09/12/2022 | News release | Archived content
Video Source: Federal Trade Commission
You've probably heard about the new government plan to forgive some federal student loans. Also in the news: the federal student loan payment pause has been extended to December 31, 2022. But know this - scammers are watching the news, too.
"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 of Iowa 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 student loan scam calls and other student loan forgiveness scams.
Examples of Student Loan Scams
The U.S. Department of Education recently highlighted some examples of false claims that accompany many student loan scams:
These warning signs, in particular, are red flags for potential student loan forgiveness scams:
Are All Student Loan Forgiveness Calls a Scam?
In a short answer, yes. Many unethical companies will use a student loan relief helpline to manipulate individuals struggling with their loans. They will make offers and charge fees to enroll you in federal programs that were free in the first place. When it comes to your federal student loans, you should never need to pay a third-party company to receive assistance.
While there is certainly 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 student loan 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 student loan scam calls every day.
How to Avoid Student Loan Scams
To avoid scams and protect your online safety, follow these tips:
Where Can I Get Real Help With My Student Loans?
How to Report Student Loan Scams
If you believe you have witnessed an attempted student loan forgiveness scam, you should file a complaint with the Federal Trade Commission and 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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