Student loan debt is at an all-time high, and borrowers are feeling the pain. For some, student loans have stacked up to equal more than a potential mortgage balance on a home. With the amount of financial pressure mounting, it is only natural for some unscrupulous companies to make their way into the fold and attempt to take advantage of vulnerable and desperate borrowers who are looking for a break. With the perfect storm of some companies looking to take advantage of a desperate situation, mixed with borrowers feeling that desperation, there have been some unfortunate outcomes. These circumstances have led some borrowers being deceived into thinking they are receiving help when in reality, they are not.
To protect yourself and your loved ones, be on the lookout for some of these common scams or misconceptions around student loan help that is advertised to you:
- 1. Companies using aggressive marketing tactics. If a company reaches out to you regularly, aggressively or with threats of “losing out”, “missing” your opportunity for debt relief, or something of the sort- be very wary. There is no time-sensitive “act now” type gimmick to student loan debt consolidation, restructuring or forgiveness.
- 2. They want access to your social security number or your FSA ID. Do not give a random company access to your personal information or sign a power of attorney. Your personal information should not be shared for safety and security reasons as well as protecting yourself from others having access to your accounts unnecessarily. You set yourself up for problems and complications by allowing someone else access to your account and makes decisions or act on your behalf. This is especially true because you can create these changes for yourself. Which leads to number 3...
- 3. Companies who claim they have a special relationship with the Department of Education and can get you a better deal than you could otherwise. This is just straight untrue. Federal student loans are not dispersed with “hookups” available to one company or another. The programs they can “get” for you are the same programs you can get for yourself, all without paying fees and divulging personal information to third party companies. To check out what repayment plans and options you have available to you federally, visit studentloans.gov and do some homework (we’re sure you are used to that one by now) on programs available to you. You can even apply through the website and typically get a fairly quick turn around on decisions.
- 4. A company tells you they can get your loan forgiven right away, or with a limited time “special offer” from the government. The federal government has specific loan forgiveness programs that do not vary from company to company. These programs are also not “quick fix” or short term. They take time- a lot of time. If you are in an income-driven repayment plan, there is potential to have your loans forgiven after 20-25 years of successful payments, depending on the program you are in. If you qualify for a public service type of forgiveness, it is possible to be forgiven in 10 years. The government is not wiping your loan clean today because a third party company says they have a special relationship. If you are looking for a loan forgiveness program as a long term option, you can go directly to studentloans.gov to get more info.
While securing a “too good to be true” deal on your student loans is oh-so-tempting and would be a dream come true, it is better safe than sorry when considering your options. Save yourself the heartache and financial woes of falling victim to predatory scams targeting your situation. If you are having trouble repaying your student loans, research and apply for different options or talk to a certified and reputable advisor regarding your scenario. Just like finishing school takes time, hard work and patience so does paying off those resulting student loans.