BBB warns of student loan scams and offers advice to consumers with college debt
For millions of college students in the U.S., student loans can feel like a huge financial burden. In 2015, the average college student graduated with approximately $33,000 in student loan debt. The average student in Georgia and South Carolina graduates with more than $26,000 in student debt from federal and private loans, according to the Institute for College Access & Success.
Unfortunately, because student loan debt is so common, scammers use this as an opportunity to take advantage of current students and graduates. The scam starts as a phone call, email or letter to the student that claims their company can alleviate all student loan debt for a fee. They also claim to have helped other student loan holders; however, student loans can only be forgiven under very specific circumstances, which aren’t fast or easy. Instead of helping, they take your fee and disappear.
Summer is an especially busy season for this type of scam, and BBB sees a spike in reports. Scammers are targeting students right now because many have recently graduated or are trying to secure funding in time for the fall semester.
In another version of this scam, scammers claim that they can save you money by combining your loans. Others may move your loans to a private lender with a higher interest rate. Remember, if it sounds too good to be true, it probably is.
According to Debt.org, over 40 million Americans owe more than $1.2 trillion in outstanding student loan debt. There are three primary ways to alleviate student loan debt, and it depends upon:
In the last year, BBB Scam Tracker has received 180 reports of student loan related scams nationwide. BBB has also received reports of scammers calling people and saying they owe thousands of dollars in unpaid student loans. Former students have also been threatened with bad credit, lawsuits and even arrest if they don’t pay immediately.
Better Business Bureau advises student loan holders to look out for red flags and follow these tips to avoid getting scammed:
For more consumer information, to file a complaint or report a student loan scam, visitbbb.org.
Kelvin Collins is president/CEO of the Better Business Bureau of Central Georgia & the CSRA, Inc. serving 41 counties in Central Georgia and the Central Savannah River Area (CSRA). This tips column is provided through the local BBB and the Council of Better Business Bureaus. Questions or complaints about a specific company or charity should be referred directly to the BBB at Phone: 1-800-763-4222, Web site: www.bbb.org or E-mail: firstname.lastname@example.org or email@example.com