College grads are prime targets for student loan scams
Recent college graduates may be enjoying life after school, but soon they will be required to start paying off their student loans. Taking advantage of the transition, scammers are looking to make quick money with empty promises of student loan forgiveness.
"There's a lot of different scammers out there that will try to help students in creating debt consolidation," marketplace manager of Alaska Sheron Patrick with the Better Business Bureau Northwest + Pacific said. "Or directing them in ways to get rid of their debt and they will end up most likely taking the fees and then bouncing out of there."
Here are some of the red flags to watch out for:
• Any student loan debt company calling or seeking you out
• Asking for money up front
• Generic emails/texts/phone calls, also known as click bait
• Offers too good to be true
• Reducing loans to pennies on the dollar
Patrick says that if the offer sounds too good to be true, it probably isn't. The Alaska Commission on Postsecondary Education agrees and says the information scammers say they can give you with the upfront fee is information the students have access to already.
"A lot of student loan debt resolution agencies are a scam," ACPE director of outreach & early awareness Rebekah Matrosova said. "Or even if it's not a scam, they will charge you fees that you don't have to pay because none of those agencies can access any type of service or any type of option that you can't access on your own working with your lender."
Matrosova says that students looking at outside agencies shouldn't be charged a fee. Students should also be wary of anyone asking them to sign a power of attorney to help them resolve their loans.
"The number one advice that we actually have for students who are struggling with loan payments is to stay in touch with their lender and communicate with their lender," Matrosova said.
Experts say students should do that before going into default. Federal loans offer lots of options including, income-based repayment plans, deferment and forbearance. State and private lenders also offer hardship options to consider.
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