6 ways to spot student loan forgiveness scams
In recent months, there has been a lot of talk about student loan relief. Student loan payments held by the federal government are on hold due to COVID. Some private lenders also offer forbearance and lower monthly payments.
Unfortunately, crooks masquerading as legitimate lenders can take advantage of the hardships caused by the coronavirus pandemic by offering to repay or at least repay your student loans. All you need to do is pay an upfront fee and provide some personal information. It’s too good to be true? It probably is.
If you are looking for immediate relief on your student loan, Credible can help. Credible can be useful in comparing student loan refinance rates from several lenders without affecting your credit score.
But be diligent and do your homework before choosing your best option. Learn how to spot these 6 student loan forgiveness scams.
STUDENT LOAN REFINANCING RATES HAVE NEVER BEEN LOWER.
6 “too good to be true” scams that are just that
1. You are charged a fee. Participation in student loan forgiveness programs is free. It is illegal for debt relief service providers to ask for money – up front or monthly – to settle or reduce a loan before the service is performed.
2. Not a DOE provider. There is a shortlist of debt service providers that work with the Department of Education (DOE) – like Navient, Great Lakes Educational Loan Services, and FedLoan Servicing. If you are unsure whether a business is legitimate, contact your loan manager.
3. You feel compelled to register. It’s not uncommon for crooks to ask for an immediate response to an offer. If a caller is pressing you for information you are reluctant to give, ask for their number so you can do your research before calling back.
4. Immediate repayment of the loan. The repayment of student loans can take 10 to 20 years. A company that says it can offer immediate discharge on your loans is misleading you and is probably a con artist.
5. Provide personal information. Legitimate businesses never ask for personal information over the phone, email, or text. If you’re asked for information like your federal loan ID number and PIN, or Social Security number, log into your student loan website or call your loan provider first.
6. Consolidation of your loans. Some crooks present offers to lower your monthly payments by consolidating your loans. But they charge a high fee for doing this. It’s rare to pay fees to consolidate your student loans, so beware.
If you spot a scam, report it to the FTC at ftc.gov/complaint.
HOW DID THE SUBMISSION ADMINISTRATION HELP STUDENT LOAN BORROWERS?
How to get private student loan relief
Many private student loan managers continue to help borrowers due to the hardships caused by COVID-19. However, keep in mind that during abstention, interest still accrues, which will become payable once the abstention ends.
Explore your options for refinancing your student loans. Refinancing can extend your loan term and lower your monthly payments. To see how much, visit Credible to explore your refinancing options and consult with verified lenders.
For an indefinite period, student borrowers affected by COVID can request forbearance from certain lenders.
Check with your bank to see if they offer student loan forbearance. Several lenders have programs in place for students hard hit by COVID. Not sure about your options? You can use Credible to compare student loan refinance rates from several lenders at once without affecting your credit score.
WILL PRIVATE STUDENT LOANS BE FORGOTTEN? 3 WAYS FOR BORROWERS TO MANAGE THEIR DEBT NOW.
Federal student loan relief
- 0% interest on all US Department of Education student loans through FedLoan Servicing.
- Suspension of payments, at least temporarily until September 30, 2021.
- Automatic suspension of direct deposit payments.
- Payments made from March 13, 2020 to September 30, 2021 may be refunded.
- Income Based Repayment (IDR) and Public Service Loan Remission (PSLF) will receive a credit towards the PSLF if you work for an eligible employer during the loan suspension period.
WHO BENEFITS FROM STUDENT LOAN FORGIVENESS?
Is It A Good Idea To Refinance Federal Student Loans?
Refinancing your private student loans can lower your interest rate and lower monthly payments. If money is limited, mainly due to the pandemic, you may want to consider this option. Use an online tool like Credible to get prequalified student loan refinance rates without affecting your credit score. And use an online student loan refinance calculator to get a feel for what their new monthly payments might be.
While lower monthly payments are too good a benefit to pass up, refinancing a federal student loan from a private lender means you can no longer take advantage of the suspension of payments or the temporary interest rate of 0. % until September 30, 2021 on federal loans. .
If you have any questions regarding your student loan refinancing, visit Credible to connect with experienced loan officers and get your student loan refinancing questions answered.
DO I NEED TO REFINE MY FEDERAL STUDENT LOANS?
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