There are few things more degrading and frustrating in life than being scammed by someone. Not only is it an attack on your wallet, and potentially your identity, it can be an embarrassing and humiliating experience as well. Let’s look at some of the most common student loan scams so you know how to avoid them.
Attempts to Steal Your FSA ID and Other Credentials
Every year about five percent of U.S. adults fall victim to identity theft. While many times a stolen identity is totally out of your control, there are still things you can do in order to lessen the likelihood of having someone steal your identity. Knowing what to look for to avoid certain scams is one of the most important aspects to keeping your identity safe.
While there are nearly limitless ways for criminals to go about stealing sensitive information, posing as someone else—such as a representative from the education department—is one of the most common approaches. Oftentimes, these scammers will tell you something like they can eliminate your student debts if you just give them a few pieces of information.
First of all, no one is going to cold call you and offer you this kind of deal. Even if this is available to you at some point, nobody’s going to be seeking you out in order to forgive the money you owe them. Definitely file this under the “too good to be true” tab, and don’t give out your personal information when people unexpectedly call you. This is the kind of scam, however, where it’s easy to be caught off-guard in the moment; so be vigilant to not give up your personal identifying information.
Federal Student Loan Forgiveness Scams
With all the news over the past few years about the potential for federal student loan forgiveness, there has also been an uptick in criminals taking advantage of this. If someone calls saying they’re with the government and want to talk about loan forgiveness, be careful, it’s likely a fraud.
While there has been much talk about canceling some amount of student debt, there’s really no saying if this will actually become a reality anytime soon. Those who want to impact their loan repayment in a positive way in the present should consider a student loan refinance.
Your first question is probably “What is refinancing?” It’s really a straightforward process that’s done all the time with various forms of debt. When refinancing, you’re basically just taking out a new loan to replace your old one. This allows you to get a better interest rate on the new loan, or even change the repayment term.
Those with federal student loans should consider if they’ll lose benefits like income-driven repayment when refinancing. Since student loan refinancing can only be done through a private lender, this is often the case.
Getting You to Pay for Things That Don’t Cost Money
The process of obtaining and servicing your student loans can be confusing. Dealing with all the different elements can certainly feel overwhelming, especially when you don’t really know much about the inner workings of any of it.
Therefore, you might not even think twice about it if a company asks you for upfront payment or asks you to pay to file paperwork, even though these aren’t necessary at all. You don’t need to pay people to file an application for you. These things are all available to you for free.
Debt Relief Scams
There are certain situations where debt relief can be a legitimate option for consumers. On the same note, there are companies and organizations that have legitimate debt relief operations. This, however, needs to always be taken with a grain of salt.
When it comes to student loans, working with a debt relief company probably isn’t going to be your best option. Simply working with your loan servicer can allow you to find a more reasonable plan for your situation—no debt relief fees needed.
Whenever there’s money involved, you can be sure someone will try to scam you. Student loans are no exception to this rule. Knowing the top student loan scams can help you stay out of harm’s way.
