From the Better Business Bureau of Central Virginia:
Traditionally, this is the time of year when aspiring graduates are eagerly planning their walk across the stage. Shortly thereafter, the student loan repayment process begins. The Better Business Bureau warns of deceptive scammers and encourages graduates to carefully research trustworthy sources related to federal repayment plans before giving any personal information.
Read the latest on COVID-19 emergency student loan relief.
Watch out for companies promising to reduce debt by lowering payments through enrollment in student loan forgiveness or other programs. They may also falsely promise to apply monthly payments to consumers’ student loans and to improve credit scores- all you have to do is pay a small fee so they can negotiate with the lender on your behalf.
In another version, dishonest collectors claim they can save you money by consolidating your loans if a minimal fee is paid.
“BBB urges consumers to research before you buy, especially check the BBB.org website for trusted student loan consolidation services,” said Barry N. Moore, President and CEO of BBB serving Central Virginia.
Best rule is to keep all of your personal information private and never give it to an unsolicited source.
The BBB offers these tips to protect yourself from student loan scammers:
- Research the lender. Visit BBB.org to read business profiles and check out companies before working with them. The FTC has consumer education related to student loan debt relief scams at ftc.gov/StudentLoans.
- Report it. If you have been a victim of a suspected scam, report it at BBB.org/ScamTracker.
- Empty promises lead to an empty wallet and more debt. Only scammers promise fast loan forgiveness. Scammers often pretend to be affiliated with the government. Never pay a fee upfront for help. Never share sensitive information, such as your FSA ID.
- Find a reliable source. Consumers can apply for loan deferments, forbearance, repayment or forgiveness, or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost, and these don’t require a third party.
For federal student loan repayment options, visit StudentAid.gov. Student loans can be forgiven only under specific circumstances, so contact your lender directly to see if any options are available to you.
If it seems too good to be true, it probably is. A company that claims it can quickly erase student loan debt isn’t being honest.
About BBB: BBB serving Central Virginia serves Richmond, the Tri-Cities, Charlottesville, and Fredericksburg, as well as 42 surrounding counties from Fauquier to Mecklenburg and Northumberland to Amherst. The nonprofit organization was established in 1954 to advance responsible, honest, and ethical business practices and to promote customer confidence through self-regulation of business. Core services of BBB include business profiles, dispute resolution, truth-in advertising, scam warnings, consumer and business education, and charity review.