American college graduates have racked up a combined 1.2+ trillion dollars in student loan debt. The average undergraduate walks away with more than $28,000 in loans. Add to those facts the struggle many graduates have in finding good paying full time work after graduating and it’s easy to see why we have so many people of all ages facing a crisis. The situation can get worse.
Common sense tells us that anytime people are in a crisis and there is a lot of money involved, scam artists will quickly crawl out from under their rocks and begin to prey on those that are desperate for help.
What does a student loan scam look like? Sometimes it can be hard to tell the difference between a scam and a legitimate service. Many student loan relief companies will offer you legitimate services at a high cost. Other companies are complete scams and offer no legitimate services at all. They just want you to give them a big fee upfront and you never hear from them again.
Here are 5 danger signs that you should look out for when seeking help with your student loan debt.
| The Company | The Truth |
| The company wants you to give them your student loan PIN (Personal Identification Number). | A legitimate company will not ask for your PIN number or change your contact and log in information to their own. You always want to be kept informed about the status of your student loans and allowing a company to take you out of the loop is not a good idea. |
| The company claims they can have your debt immediately forgiven or cancelled. | Many debt forgiveness, loan consolidation, and repayment plans are available for federal student loans. If eligible, you can apply for any of these programs online for free. Why would you want to pay someone for something you can do on your own and at no cost?Private student loan servicers have no incentive to forgive all or even part of your student loan. You may be able to refinance your private student loans at a lower rate, but you can do that yourself by contacting your loan servicer directly. |
| The company claims they have a special relationship with the Federal Government or tries to convince you that they are somehow related to the Federal Government. | No company has a special arrangement or is related to the Federal Government. The government doesn’t issue special deals or programs to third party companies. If the company you are talking to claims otherwise, don’t deal with them. |
| The company offers you a service in which you pay the company instead of your student loan servicer. They will often ask you to sign a “third party authorization “or “power of attorney”. | Some companies claim that, if you pay them instead of your loan servicer, they will hold the money until the loan servicer caves in and gives you a deal or forgives the debt. This is a tactic offered by many debt relief companies of all kinds. The tactic doesn’t work and you can find better options by dealing with your loan servicer directly. Meanwhile, you just paid a very large sum of money to a company for nothing in return.Don’t ever give any company the right to act on your behalf before completely understanding the terms and conditions of the service they are offering as well as the reputation of the company itself. |
| The company uses pressure sales tactics to convince you to pay high upfront fees, monthly fees or to agree to their services on the spot. | If someone is trying to make you act immediately or pay a fee up front, you should probably seek help elsewhere. This is true in any financial relationship. When a company turns on the pressure, wants a lot of money, and wants you to agree to something immediately, they don’t want you to have time to think through the deal they are offering you. Situations like that can’t ever be good for you. |
So, what should you do when you are struggling with student loan debt?
The best way for you to avoid being the victim of a student loan scam is to become educated about the legitimate options available to you as well as what to look out for. Knowledge is your best line of defense. Apprisen has a FREE Student Loan Education session that can be a huge help to you. Apprisen will review your student loan repayment options with you while also assessing your bigger personal finance situation. Together, we will chart a path forward. Call 1-800-355-2227 or visit Apprisen online.
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