How to Protect Yourself From Student Loan Scams

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(TheConservativeNews.org) – As the moratorium on student loan repayments approaches its end, many people will be considering debt relief programs. These schemes can help those in financial trouble shoulder their financial burdens, but you should exercise caution. Not all debt relief service providers are as they appear.

With this in mind, there are certain things you should always keep in mind to avoid student loan scams.

Up-Front Fees

One of the clearest signs of a student debt relief scam is a requirement for the payment of fees up front. 

There are legitimate student debt relief firms that charge fees for their services. However, it’s against the law for anyone to charge you a fee for a service like this unless there’s a change in the structure of your debt. Once they’ve acted on your behalf to lower what you owe or renegotiate your repayment plan, they can ask you for money, but not before.

Sensitive Information

Another red flag is a request by the relief company for items of sensitive information. Some scam artists will look for your Social Security number or Federal Student Aid ID number. If they gain access to these credentials, they will be able to execute certain functions on your account without your consent.

If you’re not sure whether an offer is legitimate, check out the Repayment Estimator on the Federal Student Aid government website. This will give you an accurate picture of what you can expect in terms of debt forgiveness.

Promises That Are “Too Good to Be True”

If a company is advertising loan forgiveness immediately, or within a very short timeframe, they’re probably trying to scam you. While student loan forgiveness is possible, it is only available to specific types of applicants, and generally takes years to achieve.

If you see ads for debt relief with any of these features, or which present any other reason for suspicion, it’s probably a good idea to steer clear of them. While student debt management is a legitimate industry, there are a lot of bad actors involved in it. If in doubt, err on the side of caution.

Copyright 2020, TheConservativeNews.org

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