Student loans are a common form of debt in US. According to the Institute for College Access & Success, an average student graduates with a $26,000 debt from federal and private loans. This is a big problem for many students. The burden may become too much because you have to pay all the money while still trying to settle down.
An increase in fraud cases associated with student loans’ repayment
Due to the financial burdens that fresh graduates may face immediately after college, fraudsters have identified an opportunity to scam them. They know how hectic it can be to pay off a student loan. They also understand that people like to take the easy way out. Many of them will come to you at that desperate time and offer to help you with your student loan.
It usually starts with a simple call or email. They often offer to alleviate your student loan at a small fee. They are ingenious. They even produce information on how they have worked with other students to clear their loans to get you to trust them. Unfortunately, when you fall for this trick, they take your money and disappear.
Other cases of fraud include getting calls from them telling you that you owe thousands in student loans. If you don’t follow the case through you might end up paying something you don’t owe. This cases may include threats of arrests, lawsuits or even being given a bad credit score if you don’t pay the alleged student loan before a particular time.
How to know that you are about to be scammed
The company will ask you to pay an upfront fee. This is a major red flag to look out for. Legit loan payment programs don’t ask for money until the services have been delivered. Asking for an upfront fee for this service is illegal in many states. The service is usually free at StudentLoans.gov for all federal student loan borrowers. You can enroll in this program at any time for free.
The website does not have a .gov extension on its address. Scammers are brilliant, and they know how to trick you completely. They give their websites very official names that you cannot suspect. However, you should be careful even with some .gov sites. If you have any bad feeling always take the time to research about the organization. Ask for help from legit agencies like http://www.consumerfinance.gov/askcfpb/search/?selected_facets=category_exact:student-loans.
Unrealistic promises: A company may guarantee you that your debt will be taken care of immediately. When it sounds too good, think again. Ask yourself questions. How can they do that so fast or why are they so nice to you? They want to get your attention. The truth is nobody knows if you can be forgiven of your loan until they analyze your situation. Any company offering a guarantee is probably a fraud.
Pressuring you to pay: If the company comes to you with threats to get you to pay the loan that is a sign you are being scammed. If they keep rushing you to make a quick decision, it’s because they don’t want to give you time to think about it.
Additionally, never give out your personal information to anyone unless you are sure about their legitimacy. This includes your credit card information, your social security number and any other information that can be used against you in the wrong hands.
Don’t rush to make a quick decision or take the easy way out. Sometimes, people are misled by this scammers due to their desperate situation. Don’t be quick to answer them before you do a thorough research about them.
Just a reminder; don’t become a victim just because;
- a company claims to be related to the Department of Education,
- a company promises immediate forgiveness of your loan,
- a company offers to buy out your loan and settle it for a fee,
- a company tells you that your school was closed so your debt can be forgiven.
These are all signs of fraudulent companies.
If you still have questions about your student loan, kindly visit http://www.studentloanborrowerassistance.org/ to get more information on how to deal with your loan. Don’t forget to do a thorough research before you sign up for any loan repayment program.