Even the brightest students might be taken in by student loan scammers.
After all, there is no denying that decent college education in the United States is too costly. Students are frequently forced to take out enormous student debts, which rapidly become insurmountable financial burdens.
Then, unethical businesses add salt to the wound by concocting schemes that prey on distressed students. And if you believe you are immune to deception, think again. These businesses’ strategies can be incredibly persuasive!
It is critical to be able to distinguish between legal and fraudulent businesses so that your money may be better spent on possibilities such as studying abroad.
Check out the most student loan scams and tips listed below to protect yourself.
● Scam of the Upfront Fee
A debt reduction firm will entice you into this scam by proposing to negotiate lower interest rates or repayment arrangements on your student loans on your behalf. They may even suggest combining all of your debts so that you can make a single monthly payment. Doesn’t that sound nice? There is this one catch: you must pay a one-time charge.
While the corporation may keep its word, it may also take the money and flee. As a result, it is prohibited in the United States for a debt relief firm to collect a charge over the phone before providing the service.
You can do everything that a debt reduction firm can do for a charge for free. You can as well apply for an income-driven repayment plan if you have a federal loan. In the case of a private loan, contact your supplier to inquire about alternate repayment options.
● Scam of Disappearing Student Loans
In this scam, a private firm will take advantage of your desire to save money by promising to erase or reduce your student loan debt entirely. The only thing you have to do is pay a one-time charge.
So, how is this a swindle? Even if you declare bankruptcy, it is extremely difficult to discharge student loans. Be wary of any financial help organization that attempts to persuade you differently.
What can you do?
The only option to erase or reduce is through government debt forgiveness programs that require qualifying circumstances such as death, permanent incapacity, identity theft, or school closure. Check to see whether you are qualified for any of the programs and, if so, apply.
How to Avoid Scams with Student Loans
Nobody is immune to deception. Even the finest can be duped when grave circumstances are combined with strong emotions. However, being well-informed can significantly reduce your risk. Here are some warning signals to look out for if you want to avoid being a victim of a student assistance scam.
There are options such as contacting “Forget Student Loans” (FSL), where you can get very detailed information and get a deep insight of your case, and even directly get a free assessment. By using such a procedure, you will not miss a single point and be fraud-free.
Never pay a fee upfront.
You will never be required to pay anybody in order to obtain student loan debt reduction aid. All of the services offered by debt relief firms are ones that you may perform on your own. If you do want assistance, keep in mind that trustworthy firms should not require advance payment.
If you want to save your money on student loans, you may talk to your official loan servicer about things like payment collection and feasible repayment options.
Secure Personal Information
Identity theft becomes more likely when unwelcome persons have access to your information. When conveying information over the phone or the internet, you should always be cautious and vigilant. Before handing up your social security number or credit card information, get to know the individuals who have access to your data and check the reliability of your sources.
If you want to apply for federal student aid through official government websites, you may further safeguard yourself by manually erasing your browsing data and cookies once you’ve completed the applications.
Identity theft may occur at any moment, so keep track of the progress of your loan and financial assistance offers after filing your application for student financial aid. Review and follow them on a regular basis to quickly discover any suspicious behavior.
Finally, be wary of companies making false legal claims.
Some scams prey on the faith you intuitively place in business experts. Allowing law firms or debt reduction organizations to negotiate on your behalf, however, cannot guarantee lower student loan payments.
You need extra caution since these scams frequently use impressive emails filled with legal language to urge you to give them your money.