Student loan scams are hurting borrowers can cost billions every year. Sadly, too many people are falling for these scams. Learn more about these student loan scams here: https://thecollegeinvestor....
In today's video, we're going to talk about the three most common types of student loan forginvness scams, and how you can avoid them.
Remember, you can do almost everything with your Federal loans for free at StudentLoans.gov, or by calling your loan servicer.
You never have to deal with a third-party company if you don't want to, but if you choose to use a third-party for help, here's what you need to know:
- Advanced Fee Scam: You should never pay for up front help. If a company is asking for an up front fee, ask if its going to go into an escrow account and make sure that the company only gets paid when the work is completed.
- Student Loan Consolidation Scam: A big student loan scam involves student loan consolidation. Student loan consolidation can be done quickly in about 20 minutes for free at StudentLoans.gov. If you're paying a third party for help with your loans, you need to make sure that they actually complete the process.
Too often, companies charge a fee, and simply don't do anything and the borrower doesn't realize until it's too late.
- Lawyer and Lawsuit Student Loan Scam: This scam involves a company claiming to be a lawyer who will settle your student loans. Usually, the law firm asks that you stop making payments to your lender, and instead make payments to the law firm.
However, there is never a guarantee that your lender will settle (and it's very, very rare). What typically happens is the borrower ends up even worse in debt, a ruined credit score, and meanwhile the law firm kept the fees.
Based on talking to consumers for several years, these themes have emerged as big red flags to look for:
- Any company that claims to have a relationship with the Department of Education (third-party companies do not have any relationship with the Department of Education)
- Any company that promises you a set payment or forgiveness (companies cannot promise forgiveness or guarantee an income based repayment because both will change based on your income)
- Any promise of immediate loan forgiveness or cancellation
- Any promise that a buyer will buy the loan and settle it for a set amount
- Any promise that because your school closed or is being sued, you an get forgiveness
You can learn more about these student loan scams and more at:https://thecollegeinvestor....
If you want to pay for help with your student loan debt, I recommend Ameritech Financial. You can call them 24 hours a day and talk to them for free: 1-866-863-3870.
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