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Sure signs of student loan scams

Written by Andy Wise on . Posted in Wise Warnings.

The rising cost of tuition and fees and increasing student demand for financial aid set the table for a scammer’s delight. Here’s how not to be fooled into a student loan scam.

The statistics are bleak. Depressing, even. Unless you’re a scam artist ready to take advantage of them.

According to the College Board‘s 2017 report Trends in College Pricing, the average in-state tuition and fees at public 4-year schools rose by $300 between school years 2016-17 and 2017-18. Out-of-state tuition? An $800 average increase. Private nonprofit 4-year institutions? An average $1,220 increase — with an average total charge of $46,950 a year.

Scammers are jumping on those dreaded numbers to rip off students desperately seeking something to take the sting out of them. They’re offering bogus programs making big promises of loans that are quicker to pay off, cheaper to pay down…even fake programs to forgive student loans outright.

That’s why the Federal Trade Commission (FTC) offered these tips to spot student loan scams:

  • NEVER PAY AN UPFRONT FEE. The FTC said it is against the law for anyone to charge a student in advance before helping the student reduce or eliminate student loan debt. An upfront fee is a sign that source will take the money and run.
  • ONLY SCAMMERS PROMISE FAST LOAN FORGIVENESS. Not even legitimate student aid agencies can guarantee that. If someone’s telling you they can, especially without even knowing what your student debt situation is, they’re trying to scam you.
  • JUST BECAUSE THE BROCHURE HAS A U.S. DEPARTMENT OF EDUCATION SEAL ON IT DOESN’T MAKE IT LEGIT. Scammers rip-off official government or business seals all the time to make their offers seem real. You know the saying about a polished turd, right?
  • DON’T SHARE YOUR FEDERAL STUDENT AID (FSA) ID WITH ANYONE. In the wrong hands, your FSA ID could allow someone to take over your personal financial aid information and scholarship opportunities.

If you have a federal student loan, legitimate help starts here: https://studentaid.ed.gov/sa/repay-loans.

If you’re a private borrower, start a conversation with your loan servicer. See if it can adjust or at least partially forgive your student loan debt.

Copyright 2018 Wise Choices TM. All rights reserved.

 

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