RICHMOND, Va. (WRIC) — This time of year, soon-to-be college graduates are gearing for life after university — and readying themselves for the student loan repayment process. However, the Better Business Bureau (BBB) are warning of scammers attempting to take advantage of recent changes to student loan repayment programs in order to confuse borrowers.
Currently, payments are paused on virtually all federal student loans through August 31, 2022. BBB said, “just because student loan repayment is on pause, doesn’t mean that scams are. Better Business Bureau encourages graduates to carefully research trustworthy sources related to federal repayment plans before giving any personal information.”
The warning includes watching out for companies promising to reduce debt by lowering payments through enrollment in student loan forgiveness or other programs. The scammers may also falsely promise to apply monthly payments to consumers’ student loans to improve credit scores.
The BBB said, the scammers suggest all you have to do is pay a small fee so they can negotiate with the lender on your behalf. In another version, dishonest collectors claim they can save money by consolidating loans — if a minimal fee is paid.
Protect yourself from student loan scammers:
- Research the lender: Visit BBB.org to read business profiles and check out companies before working with them. The FTC has consumer education related to student loan debt relief scams at ftc.gov/StudentLoans.
- Report it: If you have been a victim of a suspected scam, report it at BBB.org/ScamTracker.
- Empty promises lead to an empty wallet and more debt: Only scammers promise fast loan forgiveness. Scammers often pretend to be affiliated with the government. Never pay a fee upfront for help. Never share sensitive information, such as your FSA ID.
- Find a reliable source: Consumers can apply for loan deferments, forbearance, repayment and forgiveness or discharge programs directly through the U.S. Department of Education or their loan servicer at no cost, and do not require a third party.