Student loan debt far outweighs credit card and auto loan debt for most Americans. Because student loans have become such a burden to many people, scammers have found a way to prey on these overwhelmed fears of student loan debt.
What Do the Scammers Do?
These scammers call your phone, promising to help with student loan forgiveness or to lower the monthly payment. In the heat of the moment and in order to find relief from the debt, you give them personal information and agree to pay them a fee to help you. Then, you hear nothing for months from the student loan lenders because the crooks have changed your address where your statements are being sent. Eventually, the student loan debt will come back either by appearing on your credit report and affecting a credit score and/or by an offset of a tax refund, bank levy or garnishment of wages.
“Operation Game of Loans”
According to a recent CNBC article written by Annie Nova, the Federal Trade Commission recently launched an initiative called “Operation Game of Loans” to stop these scams. Experts caution that you should never share your federal student ID, except to your services or the government. Some tips offered to avoid scams are as follows:
- Fast student loan forgiveness is probably a scam.
- If you pay a fee upfront for help, it is a scam.
- Verify any seal being used on correspondence is an actual U.S. seal and not a fake.
- No one should ask you for your FSA ID
Most forgiveness or disability programs require a borrower to fill out additional paperwork and meet certain requirements. Anyone offering to have them forgiven immediately for an upfront fee is a scam. The article does point out that NerdWallet has built a database of these nasty scammers, so check it if you think you may have been scammed. You need to contact the services of your student loan, and it would also be good to change your username and password and stop any payments to these fraudsters.
Good, Solid Advice Can Help
We cannot make your student loans disappear. We can offer you good advice on how to contact the right people to manage student loan debt and whether bankruptcy would be helpful or not. In counseling to debtors with student loan debt problems, I have found that no one truthfully discussed with people on the front end what it meant to borrow the money for school and/or living expenses and ultimately their ability to repay it once they did or did not receive their degree.
My advice to those looking to borrow future student loans is: borrow cautiously, just like with a house or car loan, because the bankruptcy laws are not as forgiving toward student loans as they are to other forms of debt.