{"id":11637,"date":"2020-06-17T12:54:11","date_gmt":"2020-06-17T12:54:11","guid":{"rendered":"https:\/\/www.loanry.com\/blog\/?p=11637"},"modified":"2023-12-01T06:35:20","modified_gmt":"2023-12-01T06:35:20","slug":"avoid-student-loan-scams","status":"publish","type":"post","link":"https:\/\/www.loanry.com\/blog\/avoid-student-loan-scams\/","title":{"rendered":"How to Avoid Common Student Loan Scams"},"content":{"rendered":"<p>[vc_row][vc_column css=&#8221;.vc_custom_1670002249829{margin-top: 1em !important;}&#8221;][vc_single_image image=&#8221;11796&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">Student loan debt is extremely high and is a major topic of conversation. With financial topics like these, they tend to be the target of scammers. At least three out of five people have received a phone call from an illegitimate company that claims they are the solution to your <\/span><a href=\"https:\/\/www.loanry.com\/blog\/types-student-loans\/\"><span style=\"font-weight: 400;\">higher education loan<\/span><\/a><span style=\"font-weight: 400;\"> debt.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sadly, due to desperation, fear, and other emotions, many borrowers fall for the tactics of these scammers. Don\u2019t be one of them. Below, we are going to discuss common student loan scams, how to spot them, and how to protect yourself from them.<\/span><\/p>\n<h2>How to Recognize and Avoid Student Loan Scams<\/h2>\n<p><span style=\"font-weight: 400;\">When looking for a lender, you need to be very careful and do your research. Make sure you are choosing the best option for you. You can always look for help here, on Loanry!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Pay full attention if you want to sign up for a student loan or maybe for a <\/span><a href=\"https:\/\/www.loanry.com\/blog\/personal-loans-for-students\/\"><span style=\"font-weight: 400;\">personal loan for students<\/span><\/a><span style=\"font-weight: 400;\">. These are <strong>some of the most common signs of fraud<\/strong> that have been detected up to this point:<\/span><\/p>\n<h2>Upfront Fees and Monthly Fees<\/h2>\n<p><span style=\"font-weight: 400;\">Most student loan scams will require that you <strong>pay upfront fees for their services or monthly fees<\/strong>. You will likely hear this a couple of times through this article, but it is important. Charging a fee for services does not automatically point to a scam. However,<strong> it is against the law for any debt relief help to charge fees before getting your results<\/strong>. There should be no upfront fees for the service at all, so if someone is trying to charge you before they do anything, run the other way.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As far as monthly fees go, they are not necessary. Understand something: You do not have to pay to receive grants or scholarships. Even if you get private student loans, you do not have to pay upfront. You also do not have to pay for things like:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.loanry.com\/blog\/need-know-fafsa\/\"><span style=\"font-weight: 400;\">Filling out the FAFSA<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changing your repayment plan or payment amount<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Loan consolidation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deferred payments<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Loan forgiveness or other government programs<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Every bit of those things is free of charge. Occasionally, scholarship providers may require an application fee. This is not necessarily unusual or a scam. If you are trying to apply for one that does ask for a fee, look into the scholarship first. Your school should be able to help you do this. A simple Google search can usually find pertinent information as well.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As far as any current student loans go, you can handle any business you need to directly with the loan service provider. <\/span><a href=\"https:\/\/www.loanry.com\/student-loans\"><span style=\"font-weight: 400;\">My student loan<\/span><\/a><span style=\"font-weight: 400;\"> service provider has an excellent website- as most of them do. I have the ability to change my payment plans, apply for an income-driven repayment plan or other plans, and more. I even have the ability to choose which of my loans get my payment if I want to pay a different one than the one they have placed as first in line.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And if I have any questions, I can contact them directly through the website- no middle man required. Don\u2019t pay for something that you can do yourself for free. And do not be fooled into thinking you cannot do it yourself. Take a look at StudentLoans.gov, too, for anything related to federal student loans.<\/span><\/p>\n<h3>Aggressive Sales Tactics and Urgency<\/h3>\n<p><span style=\"font-weight: 400;\">Everyone I know has experienced the tactics of a salesperson. <strong>They push and push and push to get you to buy<\/strong>. They make you fear missing out on a deal so you hurry and sign up immediately. The harder they push, the more you know that their paycheck probably relies on the commission from your purchase.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately, student loan scams tend to be worked by experienced salespeople. They know what to do to push you into a decision you probably would not make otherwise. If you feel pressured to sign up, take a step back, and look into the company.<\/span>[\/vc_column_text][vc_single_image image=&#8221;15578&#8243; img_size=&#8221;full&#8221; style=&#8221;vc_box_rounded&#8221;][vc_column_text]<\/p>\n<h3>Improper Grammar and Spelling<\/h3>\n<p><span style=\"font-weight: 400;\">Grammar and spelling mistakes are not all that odd. It is easy to accidentally press a \u201cT\u201d instead of an \u201cR\u201d on your keyboard, or something similar. It is also not unusual to get so caught up in your writing that you type \u201cyour\u201d when you mean to type \u201cyou\u2019re\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While everyone can make an occasional spelling or grammar mistake, <strong>many communications from companies that pull student loan scams contain a good deal of them<\/strong>. It is not always the number of errors, though. Sometimes it is the errors themselves. Unusual errors are a good sign that the company is fraudulent.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most legitimate companies have fewer errors. This is because many of them have a spell check program on their computers. They also tend to actually double-check their work.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Don\u2019t get me wrong- bad communication does not necessarily mean that it is one of the student loan scams. Even those of us who write for a living like me make mistakes and do not always catch them. These mistakes are more of a red flag than a full stop sign. If you receive a communication like this, take a beat and check into the company.<\/span><\/p>\n<h3>Asking for Authorization<\/h3>\n<p><span style=\"font-weight: 400;\">A lot of companies committing student loan scams ask for things that they have no business asking for, such as <strong>your social security number, your FSA ID, your sign-in information on your loan service provider websites<\/strong>, or even for you to sign a power of attorney agreement giving them the power to \u201cnegotiate\u201d your accounts. Please pay attention: No legitimate source of student loan help will ask you for any of that information. If you give these scammers any of that information, you could end up in a lot of financial trouble. You absolutely never know what they will do with it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If messing up your finances is not scary enough, think about all of the information that your student loan service providers have: Your identifying information, any income verification you turn in, family information, your home address, your telephone number, credit card information, and more. <strong>They can use this to<\/strong> <strong>steal your identity, clean out your bank account or credit accounts, and more<\/strong>. And, let\u2019s just be honest, there are stalkers and others out there who might use your home address for other reasons. So, do not give out this information.<\/span>[\/vc_column_text][vc_single_image image=&#8221;15577&#8243; img_size=&#8221;full&#8221; style=&#8221;vc_box_rounded&#8221;][vc_column_text]<\/p>\n<h3>The Threat of Legal Action<\/h3>\n<p><span style=\"font-weight: 400;\">Have you ever received one of those <strong>phone calls that tell you if you do not take immediate action that day, a law enforcement officer will be at your house that afternoon?<\/strong> I have, and the first time, I was scared to death. Fortunately, I had missed the live call and heard this threat on my voicemail, so I did not have to respond to a person immediately.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead, I searched my brain for anything that would warrant such action and finally called a friend to share my fear. Turns out, she had just experienced something similar and told me that it was a scam. After no law enforcement officer showed up at my house that afternoon- or any afternoon thereafter- I realized that she was right.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">People that scam others play on their emotions. One of those emotions is most definitely <strong>fear<\/strong>. If they can make you afraid enough to believe that you will be in jail, there is a good chance you will do what they ask. Let\u2019s alleviate some fears, shall we?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I cannot think of one single civil or consumer debt that you can be jailed for in America. If any debts can put you in jail, it is those such as unpaid taxes or unpaid child support. However, even those do not typically put you in jail automatically. There are court proceedings and warnings and a process.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, you do not get phone calls for stuff like that- unless it is from a lawyer you hired. Courthouses do not call. They send out official letters, usually dropped off by an official delivery person or process server.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other debts, however, like credit cards, loans, and such do not put you in jail. They can ruin your life in ways like keeping you from getting credit, buying a home or car, getting good interest rates, and possibly even getting certain jobs. Imprisonment is a totally different story.<\/span><\/p>\n<h3>Affiliations<\/h3>\n<p><span style=\"font-weight: 400;\">A lot of companies running student loan scams will claim to be affiliated with the Department of Education. While the Department of Ed does work with some companies, <strong>most companies that claim an affiliation are lying<\/strong>. You can look at the Department of Ed\u2019s website to see what trusted companies they work with, but remember, you are not required to pay for help with student loans. If someone is trying to charge you, know that you have many free options.<\/span>[\/vc_column_text][vc_column_text]<\/p>\n<h3>Common Student Loan Scams<\/h3>\n<p><span style=\"font-weight: 400;\">The number of student loan scams in play will likely continue to grow over time. And they will probably get more and more creative. Don&#8217;t let them fool you and don&#8217;t think that you will <\/span><a href=\"https:\/\/www.loanry.com\/blog\/guide-save-money-on-student-loan\/\"><span style=\"font-weight: 400;\">save money on your student loan<\/span><\/a><span style=\"font-weight: 400;\"> with their loan options. For now, though, there are some common ones to look out for:<\/span><\/p>\n<h4>A Stop in Your Loan Forgiveness<\/h4>\n<p><span style=\"font-weight: 400;\">Scammers use fear and urgency to get results. If someone calls you or <strong>sends you a notice that your loan forgiveness is about to end<\/strong>, ignore it unless it is straight from the Department of Education or your loan service provider. If there really is going to be a change, one or both of these two organizations will send you an official notice.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally,<strong> even if the government decides to make changes, it will not happen overnight<\/strong>. Things like that take time to move through all parties that must agree on them. It also takes time for things to be put in place. So, if there is going to be a change, you will know about it way ahead of time- not a few days or a few weeks beforehand.<\/span><\/p>\n<h4>Total Loan Forgiveness<\/h4>\n<p><span style=\"font-weight: 400;\">One of the most common student loan scams is when companies offer total or fast loan forgiveness. There are a couple of things for you to know here. First, only special circumstances can completely discharge your student loans. This tends to be things like:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Death<\/b><span style=\"font-weight: 400;\">&#8211; and no one wants to die to avoid student loan debt<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Disability<\/b><span style=\"font-weight: 400;\">&#8211; not a temporary disability but extreme and permanent disability<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bankruptcy<\/b><span style=\"font-weight: 400;\">&#8211; in some very, very rare circumstances<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Public Service Loan Forgiveness and Teacher Loan Forgiveness<\/b><span style=\"font-weight: 400;\">&#8211; for borrowers who work in certain job types for a specified amount of time<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The second thing to know is that none of these circumstances can get your loans discharged quickly. <strong>They all require a certain process and can take up to years to work fully<\/strong>. Companies claiming that they can do this for you are committing student loan scams- stay away from them. If you feel that you qualify for student loan forgiveness, you can speak to your loan service provider about it.<\/span><\/p>\n<h4>Loan Repayment or Loan Debt Relief<\/h4>\n<p><span style=\"font-weight: 400;\">If a company claims that they can <strong>settle your debt for lower than anyone else or that they can get you a special deal<\/strong>, it is not true. While debt relief companies can help you settle your debts for lower than the original amount, they cannot get better results than you or any other company can. If you choose to use a debt relief company, that is up to you. However, do not hire a company over because of an untrue guarantee.<\/span>[\/vc_column_text][vc_video link=&#8221;https:\/\/www.youtube.com\/watch?v=86HN_qD0mzM&#8221;][vc_column_text]<\/p>\n<h4>Taxes<\/h4>\n<p><span style=\"font-weight: 400;\">The Better Business Bureau warns of another of the popular student loan scams: Federal student tax. <strong>Scammers call unsuspecting borrowers claiming to be IRS agents or even FBI agents saying that they owe a federal student tax<\/strong>. This scares borrowers into paying these scammers to stay out of legal trouble. Here is what you need to know:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There is <strong>no such thing as a \u201cfederal student tax\u201d<\/strong>. This is a completely made-up term<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you owe the IRS for anything, you will receive an <strong>official notice<\/strong>&#8211; not a phone call<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><strong>The FBI does not collect debts<\/strong>, and they certainly will not call you asking for money to do such. If any legitimate agency needs to contact you, they will send official notices or show up at your door with official badges. Even then, you can make calls to verify their identity. The FBI is no stranger to scammers, so the legitimate organization will have no issue with you verifying someone\u2019s identity. But again, they are not debt collectors, so if someone shows up or calls about your debt, hang up or shut the door<\/span><\/li>\n<\/ul>\n<hr \/>\n<h3>Reduce Your Risk of Being Scammed<\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Only apply for student aid on the <\/span><a href=\"https:\/\/studentaid.gov\/h\/apply-for-aid\/fafsa\"><span style=\"font-weight: 400;\">official FAFSA website<\/span><\/a><span style=\"font-weight: 400;\"> to prevent illegitimate sites from intercepting your information. After completing the application, completely close out of your browser.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your <strong>FSA ID and your login information are for you and you alone<\/strong>. Do not give them out to anyone. Remember, legitimate sources will not ask for them.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><strong>Keep as much of your personal information as possible securely at home<\/strong>. Do not carry it around with you.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you feel you have given your information out to any illegitimate source, reach out to the supplier of that information- such as your student loan service provider, your credit card company, and so on. And immediately <strong>change any login information and passwords, cancel credit cards, and take any other precautions you can<\/strong>. The quicker you make these moves, the better chance you have of stopping trouble before it starts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Always, always, always check that any website you are entering personal information on is secure. You can easily do this by <strong>looking in the web address bar for a little lock<\/strong>. If it is there, the website should be secure.<\/span><\/li>\n<\/ul>\n<h4><b>Companies Known for Student Loan Scams<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">There are several companies that are known for student loan scams. Unfortunately, these scammers often simply just open up under another name. However, <strong>the FTC does share a list of companies that are known for student loan scams here<\/strong>, so be sure to check it out.<\/span><\/p>\n<h3><b>Conclusion<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">While organizations do work hard to prevent scammers from succeeding, it is up to each one of us to protect ourselves and our families. Learn all you can about scams as they are outed so you know what to look for. Above all, remember that if you need any help with your <\/span><span style=\"font-weight: 400;\">student loan debt<\/span><span style=\"font-weight: 400;\">, you can go straight through your loan service provider or the federal government for help.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are contacted by what you feel is an illegitimate company, report it so that others can be made aware. You can do this through your loan service provider, the FTC, or your state attorney general\u2019s office. These complaints are taken seriously and you can trust that they will be investigated.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<a class=\"arb-banner\" href=\"https:\/\/key.goalry.com\/get-member-key?utm_campaign=organic&utm_source=loanry&utm_medium=studentloanscategory&utm_content=banner\"><img decoding=\"async\" class=\"arb-banner-img\" src=\"https:\/\/www.loanry.com\/blog\/wp-content\/uploads\/2022\/02\/loanry-big-banner.jpg\" alt=\"Loanry\"><\/a>","protected":false},"excerpt":{"rendered":"<p>Sadly, due to desperation, fear, and other emotions, many borrowers fall for the tactics of these scammers. Don\u2019t be one of them. Below, we are going to discuss common student loan scams, how to spot them, and how to protect yourself from them.<\/p>\n","protected":false},"author":15,"featured_media":11795,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[40],"tags":[693,692,857],"class_list":["post-11637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-student-loan","tag-higher-education-loan","tag-my-student-loan","tag-private-student-loans"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/posts\/11637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/comments?post=11637"}],"version-history":[{"count":23,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/posts\/11637\/revisions"}],"predecessor-version":[{"id":18214,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/posts\/11637\/revisions\/18214"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/media\/11795"}],"wp:attachment":[{"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/media?parent=11637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/categories?post=11637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.loanry.com\/blog\/wp-json\/wp\/v2\/tags?post=11637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}