U.S. College Students With Loans Must Be Mindful Of Scammers
Millions of U.S. college students have to take out student loans, and it’s a major financial burden. The average college student graduating in 2015 could have roughly $33,000 in student loan debt.
Student loan debt is so prevalent that scammers will try to take advantage of students and graduates. It begins with an email, phone call or letter from a company that suggests the student can lessen the debt for a small fee. The “company” claims it’s assisted thousands of other student loan holders. Rather than helping students reduce their debt, they actually take the money and run.
The truth about student loan forgiveness – it’s not easy, and it can’t be done quickly.
Scammers tend to strike during the summer more often, either because students just graduated from school or are gearing up back for school and are applying for funds.
One version of the scam involves them claiming students can save money by combining loans. Some scammers will move the loans to a private lender who’s got a higher interest rate.
There are just three ways to reduce a student loan debt
Public Service Loan Forgiveness program
Years made making on-time payments on qualifying repayment plan
Ability to work and make loan obligations
Here are several red flags to watch out for and things students should do in order not to be scammed:
Upfront fees – You should never pay any fees upfront. Watch out for phrases such as “We do all the work for a small fee”. Actual lenders will get their percentage after the service is done.
Don’t give them the power of attorney to negotiate on your behalf, as scammers do this to control the loans.
Ask questions and carry out research – See how long they’ve been in business. Are they established? Are they pressuring you to decide quickly? Don’t provide them with any personal information.
Learn about your options – If students have difficulty making payments, they are advised to call the lender themselves to find out what their options are.
Deal with payment notices – Students need to deal with any payment notices right away since the loan will only go higher and cost more for a longer timeframe.
Students need to be mindful of these scammers to ensure they don’t get taken for a ride. After all, if something sounds too good to be true, it probably is.