Could I be Scammed With My Student Loan?

Student loan forgiveness

As you probably know, there are all types of scams in the world these days. The one we want to focus in on today relates to Student Loans. These loans can come in different shapes and sizes. They can be issued by the government (Federal Student Aid – FSA), or they can be issued privately by your local bank or credit union. Regardless of how you get the loans, the common theme remains: “I need to pay these off!”

Student loan forgiveness scams

Many Scam companies will tug on your heart strings to get through to you and dignify their story. One of the most common tactics scammers focus on is Desperation and Urgency. It’s tough to get by these days. And for some, it’s always been tough. The prospect of lowering your student loan payment, paying them off early, or finding loan forgiveness is VERY enticing. However, remember the old cliche: “If it sounds too good to be true, it probably is.“

The Department of Education provides and processes hard-copy and online applications for income-driven repayment, consolidation, deferment, and forbearance for FREE, and also provides free guidance on how to complete the paperwork.

Scammers will prey upon the desperation and circumstances of borrowers in order to convince them to make rash decisions. Anyone with student loans could be the next casualty. Don’t be another statistic. In this series, we plan to share ways to avoid being scammed, what the scams are, and what you can do if you become a victim.

Find out if you have been scammed

Contact your Primary Loan Servicer and/or FSA

One of the best ways to learn if you’ve been scammed is to communicate with your primary loan servicer directly. Most Student Loan Servicers (Federal or Private) are aware that there are scam companies out there. They have typically not heard of any of them by name. In fact, there may be a couple of reputable companies out there (possibly Non-Profit Organizations, which your loan servicer likely has still never heard of…but that’s okay). The more important question to ask your loan servicer is whether or not your payments have been made, or that paperwork was received. You want to make sure the company you hired is following through on their promises and services. If the Loan Servicer confirms it, then you’re okay for now. If not, there’s a good chance you were scammed.

Similarly, if the 3rd party company you hired says they have made an arrangement with your loan servicer or FSA so you can have a lower payment, call and confirm that with either FSA or your loan servicer directly. If they have no record of this payment arrangement, nor any other contact, then this is a clear sign of a potential scam. In fact, most loan providers will never even speak with a 3rd party at all without the direct consent of the borrower.

Common student loan scams and red flags

Check out our expert’s guide for common student loan scams and red flags.