Looking for a student loan? Looking to consolidate student loans? Looking for help? Peruse the internet; there are thousands of firms ready to give you money. Watch out.
Here are three student loan scams to watch out for:
1) Advance Fee Plan: These guys will tell you they’ll get you the highest amount at the lowest rate. They charge you up front to get the paperwork started, and you do the paperwork. They collect their money and you’re left holding the bag; Student Loan Scam Alert. Deal only with reputable, preferably Federal funding agencies. Go to your financial aid office and check out anyone who has approached you as a student needing funds, and ask for help identifying reputable sources of student loans. Watch out; protect yourself.
2) Student Loan Bill Consolidation plans: While there are reputable companies out there, you are more likely than not to run up against an “agency” that is less than reputable, and how are you to know? The bottom line is that, reputable or not, they are in business to make money, and you’re already in debt. Remember student loans are not forgivable; they get paid no matter what, even if you file for bankruptcy (God forbid). You can apply for loans yourself, and your student aid officer will help – at no cost. Extricate yourself from any on-line, or friend-recommended, or “low-interest, time-sensitive, one-time-only-student special”. They’re just not worth it. If it sounds too good to be true, it is. Watch out for these student loan scams who prey on recent graduates. Or you can go to the Department of Education Website for help.
Loanconsolidation.ed.gov will do the same thing for free. They offer steps and guidelines that show you how to get help, without paying a fee. You can do exactly what these agencies are doing and charging you, sometimes thousands of dollars, to do. You don’t need to pay to get help.
3) Debt Elimination Plans: If you are approached by someone who says they can eliminate your student loan debt – run, don’t walk away from this scam artist. The only way student loans can be eliminated is by you paying them off. This scammers will charge you a huge fee, call it a “processing fee” or an “administrative fee”, and take your money and your PIN number (to get into the account, you see), then disappear. Any time you are asked to pay a fee to get rid of a fee? No. You’re better off giving that fee to pay down your own debit. It’s not going anywhere, and now the scammers has your PIN number, which gives him access to all your personal information. Just say no. Call your parents, consult with a professor, go to financial aid, go to your bank, explore all alternatives. You will find something that’s right for you, and you won’t have to spend money to get it.
There are hundreds if not thousands of scam artists waiting to prey on financially naive students who just want to get to work and get this monkey off their back. Don’t be one of them. Do your due diligence. Watch out for student loan scams.