Youth Education Series Part IV – Student Loan Scams: Three Red Flags to Avoid
April 9, 2020 by Hunter Swanson
“It was the best of times; it was the worst of times.” A Tale of Two Cities by Charles Dickens.
Times of crisis can bring out the best in people, but also the worst. It’s important to stay on the lookout for possible scams, especially when it comes to student loans.
Promising ads saying “student loan forgiveness” may sound great, be ns. careful! While the government offers more flexible terms for certain borrowers, it won’t wipe out your debt scot-free.
So how do you identify legitimate government loan assistance from scams? Watch for these red flags:
Red Flag 1: Pay to Play
- Never use a company that requires upfront payment for its services
- In many cases it’s actually illegal for businesses to charge to settle your debt
Red Flag 2: Guarantee of Instant Debt Relief
- Instant debt relief is a myth
- The only thing a company can do is help you apply for a Direct Consolidation Loan
Red Flag 3: In-Your-Face Advertising
- Ignore any company that advertises aggressively; it’s likely out for profit
- Aggressive advertising wants to fool you into thinking you need its service
Take care of yourself during these difficult times, physically and financially. Be wary of offers that seem too good to be true. Student loans are a popular target for scammers, so protect yourself and stay aware.
For more information on our Youth Education Series, please check out:
- Part I – Dealing with Student Loans
- Part II – Preparing to Move Out
- Part III – What to Consider When Choosing a Credit Card
BALANCE is an amazing resource for all our members to utilize when taking on life's milestones. With trusted guidance available for free, they are ready to help everyone on the path to financial wellness. This article and many more can be found on their website: balancepro.org.