Student loans can follow you for a large part of your adult life – which is why it can be a lucrative target for scammers. If you’ve got student loan debt, you might have seen ads or been contacted by companies who promise help and relief. Some of those are scams – and the FTC is going after them.
Today, the FTC announced Operation Game of Loans (we love a good pun!), a joint FTC and state law enforcement sweep against student loan debt relief scammers. The operation includes seven actions filed by the FTC, with five new cases announced today.
So here’s how the scams usually work. You’ll get a call from someone claiming to be affiliated with the government or your loan provider promising to reduce or eliminate student loan debt. Sounds pretty appealing, right? They’ll tell people they are “pre-approved” or “pre-qualified” and then pressure them to sign up for the program on the spot. Here’s where they get you: enrolling requires consumers to pay an illegal advance fee of $1,500. After you’ve paid, the company disappears, doing little to nothing about your debt. At minimum, consumers get help for services they could have gotten from their loan servicer or the U.S. Department of Education for free.
If you need help with your student loans, paying isn’t a necessary option. There’s nothing a company can do for you that you cannot do for yourself for free. If you are a federal borrower, StudentAid.gov/repay is a complete guide to repaying your federal student loans. Private borrowers can get options from their loan servicer.
If you get one of these shady calls, here’s how to avoid the scam:
For more resources on student loans from the FTC, check out their new Student Loans page.
