What Tactics Do Scammers Use
A scammer might offer to help you consolidate your loans, pause your payments, or change your repayment plan for an upfront fee. You can access this help yourself for free by contacting your servicer.
Scammers might not even ask for money and instead are after your personal information, such as your social security number, Federal Student Aid password, or bank routing info.
Be careful, as these calls and emails can often appear legitimate. Scammers could use titles that sound legitimate, agent numbers, and in some cases might have details on the amount of student loan debt you have. Even if someone knows how much money you owe, don’t automatically trust that they’re legitimate they may have obtained the information illegally.
They might add urgency to their ask, telling you that their program is first-come, first-served. This doesn’t apply to federal forgiveness programs.
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Would Student Loan Forgiveness Include Private Loans
Borrowers on income-driven repayment plans will benefit most
The loans that are eligible for tax-free forgiveness include all federal student loans, federal parent loans, state education loan programs, loans provided by a college or university, private student loans and private parent loans. 2
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Why Do I Keep Getting Calls From Student Loan Assistance Companies
Question:
Answer:
Dear Liz,
Student loans are broken on so many levels. But let me first explain why you are getting these solicitation calls. And the answer is simple. They are trying to make a sale and get money out of you.
An exploding industry of debt relief companies, many who used to sell debt settlement services, think selling student loan assistance programs is the new fountain of gold. They will sell the hell out of these programs all day and all night, for an advanced fee and monthly payments for the next twenty years. It’s a scam so many people with student loan debt are falling for and sadly it’s one I’ve warned readers about for years. See Student Loan Assistance Rescue Scams On the Rise – Buyer Beware.
Just yesterday I saw a case where a woman was sold an income contingent repayment solution by one of these companies. The problem is she did not qualify for the promised low payment. So they enrolled her, without her awareness, into a graduated payment program. The kicker is the original sales pitch was that her student loans would be forgiven in ten years with low monthly payments. The reality is her student loans will be paid off in ten years under the program they enrolled her in. And her payment will rise.
And then there is the sales pitch most of these companies put forward that they can reduce your monthly payment. But what they don’t seem to tell people is why that can be a horrible idea and an expensive trap. Read this for details.
What To Do If You Are The Victim Of A Student Loan Forgiveness Call Scam
Student loan scams are common, and it can be easy to fall for them. If you find yourself the victim of a scamming or phishing attempt, here are a few steps you can take to get help:
- Let your student lender, bank and credit card company know right away. That way they can flag any questionable communications or purchases if they happen.
- Report the call to an agency that protects consumers against these types of scams. Examples include the Consumer Financial Protection Bureau, the Federal Trade Commission and the state attorney generals office.
- Keep an eye on your credit report for suspicious activity.
- Change your passwords, especially those that protect sensitive financial information.
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Is There Any Company You Can Trust To Help You
Even though Ive said countless times you can do it for free at StudentAid.gov, there are still people whove asked me thats great Robert, but I still want to pay someone to help me who can I trust? Thats a fair question, so who can you trust?
Next, call your student loan servicing company. I know this sounds counter-intuitive, but 80% of issues and concerns can be resolved by simply calling your loan servicer. These free options are usually your best bet for help with student loans.
If you’re still not quite sure where to start or what to do, consider using talking to a financial planner that specializes in student loan debt. A real financial planner with have a CFP or similar designation, AND they will have a fiduciary duty to you. We recommend the Student Loan Planner. Check out our Student Loan Planner review here.
Object To Wage Garnishment Through A Hearing
You have the right to request a hearing from the Department of Education if your debt consists of student loans. This delays wage garnishment and may even stop it if:
- You have not defaulted on your loans and there was a mistake.
- Garnishment would leave you with extreme financial hardship.
- If you were laid off after being in a position for less than a year.
- You recently filed for bankruptcy.
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What To Do If You Think Youve Been A Victim Of A Student Loan Relief Scam
The first thing you need to do if you think youve fallen for one of these scams is to contact your bank or your credit card company to stop any payments going toward that company. Latreille also says to keep an eye on your credit report to see if theres some unusual activity. If there is, contact the places where those transactions took place to dispute them immediately, so it doesnt damage your credit.
Then, the next step is to contact your federal student loan servicer to explain what happened, as they usually have procedures in place to help borrowers in these situations.
A lot of people feel ashamed or embarrassed,” Mayotte says. “They don’t want to report it because they feel like it makes them look like they weren’t that smart, and that’s not the case at all.
If you signed a power of attorney, make sure you tell your servicer, bank and credit card company about this, so they can have it revoked immediately.
Once youve done all of that, you should also report the incident to the Federal Trade Commission, the CFPB or your district attorney, so they can look into it and hopefully prevent this company from scamming other consumers.
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Are There Any Legit Student Loan Forgiveness Program
There are legitimate government programs, such as Public Service Loan Forgiveness, that can reduce or eliminate federal student loans after a certain amount of time. Borrowers on income-driven repayment plans can get their remaining loans forgiven after they make payments for 20 or 25 years, depending on the plan.
Student Loan Forgiveness Programs
Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any timeâfor free. Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan.
There are legitimate student loan forgiveness programs for federal student loans. Public Service Loan Forgiveness is a federal program available to government and certain nonprofit employees. If youâre eligible, your remaining loan balance could be forgiven tax-free after you make 120 qualifying loan payments. This program is not available for those who have private loans.
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Total And Permanent Disability Discharge
You can qualify for a Total and Permanent Disability Discharge of your federal student loan debt if you’re 100% disabled.
You have three options to prove that you are totally and permanently disabled:
Nelnet is the loan servicer responsible for administering the TPD process. You can apply for a TPD discharge at disability discharge.com.
How To Avoid Covid
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Student loan borrowers were targets for scams before the coronavirus pandemic hit. The longer people struggle, the more desperate they become, and thats when scammers and fraudsters thrive.
Theyre using the same playbook, but more aggressively, says Seth Frotman, executive director of the Student Borrower Protection Center, a Washington, D.C.-based nonprofit.
Theres no single scam related to coronavirus relief or specific company to pinpoint that is being prosecuted right now, says Leslie Tayne, a debt-relief attorney and founder of Tayne Law Group. But fraudsters are still out there.
There are two main types of scams, says Frotman. In one scam, a company will charge to enroll you in a benefit you could have accessed for free, such as a federal income-driven repayment plan.
Tayne says she most often sees scammers promising to get borrowers into a loan deferment program in exchange for payment.
In another scam, youre promised something too good to be true like forgiveness in exchange for payment. Then they take your money and run.
Borrowers should always look upon advertising that is promising forgiveness with skepticism, says Yu.
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Student Loan Forgiveness For Doctors And Nurses In Canada
Eligible family doctors, residents in family medicine, nurse practitioners, and nurses can get Canada Student Loan forgiveness through the federal government. However, only the federal portion of the loan can be forgiven .
Eligibility For Student Loan Forgiveness For Doctors and Nurses in Canada
To qualify for this type of Canada Student Loan forgiveness, you must:
- Have a Canada Student Loan thats in good financial standing
- Be working as an eligible medical professional in an under-served or remote region with a lack of proper healthcare .
- Have been employed for at least one consecutive year in an underserved or remote community and provided at least 400 hours of in-person service.
- Submit an this application
Eligible Medical Professionals
To qualify for Canada Student Loan forgiveness, you must be one of the following medical professionals :
- Family
- Nurse Practitioner
- Family Medical Resident
You may get Canada Student Loan forgiveness for nurses and family doctors and if you are:
- Enrolled in full-time studies
- Repaying a student loan
- In your non-repayment period
If your loan is in its repayment period, your monthly payments are still mandatory. That said, youre allowed to work as an eligible medical professional in more than one remote or under-served community and with multiple employers if you perform at least 400 in-person hours over a maximum period of 12-months.
Check out what happens to your student debt when you die.
Do Federal Student Loans Call You
Federal student loans will only call you in an emergency situation, and that too from an authorized number. If for any reason, you do not receive a call from an authorized number, you should instantly be on your guard.
Stay up with the latest so your advance servicer can assist you with remaining on target with reimbursing your credits. In the event that your conditions change whenever during your reimbursement period, your advance servicer will have the option to help.
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The Caller Creates A Sense Of Urgency
Betsy Mayotte, president and founder of The Institute of Student Loan Advisors , says that although scam scripts may vary, one thing they all have in common is that they try to rush borrowers into signing up for their services.
They use talking points to create a sense of urgency, like its on a first come, first serve basis, Mayotte says. The tactic pressures borrowers to act quickly and also stops them from researching the company’s services.
Heres an example from a voicemail left by one of the scammers to a Reddit user:
Weve been trying to reach you because youre eligible for the federal student loan forgiveness program due to the changes made in 2020. Its imperative that I speak with you as soon as possible since the student loan payment delay is about to come to an end
In this case, the scammer uses phrases, like imperative and as soon as possible, plus referencing the current federal student loan payment suspension, as the hook to get the borrower to act fast and not miss out on this opportunity.
Student Loan Scam Tactic #: They Want You To Give Them Power Of Attorney
Some scammers will even ask you to sign a third-party authorization form or to give them power of attorney. By agreeing, you may accidentally authorize them to speak with your student loan servicer, make decisions on your behalf and change your student loan information without your knowledge.
No legitimate company will ever call or email you unprompted to ask you to sign away your power of attorney. If you receive a call like this, hang up immediately, and if you believe you may have accidentally given away sensitive information, be sure to let your lender know right away.
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How To Verify The Legitimacy Of Calls
More than likely, the calls Ive been receiving are a scam. CNBC reported in June that student loan forgiveness scams were on the rise. Coincidentally, this is also right around the time I began getting the calls.
Oftentimes, these scams claim to be able to provide reduced payments . During the call, youll be asked for your loan ID number. With that, the person on the other end can change your mailing address. This will make it difficult for your loan servicer to contact you about your missed payments.
After youve gone months without paying, your loans will fall into default. At that point, youve fallen victim to a scam that will be extremely difficult to dig yourself out of. Here are a few ways you can spot a student loan scam fast.
Find Out How To Appeal
When you receive notice from the Department of Education that they plan to garnish your wages, first verify that the information is correct and that you’ve received a legit notice. The notice should explain when garnishment will begin and how you can appeal the garnishment.
If you can afford it, you might want consider getting help from an attorney who specializes in student loan debt. While you don’t necessarily need an attorney, a lawyer can help you better navigate your options.
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Your Personal Information Is Yours To Protect
More often than not, scam callers will be looking to extort your personal information rather than your money. Getting a hold of your banking information, for example, allows scammers to pull off large-scale frauds, such as identity theft.
That is why you should always refuse to provide an unknown caller with your personal information, no matter how persuasive they may be.
Why Scammers Are Targeting People With Student Loan Debt
When someone calls with information about reducing your student loan debt, you assume they have access to your records. After all, they already know about your debt. Except that they really dont. Its just an educated guess based on the growing school loan debt crisis happening in this country.
About 69% of students who graduated from college in 2018 had student loan debt. The average debt per student was $29,800 for graduates of public four-year schools and $32,600 for graduates of private nonprofit four-year schools. These graduates are responsible for an average payment of between $200 and $300 every month.
The problem isnt just with young graduates. While millennials account for the largest portion of student debt, the number of people aged 60 and older taking out loans is also growing. These loans include those obtained for the applicant and for their children and grandchildren.
So, throwing robocalls and scam calls out there at random isnt as crazy as it seems. The odds of reaching a household with someone who has student debt are high. These unwanted calls are also growing in number, making it even more frustrating to the people who get them. There are strict rules about the use of robocalls but little enforcement to ensure they are followed. Add to that the ability of a single robocaller to make millions of robocalls in a months time and you can see how distressing and widespread the problem truly is.
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