Recently, there are a number of people who became victims of student loan forgiveness scams. If you have never been scammed regarding student loan forgiveness, it is better for you to know the list of signs of student loan forgiveness scams below and also what to do if you have scammed.
A List of Several Signs of Student Loan Forgiveness Scams
According to the Credible site, here are 6 warning signs of student loan scams.
- They promise immediate student loan relief.
Usually, a scammer ensures that you will get immediate student loan relief through loan forgiveness programs as long as you pay them a fee to be eligible. Actually, there are federal student loan forgiveness programs available, but there is no program which provides immediate relief. Usually, you must spend years working in a particular field and making payments before you are able to be eligible. Public Service Loan Forgiveness requires you to work for 10 years at a nonprofit organization or government agency while making qualifying payments before you are able to apply to have your loans discharged. However, there is no private student loan forgiveness. Nevertheless, there are other relief options such as forbearance or deferment or student loan refinancing.
- They want you to pay money upfront.
Several companies will offer you help to be able to file for loan forgiveness, consolidate your loans, lower your interest rates or find scholarships and grants for a fee. However, in some cases, the businesses will demand that you pay them a fee upfront. You need to note that it is illegal for companies to charge you before they help you. So, you can consider that it is a major red flag. Let’s say that you pay an upfront fee. If so, you may not get any help at all and you may lose your money. If you want to apply for forgiveness programs or loan consolidation, you are able to do that on your own and you do not have to pay a company to do it for you.
- They ask for your SSN or other sensitive information.
If you are asked for your SSN, Federal Student Aid (FSA) ID or other sensitive information over the phone or via email, and they claim that they need it to help you, don’t believe it. It is because they may be scammers and they are able to use it to steal your identity and open credit accounts in your name. It is important for you to know that legitimate agencies and loan servicers will never ask for your information through email or over the phone.
- They claim that they are affiliated with a government agency.
Scammers will try to appear legitimate. So, some companies will use the logos from the U.S. Department of Education or Treasury Department. They may say that they have partnered with the Department of Education to offer these services. However, the claims are not true. The Department of Education does not partner with or authorize any organization to overcome federal student loans outside of your current loan servicer. There are some tips if you want to check whether the company that contacted you is a scam or not, you can access their site. When you check their website, you have to look at the address of the web and you have to make sure that it ends in “.gov” to see that it is truly affiliated with the federal government. You also need to check the spelling or grammar mistakes because it can indicate that the site is fake. If there is a phone number there, you can plug into a search engine to check whether it belongs to a legitimate government office or to a scammer.
- They use high-pressure sales tactics.
Usually, scammers know that the longer you take to make a decision, the more time you can research whether their services are legitimate. So, scammers usually will pressure you to make a fast decision and make payment immediately. They may say that you are able to reduce your interest rates or monthly payments for a limited time.
- They want you to sign a form giving them power of attorney.
You may be asked by them to sign a third-party authorization form or power of attorney. If you do it, you are signing a written agreement that authorizes them to talk to your federal loan servicer and make a decision on your behalf. If they have these forms, they are able to change your student loan account information which means that you will not realize that they are misusing your account. It is important for you to know that a reputable company will never ask you to sign this kind of form.
The Things That You Can Do If You Have Been a Victim of a Student Loan Forgiveness Scam
According to the Credible site, here are the things that you are able to do if you have been a victim of a student loan forgiveness scam.
- You need to contact your servicer as soon as possible. You can do that if you think your information has been compromised. So, your servicer will be able to help you revoke any third party authorizations.
- You have to contact your bank or credit card company. They are able to place fraud alerts on your account to be able to stop scammers from making transactions. You may also be able to get a refund for the fees that you paid.
- You are able to file a report with the appropriate agencies. Filing a complaint with the FTC, CFPB and your State Attorney General is important. When fraudulent activity is reported to the FTC, you will be given a list of steps to protect your identity.
- Monitoring your credit report can be done by you. You can freeze your credit report with the three major credit bureaus such as Experian, Equifax and TransUnion. So, it can prevent scammers from opening accounts in your name. You have to keep an eye on your credit report to make sure that nothing slips through the cracks.
- You have to change your passwords. You can change your passwords for your student loan account, FSA ID, and bank or credit union accounts. You have to make sure that you use strong passwords that will be hard for scammers to guess.