With college costs increasing and financial aid decreasing, students are having to take out loans to help pay for school. This has opened the door to fraudsters taking advantage of students who are not familiar with the loan process. Students are not only cheated out of their money, but their credit is ruined as well.
According to the warning, fraudsters pose as loan counseling services and advertise online and through telemarketing promising immediate debt relief, lowered payments, and debt forgiveness. They charge hundreds of dollars for services that students can get from the government and other approved loan servicers for free. Using high pressure sales pitches, these con artists promise to qualify students for loan forgiveness.
In one case fraud.org received, an Illinois teacher in a low-income district saw an ad on Facebook from a company promising loan forgiveness. He was assured that he qualified for loan forgiveness, so he signed up for the program. He gave the company his Social Security number and paid a fee of $650 and was told to stop paying off his student loans. His actual loan servicer called him a month later and asked why he wasn’t paying on his loan. That’s when he realized he had fallen victim to the scam.
Here are some tips from your BBB and fraud.org on how to avoid becoming a victim of student debt fraud:
- Never pay for student loan advice. The federal government has created several official websites such as studentloans.gov and studentaid.ed.gov to provide guidance for repaying student loans.
- Do not stop making payments on your loan and stay in contact with your loan servicer.
- Examine websites carefully that are claiming immediate debt relief, reduced payments, and debt forgiveness. Scammers may use the Department of Education seal or official sounding words like “national” or “federal.”
- Educate yourself on options for repaying your student loan. Take advantage of free loan counseling offered by your loan servicer.
- Be wary of “guarantees” of debt relief, especially if a scammer posing as a loan counselor promises immediate debt relief or forgiveness even before they know the particulars of your loans.
- Check out a loan company with bbb.org.
- If you suspect fraud, report it at bbb.org/scamtracker, ftc.gov, or fraud.org.
For more information you can trust, visit bbb.org/evansville.