09/11/2019 | News release | Distributed by Public on 09/11/2019 16:02
By Chris Jackson
Asst. Vice President of Retail Services
The cost of college education is daunting enough.
But if you're one of the 45 million Americans who are trying to pay off your college loans, you could also be a target for student loan scams disguised as 'loan forgiveness programs.'
'Recently, there has been an increase of Internet ads promoting student loan forgiveness or a dramatic reduction in student loan rates or payments,' says Steve McCullough, president and CEO ofIowa Student Loan. 'Frankly, we have to remind individuals that if it sounds too good to be true, it probably is. However, legitimate options are available and it is important that students and families know where to find reliable information.'
The most important thing to remember is this: When it comes to your student loans, there is absolutely nothing that a so-called 'student debt relief company' can do for you, that you can't do yourself for free.
In this article, we'll break down how to detect and avoid suspicious loan forgiveness offers:
Examples of Student Loan Scams
The U.S. Department of Education recently highlighted some examples of false claims that have been made by student loan scammers:
A few warning signs, in particular should raise your suspicions about false loan rescue offers:
Are All Student Loan Forgiveness Calls a Scam?
In a short answer, yes. Because when it comes to your federal student loans, you should never need to pay a third-party company to receive assistance. Many unethical companies will charge fees to enroll you in federal programs that were free in the first place.
While there is a difference between an illegal scam and simply paying for something you don't need, many so-called 'debt relief' agencies additionally mislead people by wrongly claiming to work with the Department of Education, falsely promising to forgive loans and violating telemarketing and communications laws.
To combat these scams, the Federal Trade Commission has even launched a nationwide initiative called 'Operation Game of Loans ' to file criminal complaints against companies who break the law. Sadly, people still fall victim to these scams every day.
How to Avoid a Student Loan Scam
How to Report a Student Loan Scam
If you believe you have witnessed a student loan forgiveness scam, file a complaint with the Federal Trade Commission or report the scam to your state attorney general. Meanwhile, if you believe you have fallen victim to a student loan scam:
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