Students are facing numerous problems during their study life regarding lectures, exams, deadlines and of course payments. High tuition fees and economic inability lead those students to acquire student loans. Many students want to get those loans to support themselves and repay them annually. Some criminals want to get advantage of those student’s needs. Student loan scams are widely known as one of the dangerous fraud tactics in today’s world. Many students got caught by those scammers and lost money till now. Statistics show that in the United States of America students have more than 1 billion dollar student loan debts. This fact leads those fraudulent people to use student loan scams and take advantage of these students’ economic problems.
Not many people have information about student loan frauds, and that is why they are unable to define whether the ad or incoming emails, calls are scams or not. This issue is critical for them not to get trapped and learn the difference between reliable companies and scammers. In this post, we will state the most common student loans frauds while giving examples from tactics that are used to trap students into this dangerous scam.
Common scams regarding student loans
There are many sides of student loan scams and different types as well. It is hard to define them for the very same reason because many scammers are very consistent with their work and they are looking reliable for even specialists. The standard scam type is the fee scam in advance. In this situation for service, students pay money to scammers to fix something, but they are never doing it after getting the money. Fee scams are very commonly used, and it is an unfortunate situation for students; however, there are other types of scams that more dangerous than this one.
For instance, student loan forgiveness scams are very dangerous and must be avoided by students. In this case, a random company is stating that they can make your payments for student loan discharge and forgiveness programs in less than expected time. To avoid the difficult and long-lasting process by The United States Education Department, many students fall for this trap while trying to fix their issues before the deadline. If students have less time than expected, then the ideal environment for scammers is created in which they are ensuring students to solve their problems.
Using forbearance for scamming
As I mentioned before, they are working in according to a specific plan, which is constructed to use your money and mislead stud nets to think that their problems are solved. Student loan scams are done by using forbearance for your student loans after getting the needed payment from students; that is why you will not be able to detect it right away. In these types of cases, after your forbearance deadline expires, the loan servicing company finding out that the client is not paying its loans while you are not worrying about it because you think that scammer did it right away.
After official reports, students will find out that all they do is robbery while putting your account into forbearance for months, even years. Loan forbearance is a process that should be carefully done only for limited times that is why students’ needs to check their balances, accounts more frequently especially after approaching and using services from this type of scammer companies.
How to deal with them?
Student loans are sensitive issues because if someone misuses your chances of getting one, then students will be in danger of both losing money and their degree as well as they will be left with the massive amount of debts. It is better to get information about the companies that are offering such services because they can be student loan scams. Before making any payment, look up to the web page of the company and see what they are offering. You need to know the services that you will pay them for fixing.
The entire process of student loans is very comprehensive; that is why many students do not want to it by themselves; thus they are searching for such companies. Most likely, they are trying to find the most optimal way of repaying student loans, and they want to find someone who can manage a loan forgiveness option for them.
What to do next?
To avoid these student loan scams, if you do not have information about them, use simple logic and do not pay for anything that has not done accordingly. Check your balance, try to see if any changes have made or not. After confirming that your services did accordingly to the plan, you can give money to those companies but be careful about those scams. If the company is not agreeing on these terms then most probably they will ask you to pay for a third-party account, so after three to six months when all of the results will appear, they can take the money. If not, you can take it from that third party account and this strategy is the best way to complete your needs while not worrying about scammers.
How to define scammers?
Scammers with official names
To make it seem more reliable student loan scams are using names like they are some established company which is working with the Department of education. Association with the Education Department makes the student think that they can work with this scam company and solve their issues; however, it is not. CFPB is working on detecting those scammer companies to avoid further fraudulent acts by those criminals. Students should be careful if they are facing with the company that is arguing that they are working as a sub for official departments of education. Avoid falling into those kinds of traps that are specially created by scammers.
Some red flags commonly used by scammer companies and can be easily detected by students. For instance, you should be careful before asking a company which has national or even federal in their names. URL’s are another way of dealing with these companies because “.gov” is only used by official companies thus do not believe the companies that are using different URL’s
Fake promises regarding loan forgiveness and debt relief
Do not think so those student loan scams that are arguing that they will solve student loan forgiveness issue though they are a private company. Try to avoid this type of private companies because they cannot be legitimate according to the official rules regarding the matter. Another issue is the debt relief which is stated by the scammer company that they would do it instantly. Do not believe in this type of nonsense because instant debt relief is impossible and will not happen any soon. Requirements of student loan programs show exactly that easy debt relief process is not possible and doing it instantly is impossible too because loan services require you to meet some defined criteria for a certain long period. Hopefully, these tips will help you to identify scammers and avoid falling into those traps while trying to get student loan issues done.