Student loan forgiveness scams are a growing problem in the United States, where the average student loan borrower carries over $30,000 in debt. These scams often prey on the desperation of borrowers struggling to pay off their loans, promising to help them get their loans forgiven or reduced in exchange for a fee. Unfortunately, these scams often do more harm than good, leaving borrowers with even more debt and fewer options.
Types of student loan forgiveness scams
One common type of student loan forgiveness scam involves companies that claim to be able to help borrowers get their loans forgiven through various programs, such as the Public Service Loan Forgiveness (PSLF) program or the Teacher Loan Forgiveness program.
These companies often charge high fees for their services, promising to do all the paperwork and legwork to help borrowers get their loans forgiven. However, these companies often have little to no success in actually getting loans forgiven, and many borrowers end up paying thousands of dollars for nothing in return.
The negotiating scam
Another type of student loan forgiveness scam involves companies that claim to be able to negotiate lower monthly payments or interest rates on behalf of borrowers. These companies often charge upfront fees for their services, promising to use their expertise to get borrowers better terms on their loans. However, these companies often have little success in actually getting borrowers better terms, and many borrowers end up paying fees for nothing in return.
It’s important to note that the only way to get your student loans forgiven is through a federal student loan forgiveness program.
There are several programs available, including the PSLF program, the Teacher Loan Forgiveness program, and the Income-Based Repayment (IBR) program.
These programs are free to apply for and are administered by the federal government, not by private companies. If a company is offering to help you get your loans forgiven in exchange for a fee, it’s likely a scam.
Our investigations into Common Scams of 2023
Red flags of student loan forgiveness scam
To avoid falling victim to a student loan forgiveness scam, it’s important to do your research and be aware of the red flags. Here are some tips to help you avoid student loan forgiveness scams:
Don’t pay upfront fees
If a company is asking you to pay upfront fees to help you get your loans forgiven, it’s likely a scam. The federal government does not charge fees to apply for student loan forgiveness programs.
Be wary of high-pressure sales tactics
Scammers often use high-pressure sales tactics to try and get you to sign up for their services. If a company is pressuring you to sign up for their services or is making unrealistic promises, it’s likely a scam.
Do additional research
Before you sign up for any student loan forgiveness program, do your research and make sure it’s legitimate. Check with the Better Business Bureau and the Federal Trade Commission to see if there have been any complaints filed against the company.
Don’t give out personal information
If a company is asking for your personal information, such as your Social Security number or bank account information, be cautious. Only give out this information if you are sure the company is legitimate.
Be cautious of unsolicited offers
If you receive an unsolicited offer for student loan forgiveness, be cautious. These offers are often scams.
Know your rights
Familiarize yourself with your rights as a borrower. The Consumer Financial Protection Bureau (CFPB) has a number of resources available to help you understand your rights and options for managing your student loan debt.
If you think you may have fallen victim to a student loan forgiveness scam, it’s important to act quickly. Contact the Federal Trade Commission to report the scam and seek help with resolving the situation.
You can also contact the Department of Education’s Student Loan Ombudsman to get help with resolving issues related to your student loans.
In conclusion, student loan forgiveness scams are a growing problem in the United States, preying on the desperation of borrowers struggling to pay off their loans. These scams often do more harm than good, leaving borrowers with even more debt and fewer options.
Loan Forgiveness Scam Blacklist
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Attention: Consumers who have been contacted by scammers could have had their personal information breached. TotalScam!™ highly recommends that consumers whose information has been breached obtain an identity theft protection service immediately.
There are several companies that offer identity theft protection in the US. One of the most inexpensive options we were able to find is the protection offered by LifeLock. You can start your protection here.
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Fraudulent websites can be easily spotted by looking out for these 5 red flags. Learn about them by visiting the following this link: How to tell if the website is a scam in 5 steps.
Yes. If scammers are in possession of your personal information, they can use that to steal your identity. For more on this subject, please read: How scams lead to identity theft.
There are various ways in which scammers gain access to your personal information. One such way is by purchasing consumer data on the darknet. When a website is hacked, which happens quite often, hackers steal databases containing personal information and sell that to the highest bidder. This information is then used to steal identities, ruining lives in the process. For more on this subject, follow this link: How scams lead to identity theft.
It depends on the method of payment. For more on this subject, please read: How to recover your money if you’ve been scammed.
Most scam artists reside outside of the US and use threats to exact more money from their victims. Nevertheless, all threats should be taken seriously, especially if scammers have your name and address.