Student Loan Scams: How You Can Keep Your Wallet Safe

Student Loan Scams: How You Can Keep Your Wallet Safe

( – Many people take out student loans to pay for higher education. While some young adults only owe a few thousand dollars, others are drowning in tens of thousands of dollars of debt. Overall, the United States has over 43.2 million student borrowers with an average of $39,351 of debt per person. Not surprisingly, there are plenty of scammers trying to swindle students who feel overwhelmed with the amount of debt they face.

How Scammers Target Student Loan Borrowers

Most borrowers have multiple student loans from multiple places, either private foundations or the federal government. Sorting through the different loans can be difficult, and often scammers try and take advantage of this confusion to their benefit.

Bad actors often advertise online to young adults who search for information about student debt online or send emails and traditional mail right to your door. This way, these illegitimate companies sneak into borrowers’ lives, prepared to rip them off before they even know what’s happening.

Usually, scammers ask students to pay for assistance with loan repayment or promise fast loan forgiveness for a small fee. But, quick loan forgiveness is not a real thing, and there’s nothing a random company can provide that your own loan service provider cannot give you.

Tips For Keeping Your Identity and Loans Safe

While the prospect of student loan scams is frightening, there are plenty of ways to stay ahead of hackers.

Banks, loan offices, and even the federal government use different servicers to communicate with borrowers about their loans. So, the borrower should begin by identifying each company they owes money to and only communicate with those organizations.

Additionally, scammers are likely trying to obtain personal information to steal an identity. Never provide a company with a username, often called an FSA ID, or the password for a student loan. There’s no reason any legitimate company would need that information to assist you in the loan repayment process. If a scammer does get a hold of a borrowers’ personal information they can easily funnel the money into their own account and turn off notifications, so the borrower doesn’t know how quickly they’re losing money.

If it Sounds Too Good to Be True…

If anyone feels too pushy or uses unrelenting sales techniques on the phone or in written correspondence, they’re likely trying to run a scam. No reputable business should pressure a borrower into making an immediate decision. So, if any communication ever feels unsafe, immediately contact the lender directly to get more information about the situation.

If you’re a student borrower, only by understanding the risks of student loan scammers can you ensure your investments are safe. If you suspect a criminal has successfully scammed you, it’s essential to contact your state attorney general as soon as possible to begin an investigation. Taking action may save others from falling victim to scammers.

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