How to Spot and Avoid Student Loan Scams

Student Loan Consolidation

student loans

There’s an epidemic happening in America today. Millions of people across the country collectively owe more than $1.5 trillion worth of student debt. It’s not just a simple car loan being paid off. No, companies are destroying the lives of people who can’t pay back their student loans and are desperate for help.

These graduates earned their degree, but have lost their license to work. The lenders have all sorts of tools in their back pocket to get the money owed to them. Not only can they revoke your service license, but they can also garnish wages, take your tax refund, and so much more. There’s nothing anyone can do, except hold on and wait for the government to help.

In some small ways, they have. The Obama administration instituted student loan forgiveness programs, but it’s not broad enough. There are other ways to pay back student loans and lower monthly payments. The problem is, whom can you trust? As with any industry, there are many scammers out there looking to take advantage of desperate students.

Financial Helpers is an example of a company who simply wants to help students by providing information and seeing if you qualify for various programs. To learn more about Financial Helpers and how we can help you with your student loans, call us at:

Call Now 844-332-2079

Student Loans and Common Scams

Scams are becoming common in the world of student loans. It’s so prevalent that the Consumer Financier Protection Bureau has recently put out several warnings. They want to protect borrowers from scam artists promising to help them get rid of their student loans. They have no real goal of helping anyone but themselves.

Still, there are legitimate companies out there who will help you. The trick is to know the difference between a scam and a real company looking to help students. This article will help you determine what is right and what to avoid. Here are a few of them for you to decide for yourself:

Is It Too Good to Be True?

One way to tell the difference between legitimate companies and scam artists are the ways they deal with customers. A high-pressure sales tactic isn’t necessarily a sign of concern. These companies will most likely charge a fee, but there are red flags. If they immediately guarantee they’ll get your loan forgiven, then they’re probably scamming you.

Another line is saying you’re ‘pre-qualified’ to lower your loan. The reality is, no company can know if you’re pre-qualified for loan forgiveness. They’ll have to personally take a look at your loan and weigh it against the current laws and regulations. Whatever step you choose will require a credit check (for refinancing) and look at your financial information.

They Try to Force You onto a Plan

The right company will do its best to help you where you’re at and within your budget. It’s ultimately your decision what plan works for you. The scamming company will tell you to sign on today because offers will expire soon or push you into a deal that doesn’t make sense.

Examples of this are companies that say you’ll go to jail if you don’t pay your loans. There are plenty of bad consequences for defaulting on your student loan. The government may even take you to court, but they won’t just throw you into jail. The scam artist will put on the pressure to make you think your livelihood is in jeopardy unless you take care of it today.

Law Firm Scams

This scam is mostly based on advertisements that promise to settle your debts. They pretend to be lawyers working for a law firm. Some of them might be real lawyers, but the way they deal with people is criminal. They make many promises to the borrower they often don’t keep.

To get you in the door, they promise to settle your debt for less than you owe. It sounds like a great deal! They’ll even tell you to make full payment to the firm. Except, they don’t do anything. They sit on it until your loan goes into default. At that point, it’s too late.

Debt Elimination

The only way you can have your debt canceled is through legitimate and qualifying reasons. You owe money to the federal government, and that money you must return. You can refinance and consolidate, but not have it completely wiped out. A scammer might try to get someone by saying, “The President signed an executive order to forgive all student debt!” It’s not true.

No one but the government can forgive what you owe. Situations like death, disability, service work, and identity theft are handled through the proper channels. If you pay for a company’s help, they may represent you, but they cannot eliminate your debt

The best advice is to do your research before choosing a company. Don’t get caught up in the promises designed to feed on your desperation. The federal government does try to help, but there are many hoops to jump through to qualify. Find the legitimate companies who excel at assisting borrowers in getting out from under their burden of debt.

Last modified: January 14, 2019