Beware of Student Loan Forgiveness Scams: A Guide to Protecting Yourself

Tragic but true- more than 42 million Americans are reeling under due student loan debts. At this moment, American needs nothing less than legislative action to recover from the rising debts. For more details on Student loan forgiveness scams read below!!!!

Total due student loans in the US are over $1.75 trillion, combining federal and private loan debts. In the plight of the situation, the US allows multiple student loan forgiveness offers. However, the problem only begins there.

There are hordes of Student loan forgiveness scams in the US. The scammers will rush you, saying there’s a limited window to avail yourself of some made-up special offer. Many students struggling with loan debts fall prey to their soft calls.  

With the rise of student loan forgiveness scams, being informed and vigilant is crucial when seeking help with student loan debt.

The Rise of Student Loan Forgiveness Scams

Student loan forgiveness scams are growing hastily in the US. Scammers are potentially spoofing tens of thousands of students regularly.  

In the last few years, the Federal Trade Commission (FTC) refunded more than $10 million to over 50,000 victims of several Student Loan Forgiveness Scams.

Trust me, detecting scams is no big issue. But most borrowers reeling under debt are not in the right shape of mind. Hence, they are susceptible and prone to set foot into the booby traps laid by scamsters.  

The most common scam is phishing. You will often see scammers calling or texting you, asking for personal details. They can usually crack databases to track your real name, debt records, etc.

But don’t be fooled. The US Department of Education does not forgive loans without prior notice. Secondly, scammers fool you by offering forgiveness schemes that are too good to be true.

For example, young Alex, graduating this year, got a call last week. He contacted one of our experts at FinanceTeam. The scammer offered a pre-approved waiver of 60% of his loan. They had all the details of his pending loans.

He doubted it was a vicious call. He hasn’t yet cleared 50% of the debt. And paid only 40 monthly installments. We asked him to research and find out if such lucrative offers exist.

There’s another lesson in here for you. Don’t indulge in personal offers pitched by tele-callers. The Dept of Education would never make such a move out of the blue.

We were exploring why student loan forgiveness scams are so prevalent. Firstly, we discovered that qualifying for a forgiveness scheme is not as easy as the policies sound. However, there is a catch.  

Types of Student Loan Forgiveness Scams

You must know about common ways that student loan forgiveness scammers adopt. With new technical roadways every day, it is difficult to determine how they’ll target you.  

We can, however learn about some common and frequently recurrent scam patterns:

• Overview of different types of scams, including:

Phony forgiveness programs

Phishing scams are now commonplace in the US. Scammers may text or call you and try to gain your attention with hook sentences. For example, they may ask you to act immediately before the llimited-period forgiveness campaign discontinues.  

One of my readers received a message: Your student loan might qualify for a complete discharge. Indeed, you will feel intimidated and taken aback. Other common phishing sentences scammers use are: “Your Student Loan is flagged for forgiveness but pending your verification.”  

Fake consolidation services

Scammers may offer you a chance of debt consolidation, even if you’re not eligible for federal consolidation schemes. However, you will find that all such offers demand an upfront token fee payment.

Lately, a message came in from the Texas Attorney General. It stated that it should be deemed fake whenever a company charges upfront to consolidate your loan or pass your forgiveness plea.  

Scams targeting specific groups (e.g., veterans, teachers)

The US Veterans Benefits Administration stated that veterans often receive student loan forgiveness offers. We know that The Parents PLUS loans are pretty popular in the US.

Here, the parents or responsible co-signers are primarily responsible for paying back the loan. In the same way, teachers have access to the Teachers Forgiveness Funds. Both of them have a decisive role in validating student forgiveness programs.

Hence, they are also made soft scam targets. Around 40% of the parents receive phishing calls, messages, and emails.

Warning signs and red flags to watch out for

There are a handful of red flags to call out for. Firstly, scammers will demand upfront fees. They will also make tall claims not backed by supportive federal or banking schemes.

How to Protect Yourself from Student Loan Forgiveness Scams?

Until you know how scammers will approach you, you’re always vulnerable. I hope these Tips for researching and verifying the legitimacy of student loan forgiveness programs will help you.  

Remember, scammers may use official-looking names, seals, and often logos. But these are not enough when you are already aware. Firstly, they will always ask for upfront fees or ask you to click on an encrypted link or share OTPs.

In the same vein, The Federal Student Loans website released an ad. It clearly says that all formal communication regarding loan forgiveness will be done through [email protected] only.  

Other ways

You can also verify the information that scammers share through US government websites. Experts say that most borrowers may be easily swayed by the offers they come up with.  

Often, banks and credit unions may also offer waivers and refinancing offers. But it is unlikely that they will share debt consolidation direct links with you. Moreover, no federal site will generally provide your time-limited forgiveness offer. Even if such an offer exists, you will get to know that through a mass disclaimer.  

It is better not to work with local loan agencies offering private student loans. It is less likely they would be trustworthy. Moreover, they may share your contact details with scammers.

Discussion of safe and legitimate options for student loan forgiveness

Here are some safe and legitimate options. To be safe, avoid falling prey to scammers. Also, follow these steps to protect yourself from the scammers:

1. Trust and use the government websites only  

2. Always avoid sites or agents who demand upfront payments

3. Be aware and try to identify red flags of the unsolicited offers

4. Research about the bank or union that offers you lucrative private student loans 

What to Do If You’ve Been Scammed?

I know it is hard to jerk off the temptation of lucrative offers. The fact that some unions offer perfect consolidation or refinancing offers is actual as well. But what to do,if you are scammed:

1. File complaints with the Federal Trade Commission or with ReportFraud.ftc.gov.  

2. Then report to the Consumer Financial Protection Bureau

3. Contact your Student Loan Ombudsman and your Attorney General also

Conclusion

Do you think you have been a victim of Student loan forgiveness scams? Remember, this scam may put your StudentAid.gov account at risk. So, it’s essential that you wouldn’t be sharing your username and password with any anonymous. If needed, attend student loan counseling sessions and learn more.

Also, log in and change your password promptly. Then check your account details and ensure that it’s still accurate. Lastly, file a complaint if needed. Let professionals handle and maintain the sanctity of your student account.

If you feel you may be at risk, you can communicate your queries here. Let us know of the issue and we will answer you soon!

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