Each year, billions of dollars are being loaned to students. Quite naturally, there are scammers who try get your money offering services that you should study well so to avoid being scammed.
The Consumer Finance Protection Bureau (CFPB) has always warned students about what to look out for when you need a student loan or some help regarding it.
Student Loan Debt Help
Many companies advertise they can help you with your loans, and you can see them advertise on Facebook, on Google, or even send emails. Before taking any action with these companies, don’t forget that you don’t have to pay someone to get help with your Federal student loans if you don’t want to.
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Advanced Fee Scam
This scam has to do with a student loan company offering you the “best” interest rate and loan terms. You’ll be asked have to pay a “small” fee up front for their service.
Loan Consolidation Scam
In the case of the most common student loan consolidation scam, the company charges a consolidation fee, but actually doesn’t take any action. The fee will often be represented as a processing fee, administrative fee, or consolidation fee.
Law Firm Lawsuit Student Loan Scam
A law firm will offer to settle your student loan debt. You can come across lots of variations of this scam. A student aid company may contact you and promise that the given law firm can settle your student loan debt for thousands less than you owe.
Student Loan Debt Elimination Scam
Student loan debt must always be repaid. It can be eliminated only if you have a federally qualifying reason such as death, permanent disability, school closure, falsification of documents or identity theft. No company can promise to get your student loan debt eliminated.
Better Business Bureau (BBB) advises student loan holders to know the red flags and follow the bellow-mentioned tips to avoid getting scammed:
- Never pay upfront fees
- Never give a third-party power of attorney
- Do your research and ask questions
- Know your options
- Don’t ignore payment notices
- Keep your student loan debt under control
When trying to get help for your student loans, you should know your rights well and take smart steps. Use StudentLoans.gov, the government’s website for student loans, to educate yourself on everything from loan consolidation to repayment plans.