Paying student loans is enough without being scared enough. As another college year begins, many families are focused on whether to use student loans to pay for some expenses. If done wisely, it can be a useful way to borrow money in anticipation of acquiring skills that will help you land a high paying job down the road.
The problems for many students, however, begin after graduation when they realize the full amount of debt they have earned and are unable to celebrate the business of their dreams.
When they realize the full amount of debt
The payment notice arrives and the student is suddenly faced with a mountain of debt. Then the student loan shark begins to cycle.
These predators are prey on students who may be experiencing financial difficulties for the first time, so they have not done their research on the opportunities that may be available to them. They offer the promise of relief and borrowers jump on the unqualified opportunity to get out of the stress that has been mounting.
Many arrested students pay money for alleged service, only to find out it’s a scam. Not only were they out of the money they paid, but they were still behind on student loans than before. Here are some tips to help you avoid student loan and excellent fraud:
Know the loan officer
There are two types of student loans – federal and private. These are the original entities that lend you money for college. Upon graduation, they appoint a lender to make your payments.
It is best to only work with your credit service provider if you are experiencing some type of payment problem. You need to make sure you are getting the correct answers as they relate to your specific loan.
Look out for forgiving options
You may receive a phone call or see something online or through social media that looks or sounds like a good deal.
It looks official with something “government” or “Obama” in the name and offers a student loan forgiveness, so you are calling to find out more. The person at the other end says they can deduct thousands of dollars from your student loan account, but it will take several hundred dollars to get the paperwork.
They advise you to buy a store or an iTunes gift card for that amount and ask you to read them. This is the point where you should suspect something is wrong.
Contact your credit service provider only to discuss options for forgiveness. In the case of federal student loans, there are some ways to forgive the loan, but you will not be required to pay a fee for the opportunity. There are legitimate organizations that offer negotiation services, but they cannot charge any fees until a real agreement is reached.
Don’t pay for something you can do for yourself
Many scams charge you money to do things you can actually do for free. You can consolidate federal student loans or look for an income-based repayment plan and apply for no fee.
Visit the FSA website or speak directly with your loan servicer to find out more about your options before paying someone else to do this work.
If it sounds too good to be true
This is an old saying, but it still rings true. Be completely suspicious of any offer to completely wipe out student loan debt, as this is difficult to do. If they ask for your Social Security number or FSA ID, you may be on the verge of being robbed or stolen your identity.