INDIANA – Although the pause to federal student loan payments ends September 30, the debt relief scams have already begun. Scammers are targeting student borrowers with false promises of loan forgiveness, help getting out of default, and lower monthly payments for federal student loans. Unfortunately, victims of these scams are likely to find themselves worse off than before.
How the scam works:
Someone contacts you saying you qualify for a debt relief program. They offer to get you extremely low payments or even outright cancellation of your loans. Scammers may even claim to be affiliated with the Department of Education to appear trustworthy.
“I was left a message to return a call from a Student Loan Debt relief program,” said an Indianapolis man in his report to BBB Scam Tracker. “Upon returning said message, I continued to be hung up on by 12 individuals after requesting to speak with a supervisor. All 12 individuals hung up on me mid-sentence and I was unable to reach a supervisor leading me to believe this is a scam. I have no student debt to consolidate and I was trying to convey this to the appropriate person.”
Before providing details about their offer, they request access to your personal student loan and financial aid information. They’ll say they need to review your account in order to identify what help they can provide. In reality, this enables them to see your personal identifying information, exposing you to identity theft.
In another version of the student debt relief scam, you’re offered lower rates or forgiveness in exchange for a large upfront fee. This scenario is likely to leave you on the hook for hundreds or even thousands of dollars—with no student loan help to show for it.
How to avoid student debt relief scams:
- Know your options. Loan forgiveness options and payment plans will differ based on your unique financial and employment circumstances. Borrowers should be fully aware of what loan forgiveness options are available to you.
- Use government relief programs. There are many options available to borrowers. Although they include specific eligibility requirements, you might find something that works for your situation on StudentAid.gov.
- Protect your student loan accounts. Ensure passwords on your accounts are secure, change them frequently, and don’t give them out to people you don’t trust.
- Research the debt relief service. Although many debt relief services are legitimate, there are lots of bad actors looking to take advantage of vulnerable people. Research the company on BBB.org, read customer reviews and check for past complaints.
- Approach offers of “debt relief” with caution. To qualify for any debt relief programs, you’ll have to apply for them first. It’s likely that any unsolicited offers you receive are scams or services offering to do something you can do yourself, for free.
For more information
To learn more about student debt relief scams, check out BBB Tip: Student Loan Forgiveness and BBB Scam Alert: Student debt forgiveness – for a fee?.
If you’ve been the victim of or seen a scam, report it to BBB Scam Tracker to help us keep the public informed about fraud.
ABOUT BBB SERVING CENTRAL INDIANA: For more than 100 years, Better Business Bureau has been helping people find businesses, brands, and charities they can trust. In 2018, people turned to BBB more than 173 million times for BBB Business Profiles on more than 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. There are local, independent BBBs across the United States, Canada, and Mexico, including BBB serving Central Indiana, which was founded in 1916 and serves 46 counties.