How to Avoid Student Loan Payment Scams

Hello everyone, today we’ll go over how to Avoid Student Loan Payment Scams. For a price, some businesses guarantee to assist in decreasing student loan debt. However, nothing they can do for you is more free than what you can do for yourself. Additionally, some businesses that offer to reduce student loan debt are frauds. Companies are not allowed to charge you before assisting you. Here are some additional tips on how to stay clear of these frauds. So let’s get started without further ado.

Sometimes it seems like student loans are a swindle. Following allegations that it created predatory student loans, Navient, one of the major suppliers of student loans, agreed a $1.85 billion settlement with 38 states and the District of Columbia in January 2022. The Consumer Financial Protection Bureau, many states, and lawsuits were filed against it (CFPB). Over 66,000 borrowers nationally owe $1.7 billion in subprime private student loan amounts that the business will cancel.

How to avoid student loan payment scams

  • Be wary of promises of quick loan forgiveness. This is a common tactic of scammers who target people most in need of debt relief and most likely to want a quick outcome.
  • Does the person contacting you pose as a government representative? Scammers may feign a government seal and sometimes even a government e-mail address. You are unlikely to be contacted directly by a government representative with the promise of quick debt relief, so if you have federal loans you should go directly to StudentAid.gov.
  • Be careful who wants money up front. Neither the FTC nor any other government agency will ask for money before assisting you with student debt relief.
  • Do not give out your Federal Student Aid (FSA) ID. Because the FSA ID is considered a legal signature by the U.S. Department of Education for use in all its online systems, no one but you-not even your parents, loan representative or school officials-should have access to that number. If anyone asks for it, report it to the FTC by calling 1-877-FTC-HELP (382-4357).

How to Spot a Student Loan Scam

As with all scams, it is best to be vigilant to avoid negative consequences. Student loan scams are the same, as there are some telltale signs that will let you know that you are not dealing with someone who can condone your student loans. First, watch out for advertising language in e-mails, messages and phone calls. There are a few key phrases that FederalStudentAid points out that should be an immediate red flag:

  • “Take immediate action to qualify for student loan forgiveness before the program is terminated.”
  • “Your student loans may qualify for full discharge.” Enrollments arrive first and are served first.”
  • “Notices to students: Your student loan is flagged for forgiveness pending verification. Call now!”

Although actual student loan forgiveness plans are available to borrowers, they are not distributed like a radio lottery. In general, if it sounds too good to be true, it is likely to be a scam.

Final Words

We hope you enjoyed our article on How to Avoid Student Loan Payment Scams. Remember that all government programs that offer student loan debt relief through the Department of Education or the FTC are always offered free of charge and that no third-party companies distribute relief funds in partnership with them at this time. If you are contacted by people claiming to be from your private lending institution, collect their name and phone number, then hang up and call your lending institution directly to verify the authenticity of the call. If you liked our article, please share it with others.

I hope you understand this article, How to Avoid Student Loan Payment Scams.

James Hogan
James Hogan
James Hogan is a notable content writer recognized for his contributions to Bollyinside, where he excels in crafting informative comparison-based articles on topics like laptops, phones, and software. When he's not writing, James enjoys immersing himself in football matches and exploring the digital realm. His curiosity about the ever-evolving tech landscape drives his continuous quest for knowledge, ensuring his content remains fresh and relevant.

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