On the one hand, genuine loan servicers provide free programs such as loan forgiveness, consolidation, student loan forbearance, and deferment. Several con artists are posing as loan service providers to defraud students who have inadequate knowledge of the matter on the other hand. The student loan scam has taken a significant turn, and now the fraud actors have several tactics to rob students of their money.
Many eminent education conferences of 2022, like the Education 2.0 Conference, have shown their concerns about the severity of student loan fraud and what students need to do to escape them. Fraud varies in different ranges, and the students’ quick vulnerability toward paying the loan has played an essential role in encouraging the trickster.
This article and its upcoming sections cover the most common and dangerous student loan fraud that an innocent student might encounter; you’ll also get a guide enlightening you on a few proven methods, as talked by thought leaders in the top education events that took place in 2022, to combat the fraud effortlessly–
Filling Out Forms In Exchange For A Fee
Do you want to reduce your monthly student loan payment to a level your income will allow you to afford? You can pay someone to fill out an application for an income-based repayment plan for you, but you can also do it yourself.
It’s your decision whether or not you want to pay someone to fill out your application; you need to make this decision by keeping in mind that you can do it for free as well, but some companies deceive the students by not informing them of the terms and conditions of the payment plan.
However, it’s crucial to understand that paying to apply for deferment, forbearance, or a different repayment plan is optional to prevent being conned. Borrowers are not required to pay extra fees to request changing loan terms from the federal government or the commercial businesses that service (collect payments on) student loans. The same applies to federal student loan consolidation.
Getting Loan Services For A Fee
Every loan borrower needs to deal with the debt as soon as possible to take a sigh of relief finally. A global education leadership conference like the Education 2.0 Conference discusses the reality behind student loan fraud and how con artists make you fall prey to them.
Don’t believe them if they claim to be able to assist you in getting your student loans erased during bankruptcy. They cannot get your debt forgiven by helping you in a lawsuit against your student loan provider.
Scams in the education sector usually occur by informing the borrower that their loan can be discharged if they willingly pay a specific amount to the company. Or, the swindler can go to a length and ask the borrower to make the loan payments to them instead of the company that provided the loan. In both cases, the borrower loses their money to the predators, and eventually, poor students end up with extra interest and late fees.
Fake Loan Forgiveness Promises
Consider it a red flag if a company approaches you, claiming that they have inside strings that can help you erase your loan for good! According to the 2022’s top education conferences, scammers come up with tricks like Biden loan forgiveness or a pandemic grant to loot the students of their money.
Stay skeptical if someone forces or convinces you to provide your personal information, including bank account details, social security number, etc. A con artist can tell you that you need to take immediate action before a federal program closes or membership is limited. Do not accept whatever they are willing to offer.
Requesting Personal Information
If you are dealing with a legitimate education loan provider, then be aware that they have nothing to do with your personal details, such as your SSN, bank account details, date of birth, FSA ID number, and password.
The fraudsters try to manipulate you by asking you to confirm the information; it sounds like a legit request, but it is not. If you find yourself trapped in such a situation, immediately hang up the phone or disengage with them without worrying about what the other party might think of your rude behavior.
But how do you distinguish between a legitimate and fake financial support provider? Thanks to the top education events of 2022 for covering such vital matters as a part of their in-person summit. Experts suggest that if you receive a call that seems legit, but you are not sure of it, do not entertain them if they ask for a credential you are not comfortable sharing. Ask for a favor from your student loan provider to confirm whether the email, letter, or phone call you received was genuine or fake.
What worst could happen if someone with malicious intent defrauds you?
- Identity fraud
- Alteration of your student loan account without authorization.
- Loss to your credit score.
- Too many hours were lost clearing up the debris.
Pro Tips:- Avoid companies that approach you or appear in search engine ads to avoid student loan scams. Even if you receive a letter or a call from a person claiming to be knowledgeable about your student loan information, such as how much you owe, it may be a hoax. Avoid any business that demands that you act immediately.
Before you have a chance to take a step back and consider the matter objectively to see whether it is a good decision, they are attempting to get your money. Refuse their intense pressure and firmly reply, “No, thanks.”
The Bottom Line
Borrowers of student loans are the frequent and lucrative target of fraudsters but remember one thing no additional amount should be required from you to clear your loans. Do not give companies any money or trust their claims that they can lower or erase your student loan debt. Never respond if someone requests personal information that seems to be coming from lenders of student loans.
Applications for income-driven repayment, consolidation, deferment, and forbearance are made available by the Department of Education for free. It also processes them and offers free help with the paperwork. Fortunately, the 2022 calendar is filled with enlightening education conferences and summits like the Education 2.0 Conference to increase awareness amongst students regarding the prevalent in the education sector.
