With the burden of education debt weighing heavily on many individuals, it’s no surprise that numerous student loan forgiveness scams have emerged, targeting borrowers seeking relief. Despite efforts by the Federal Trade Commission (FTC) to combat such scams, new fraudulent entities continue to surface each year.
This issue has become even more pressing with President Joe Biden‘s recent announcement regarding student loan forgiveness. As borrowers navigate these complex waters, it’s crucial to remain vigilant and watch out for warning signs of potential scams.
What are the most common ways you could be scammed?
Scammers often guarantee immediate relief in exchange for upfront fees, disregarding the reality that legitimate forgiveness programs require time and specific qualifications.
Charging fees before providing assistance is illegal, and such requests should raise immediate suspicion. Borrowers can pursue forgiveness and consolidation independently without the need for costly intermediaries.
Legitimate entities will never ask for Social Security numbers or other personal data over the phone or via email. Providing such information can lead to identity theft and financial harm.
Fraudulent companies may falsely claim ties to government agencies to lend credibility to their schemes. However, legitimate government programs can be accessed directly through authorized channels, not third-party entities.
Scammers often employ aggressive tactics to rush individuals into making uninformed decisions. Genuine assistance providers will offer ample time for consideration and research without pressuring clients.
Signing over power of attorney grants unauthorized entities control over loan accounts, opening the door to misuse and unauthorized changes.
Borrowers who fall victim to these scams should take immediate action: Contact loan servicers to revoke any third-party authorizations.
Notify banks and credit card companies to prevent further financial harm. File complaints with relevant agencies such as the FTC, CFPB, and State Attorney General. Monitor credit reports and change passwords to protect against identity theft.
Legitimate avenues for student loan relief exist, including income-based repayment plans, consolidation, refinancing, and counseling.
By conducting thorough research and exercising caution, borrowers can navigate the landscape of student loan forgiveness with confidence, avoiding costly scams and securing genuine assistance for their financial well-being.
