, contact the IC3 (Internet Crime Complaint Center). You can also file a local police report about the crime.
While it can be tempting to click on what appears to be a time-sensitive offer to alleviate your student debt, getting scammed will only make matters worse. Thoroughly investigate all programs before signing up. Search the information (email address, phone number, etc.) online at Social Catfish.
Being tricked online or by phone is easy as scammers have perfected the art of their cons. Companies that have an online presence may still scam you, similar to the case currently being pursued by the FTC. Scammers have phone call scripts and email content that will sound and look professional. They know what not to say and how to get you on board with their scam(s).
Social Catfish gives students and parents the tools to research the email address, phone number, by photo, username, and name of scammers to determine if you or your family member is being tricked. Don’t let student debt scammers win!