RICHMOND, Va. (WRIC) – This time of year, future college graduates are preparing for life after college – and getting ready for the student loan repayment process. However, the Better Business Bureau (BBB) warns against scammers trying to take advantage of recent changes to student loan repayment programs to confuse borrowers.
Currently, payments are suspended on virtually all federal student loans through August 31, 2022. BBB said, “Just because student loan repayment is on hold doesn’t mean the scams are. The Better Business Bureau encourages graduates to carefully research reputable sources related to federal reimbursement plans before providing personal information.
The warning includes monitoring companies that promise to reduce their debt by reducing payments by enrolling in student loan forgiveness programs or other programs. Scammers may also falsely promise to apply monthly payments to consumer student loans to improve credit scores.
The BBB said the scammers suggest that 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 money by consolidating loans – if a small fee is paid.
Protect yourself from student loan scammers:
- Find the lender: Visit BBB.org to read company profiles and review companies before working with them. The FTC offers consumer education on student debt relief scams at ftc.gov/StudentLoans.
- Report it: If you’ve been the victim of a suspected scam, report it at BBB.org/ScamTracker.
- Empty promises lead to an empty wallet and more debt: Only scammers promise quick loan forgiveness. Scammers often pretend to be affiliated with the government. Never pay a fee up front for help. Never share sensitive information, such as your FSA ID.
- Find a reliable source: Consumers may apply for loan deferral, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education or their loan agent at no cost, and do not have no need for a third party.