The phone rings and the robocaller on the other end tells you just what you want to hear: Your student loans could qualify you for a debt forgiveness program and to take advantage, call this number back right away for the details.
Struggling to make the repayment on your thousands of dollars of loans, this could be just the break you need, you think.
More than likely, it's a scam.
The U.S. Department of Education (ED) reports that student loan borrowers are receiving letters, emails, calls or text messages offering student loan relief and promising things to wipe out your loans. You call back and learn that for a fee, the company will assist in reducing your outstanding loan to almost nothing.
The ED said you never need to pay anyone to assist with your student loan repayment plans if you're struggling and that such callers typically are fraudsters.
"Here's what you should know: there's nothing a student loan debt relief company can do for you that you can't do yourself for free," the department posted on its website."
The scams are becoming even more prevalent as the 2020 election season is upon us. With candidates including Sens. Elizabeth Warren and Bernie Sanders touting proposals to eliminate student loan debt, scammers apparently are making pitches that play off of current news events.
What are some of the signs of a scam?
- Being asked to pay an up-front fee
- Being asked to divulge your Federal Student Aid (FSA) identification user name and password
- Being told you can't lower your payments without assistance
- Receiving a promise of speedy forgiveness of a loan.
- Mentions of an Obama student loan forgiveness program. No such program exists
If you are considering turning over a fee to someone who offers to assist you with student loans, don't. The ED can assist you at no charge.
If your student loan debt is causing other financial issues and putting you into debt in other areas, you may want to contact an attorney to see if bankruptcy might be your best option.