Beware of Student Loan Scams

Calls offering help for an upfront fee a red flag, says Jill on Money

Tom Puckett
July 15, 2019 - 4:00 am

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Buffalo, NY (WBEN) You're thousands of dollars in debt because of your student loans, suddenly you get a phone call offering you a chance to either consolidate or eliminate your debt. Before you call back, experts have this warning.

"If you have $30,000 in student loans, that's going to catch your attention," says Jill Schlesinger of Jill on Money. "When you call back, they're going to immediately ask you for your credit card information, write a check, and what's important to know, paying an upfront fee is illegal. That's your biggest red flag. You can do that directly with the government."

Schlesinger says they're trying to wrangle your student ID number. "Once they have your ID number, they can go into the federal system, change some things but also contact you again and say we see your loan number is this, and now you should pay us to see if we can make this better," warns Schlesinger. She says if you become a scam victim, you have make a lot of calls, including to the FTC complaint line, the Consumer Financial Protection Bureau, the Department of Education, and you must get into the federal system and change your ID number.

She says go to the federal student aid website to change the terms of your loan. 

Jeff Boron says those who fall for the scam usually end up out $1,000 they don't have, but that's not all. "They've got federal loans but consolidated them outside of the federal program only to learn they could have been eligible for loan forgiveness programs because they taught in impoverished areas and that opportunity is not there anymore," says Boron.

Instead, he suggests going through legitimate channels. "There are a couple of good organizations that will help you shop loans. You have to look at the bottom line, not just the rate," says Boron of the Financial Guys. They include Common Bond, SoFi, and Credible.

Boron sees a bigger frustration. "I see families digging themselves into a hole, and the reason they become victims is they are looking for a silver bullet. They should have never dug themselves into that deep a hole, They should have planned better upfront.

 

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