When you are struggling to pay off student loans, it is tempting to believe a company that claims they can eliminate your debt. But if you hand over your personal information or have to pay the company expensive fees to do this, you may find yourself in a scam.
There are a lot of companies that advertise that they can help you with your student loans. Before taking action with any company, you need to remember that you do not ever have to pay someone to get help with your Federal student loans if you do not want to.
Here are five red flags of common student loan scams and ways to avoid them.
1. You are asked to pay upfront or monthly fees to get help
Anything a debt relief company can do; you can do on your own. Paying off your student debt can be done for free at StudentLoans.gov. If you are looking for more guidance on how to pay off your student loans without fees, you can contact a student loan counselor certified by the National Foundation for Credit Counseling.
2. The company promises immediate loan forgiveness
Do not just believe any company that talks about immediate loan forgiveness. There are government programs that can reduce Federal student loans after a certain amount of time. You can use Federal Student Aid’s Repayment Estimator to see your projected loan forgiveness based on income and family size.
3. You are pressured by a salesperson to sign up
Typically, companies selling student loan debt relief will be staffed by sales representatives. Do not let urgency or a pushy salesperson get to you. Make well-researched decisions about your debt and the legitimacy of a company before seeking their help.
4. You are asked to share personal information
Companies may ask borrowers for personal information such as your Social Security number. Giving a company your personal information allows them access to your account. When signing into your account, the company can make decisions on your behalf. Debt relief companies may ask borrowers to sign power of attorney agreements. Do not reveal your personal information or sign a power of attorney agreement. If you discover you have given your information to a company that is scamming you, contact your loan servicer and regain control of your account.
5. The company uses suspicious links
Sometimes scammers use what look like legitimate social media and search advertising links, so be cautious when clicking on these advertisements. Do research before responding to any company’s advertisement. Avoid giving your personal information to online forms that are not applications.
If you doubt the legitimacy of any emails or phone calls you might receive regarding your student debt, reach out to your loan servicer for more information. Do not click on or use any links provided in the suspicious messages you receive, even if they claim to be from the Department of Education. If a student loan debt relief company reaches out to you, see if they appear in the Federal Trade Commission list of banned companies.
Remember, student loan scammers can be tricky and deceitful, but you can avoid falling into their traps if you are aware of the red flags.
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