All of the confusion surrounding higher student loan payments and wage garnishment has experts warning borrowers to beware of scammers preying on your desperation.
Elaine Rubin, a student loan policy expert, says borrowers should be on high alert for student loan scams offering to lower their payments, get their debt canceled or make sure their wages aren’t garnished.
“All the noise, the concern and the fear starts to bring about more predatory or scam companies to contact borrowers to offer them an ‘easy way out,'” Rubin said.
It’s always important to stay vigilant and look out for scammers, but student loan borrowers should be even more cautious right now, since the Consumer Financial Protection Bureau has been instructed to “deprioritize” predatory student loan cases.
Student loan scam texts, calls and emails aren’t new, but reports of these scams have been on the rise since the pandemic. Whenever there are policy changes that lead to confusion, bad actors are more likely to take advantage of the situation.
“There is a risk that predatory companies could be more predatory in this type of environment,” said Rubin. “It’s always important to be on top of what’s going on and understanding how it directly impacts you.”
Some companies may charge you money for promises they can’t deliver, like wiping out your debt, while others might charge you for a service you can do for free on your own. If you receive an offer for any of the following, there’s a high chance it’s a scam:
- Consolidate your debt
- Grant you loan forgiveness
- Discharge your debt
- Lower your balance
- Fix your credit score
- Get your loans out of default
“You don’t need the help of anybody asking for additional funds,” added Rubin.
If you’re feeling overwhelmed by your debt and want help reviewing your options, Rubin said there are trustworthy services out there — you just have to do your research. The Institute of Student Loan Advisors, for example, is a nonprofit organization that offers free services to borrowers.
As for any offer claiming it can erase your debt, steer clear.
“Chances are if it sounds too good to be true, it’s probably not true,” Rubin said.
