A reader: I just finished my degree in May. Last week, I got a call from a company that has promised to get rid of my student loans. They say they can get my loans forgiven. They want me to give them $250 to start the process. Is this a scam?
Action Line: If you have been solicited by a company offering to get your student loans forgiven for a fee, DON’T DO IT! Up front fees for the promise of any type of debt relief is never a good ideas. You may pay a fee and end up getting nothing in return.
Can you have loans forgiven or get help replaying them? The answer is yes. BUT, there are very specific requirements of eligibility that may include your job, disability, the closure of your school or other circumstances. Forgiveness or cancellation means that you no longer have to repay the loan.
FTC gives signs of a scam:
▪ You shouldn’t have to pay an up-front fee. If you pay up-front to reduce or get rid of your student loan debt, you might not get any help – or your money back.
▪ No one can promise total loan forgiveness.
▪ Before they know the details of your situation, scammers might say they can get rid of your loans through a loan forgiveness program – programs most people won’t qualify for – or that they will wipe out your loans by disputing them.
▪ Only scammers will tell you to stop paying your student loans.
▪ Sometimes scammers will tell you not to speak with your loan servicer – supposedly so the company can negotiate a better settlement for you. But not paying student loans can damage your credit, and your loan balances could balloon. And there is no guarantee the company will be able to get a settlement, or that the settlement will save you much.
A Department of Education seal doesn’t mean it’s legit.
Scammers use official-looking names, seals and logos, and tell you they have special access to certain repayment plans, new federal loan consolidations, or loan forgiveness programs. If you have federal loans, go to the Department of Education directly at StudentAid.gov.
You have time to check out your options.
To get you to act fast, scammers tell you that you could miss qualifying for repayment plans, loan consolidations, or loan forgiveness programs if you don’t sign up right away. Don’t be rushed into a bad decision.
Some companies will tell you they can lower your monthly payments or interest rate by combining your federal and private student loans. But they might not mention that, if you do, you will lose any benefits and protections offered by your federal loans.
If you think you have become a victim of a scam, report it to us at: bbb.org/Scamtracker
You can also files complaints with:
▪ The Federal Trade Commission at: www.ftc.gov/complaint
▪ Consumer Financial Protection Bureau at: www.consumerfinance.gov/complaint/
▪ California Office of Attorney General at: oag.ca.gov
Action Line is written by Blair Looney, president and CEO for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 4201 W. Shaw Ave., Suite 107, Fresno, CA 93722 or firstname.lastname@example.org.