Learn How to Spot a Student Loan Scam

Spot a Student Loan Scam

We all know that scammers live amongst us. They’re trying to find out our personal information to gain access to our bank accounts, our health care, our savings … and increasingly scammers are targeting student loans, as well.

Often these scammers tend to rear their ugly heads when someone with a student loan is making changes to his or her current plan, like consolidation, lowering payments or trying to have debt removed. It’s a scary prospect (adding one more thing to be on the lookout for when it comes to identity theft), but with a little extra attention you should be able to spot the warning signs of a scammer. Here are a couple big things to be on the lookout for:

Scam Sign No. 1: They make too-good-to-be-true promises

What it looks like: As with other things in life, often a promise that sounds too good to be true is too good to be true. Remember that federal loans typically can’t be forgiven unless there are certain circumstances for which you qualify. In other words, if a company promises to make your debt go bye-bye without even knowing whether or not you qualify for debt forgiveness, more likely than not it is a scam.

Scam Sign No. 2: Their logo or name seems oddly familiar

What it looks like: If the company you’re dealing with has a name that’s almost but not quite the same as a well-known debt relief/student loan servicing company, that’s a big red flag. Always check with the Better Business Bureau for reviews of any company before working with them, since many scammers may try to use the likeliness of well-known companies to lure confused people in.

Scam Sign No. 3: They ask for fees up front

What it looks like: Advice or counseling as it relates to student loan debt relief shouldn’t come with a charge, and you should never pay anything up front before a company has even done anything to help you out. If the company you’re dealing with asks you to pay before anything has even been done, stop working with that company immediately.

Check out this piece for three more ways to spot a student loan scam so you don’t fall victim.

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