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, al… Read More
Astonishingly, right now there is over $1.5 trillion in student debt loan! With billions of dollars being loaned each year, these students are the perfect target for scammers who present themselves are student debt relief companies. They offer to resolve your student debt for an upfront fee resulting in these students paying for nothing and still having their student debt as well as the loss of the monies paid to these scammers. This is becoming more prevalent as the student debt is at an all-time high. Please read on to educate yourself on the types of scams being offered and how to protect yourself from becoming a victim of a student loan scam.
The good news is that there are plenty of legitimate programs available to help pay your student loans. The bad news is there are a lot of scammers waiting to take advantage of you. When looking for assistance with your student loan debt, make sure you are working with a legitimate company. Watch for these signs of a student loan scam.
Upfront payment required
One of the biggest signs of a student loan scam is the requirement for an upfront payment. You should not be asked to pay any fees upfront for student loan debt relief before any services have been performed. There are plenty of companies that don’t charge your for student loan debt assistance. If a company promises to settle your student debt loans for an upfront fee, stop right there and look for another company.
Promises of student loan forgiveness
Another common scam is the promise of student loan forgiveness through a private company. Examples are “ The Obama Student Loan Forgiveness” program and the Student Loan Relief Center . Neither of these are legitimate federal programs that result in student loan forgiveness. No company that offers loan forgiveness at a cost is legitimate.
Instant debt relief
When a company offers instant debt relief, run the other way. this is a scam that preys on your vulnerability to solve your problem as quickly as possible. The truth is that there is no easy relief situation. Student loan forgiveness programs that are legitimate have eligibility requirements you need to meet sometimes for 10 years. When you are in default, no company can immediately perform magic and make the debt disappear. There are programs such as student loan rehabilitation that can help you get back on your feet, but these programs take time and are not quick fix solutions.
Fees for federal student loan consolidation
If a company offers to consolidate your federal loans for a cost, again it is a scam and you will pay your money and get no results and still have your debt.
Private companies with “official” sounding names
The Consumer Financial Protection Bureau (CFPB) is involved with cracking down on student loan scams on companies that imply they are associated with the Department of Education. Due to the high student debt, this has become more and more prevalent and action is being taken against this companies by the CFPB.
Law firm lawsuit student loan scam
There are many variations of this type of scam. Basically, a law firm will claim to be able to settle your loan for thousands less than you owe. They will ask for you to make your loan payment to the law firm while they are negotiating a settlement with your lender. The end result is they don’t make your payments and you go into default on your loan creating more problems than you had to begin with.
How to Prevent falling for a student loan scam.
The bottom line, is a student loan scam is just like every other scam out there, if it sounds to good to be true, it is. Any program that asks for a fee and promises to remove your debt in the blink of an eye, is a scammer. You should know that debt relief companies do not have the ability to negotiate with Federal student loan creditors. There is nothing a student debt relief company can do for you that you can’t do for yourself for free when working with legitimate student relief services. You should go to StudentLoans.gov for legitimate assistance. If you feel that you are being scammed in your time of need, please contact Social Catfish for assistance.