During the height of the pandemic, the Federal government put a hold on student loan repayments. After the Biden administration tried to erase a significant portion of that debt with limited success, scams increased. Here’s how to protect yourself.
Any company that calls out of the blue with promises that they can erase debt immediately is a red flag. There are programs that the government has in place to eliminate debt, but reaching qualifying status takes years. Eliminating student loan debt simply isn’t that easy.
As with many finance-based scams, anyone asking for money upfront to handle a service, in this case, eliminating student loans, is more than likely a scam. These offers typically come in the guise of loan consolidation or forgiveness. The borrower can handle both directly on the Federal Student Aid website.
Scammers often use aggressive and fear-mongering language to lure borrowers into a sense of panic. With many people unable to make their high loan payments, messaging that suggests borrowers to “act immediately” or warn that “your loan has been flagged” can cause people to respond and fall into a scammer’s web.
The stress of having to pay back student loans can be hard, and those seeking to benefit from that stress are out in full force. Being mindful of information coming in is critical to avoiding student loan scams.