(UNDATED) – “Congratulations! You can get your student loans forgiven- it’s quick and easy!” If you think this sounds like a scam, that’s because it is.
Student loan debt affects more than 42 million Americans, with outstanding balances of more than $1.4 trillion. The Federal Trade Commission and Better Business Bureau are warning consumers of deceptive scammers.
Recently, the Federal Trade Commission has reached two multimillion-dollar settlements with a student debt relief company and a law firm. Under the settlement, the student debt relief company, Strategic Student Solutions, will pay $17.7 million; the law firm, Bloom Law Group PC in California, will pay $9.1 million.
Both the Strategic Student Solutions and the Bloom Law Group PC have an F rating with the BBB.
This company and firm preyed on consumers with student loan debt by falsely promising to lower their payments through enrollment in student loan forgiveness or other programs. They also falsely promised to apply monthly payments to consumers’ student loans and to improve credit scores- all you have to do is pay a small fee so they can negotiate with the lender on your behalf. In another version, scammers claim they can save you money by consolidating your loans- if you pay a minimal fee.
The FTC and BBB offer these tips to protect yourself from these scammers:
- Start with Trust. Visit bbb.org to read business profiles and check out companies before working with them. If you have been a victim of this scam, report it at bbb.org/ScamTracker
- The FTC has updated its consumer education related to student loan debt relief scams at ftc.gov/StudentLoans.
- Only scammers promise fast loan forgiveness. Scammers often pretend to be affiliated with the government. Never pay a fee upfront for help. Never share sensitive information, such as your FSA ID.
- Consumers can apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost, and do not require a third party. For federal student loan repayment options, visit StudentAid.gov/repay. Student loans can be forgiven only under specific circumstances, so contact your lender directly to see if any options are available to you.
- If it seems too good to be true, it probably is. Any company that claims it can erase your student loan debt in minutes is lying. Don’t bother responding to the ad or email.