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Be Alert For Student Loan Forgiveness Scams

Be Alert for Student Loan Forgiveness Scams

FRAUD WATCH extra

Traditionally, this is the time of year when aspiring college graduates are eagerly planning their walk across the stage. Shortly thereafter, for most graduates, the student loan repayment process begins. Into the repayment issue also steps the scammers.

Watch out for companies promising to reduce debt by lowering payments through enrollment in student loan forgiveness or other programs. They may also falsely promise to apply monthly payments to consumers’ student loans and to improve credit scores—all you have to do is pay a small fee so they can negotiate with the lender on your behalf.

In another version, dishonest collectors claim they can save money by consolidating loans, as long as a minimal fee is paid. The BBB warns that you should keep all of your personal information private, and never give it to an unsolicited source.

Here are tips to protect yourself from scammers:

– Research the lender. Visit BBB.org to read business profiles and check out companies before working with them. The FTC has consumer education related to student loan debt relief scams at ftc.gov/StudentLoans.

– Report it. If you have been a victim of a suspected scam, report it tio local law enforcement as well as at BBB.org/ScamTracker.

– Empty promises lead to an empty wallet and more debt. Only scammers promise fast loan forgiveness. Scammers often pretend to be affiliated with the government. Never pay a fee upfront for help or share sensitive information such as your FSA ID or SSN.

– Find a reliable source. Consumers can directly apply for loan deferments, forbearance, repayment and forgiveness or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost.

For federal student loan repayment options, visit StudentAid.gov. Student loans can be forgiven only under specific circumstances, so contact your lender directly to see if any options are available to you.

If it seems too good to be true, it probably isn’t true. A company that claims it can erase student loan debt “in minutes” is not being honest.

Look for additional resources at BBB.org/coronavirus.

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