As of 2019, there is over $1.5 trillion in student loan debt for the United States. Billions of dollars are being loaned each year, and scammers are actively trying to get your money by offering phony services. The Consumer Finance Protection Bureau has issued multiple warnings on what to look for. Below is a common student loan scam that you must be aware of when you are looking for help for yourself or a child.
What is the New Student Loan Scam?
Student loan forgiveness is all in the news nowadays. The concept promises to forgive any and all outstanding student loan debt you or your child may have. You may receive emails, texts, or even calls in which you are promised your student loan will be paid off. This can be pretty tempting given the average amount of student loans is approximately $30,000. Student loan scammers can be especially active during this time of year. Their intent is to focus on those who have just graduated and are at the beginning of paying off their loans. Communications may mention changes between the Trump and Obama administrations and warn of impending deadlines.
How the Student Loan Forgiveness Scam Works
These scammers will ask for a “modest fee” in order to apply for and obtain your student loan forgiveness. You end up responding via phone, email, text, etc. The scammers will then ask for your credit card information and upfront payments. They may also ask for checks, wire transfers, and even gift cards as payment. They may also ask for a monthly fee. Any of the above are red flags that equal Student Loan Scam.
How to Spot a Student Loan Forgiveness Scam
It is highly unlikely you would ever receive a phone call or text regarding your student loan – unless you are delinquent. Here are a few other ways to spot the scam:
- They use a phony name such as a variation of “The Obama Student Loan Forgiveness Program.”
- The only legitimate one we know is “Public Service Loan Forgiveness.”
- High pressure sales tactics.
- Direct asks for sensitive personal and financial information.
- The company appears in click bait, search engine ads, social media, and other unreliable means.
We recommend copying and pasting the text (or phone number) of a suspected scam into a search engine. You may be surprised to see the results come from scam spotting websites.
Not Every Student Loan Service is a Scam
Not every loan service is a scam, although there are many out there. Legitimate private student lenders do exist and are willing to look at your complete loan portfolio to advise you on the best course of action. Maybe it’s a refinance, but you should never be contacted for “complete student loan forgiveness.” These services also never charge you an upfront fee. You may also go to the student federal aid website to change or consolidate your loan. This course of action can result in longer payment periods and higher interest. Proceed with caution.
The Federal Trade Commission advises that if you are the target of one of these student loan scams to file a complaint should file a complaint at by clicking here or contact the lender directly.
Bookkeeping Help in Houston
Feel free to contact us if live in the Houston area and need help getting your student loans and other finances in order.