Congratulations, it’s time to pay off your student loans!
Most people in the U.S. exit postsecondary education with at least some student loan debt, and sometimes paying those loans off can present problems. While there are well-established paths to reducing the burden of a large student loan balance, there are also plenty of con artists waiting to take your money and make things even more difficult. Here are a few things to watch out for.
Upfront Fees
It is not illegal per se to charge a fee for services, such as consolidating your federal student loans, that you can do on your own for free, in much the same way that it’s not illegal to charge a fee for tax preparation.
However, any upfront fee for help with student loan repayment is a sure sign of a scam. Don’t pay for anything in advance, and even if they’re not charging an upfront fee, look at what they are charging compared to what you’re actually getting in return. Is it worth it? Do your research on every company you’re considering working with.
Debt Elimination
There are not many ways to have your student loan debt erased completely, and if you’re reading this you already don’t qualify for the primary one (death). Also, if you were taken in by a for-profit college that used falsified job placement numbers to lure students, there may be programs that might help. There are a few other options that apply to very specific cases. Other than those, with very few exceptions, once you have student loan debt, it’s yours until you pay it off. Bankruptcy won’t even touch it.
This means anyone advertising student loan elimination or forgiveness is trying to scam you. There is no way to pay a company a fee in exchange for your student loan debt disappearing. All you’ll end up doing is losing money and ruining your credit.
High Pressure Tactics
If you’re being told that an offer is only good for a certain amount of time, or being pressured in any other way by a salesperson, that’s a sign of a scam. There are no limited-time-only offers when it comes to student debt relief. They don’t hold blowout sales on this stuff.
What You Can Do
You can consolidate your federal student loans, adjust your repayment schedule, defer your repayment period and more yourself, for free, through the Federal Student Aid Office of the Department of Education. If you have private student loans, you can contact those lenders for options as well. There is no compelling need to pay anyone to do these things for you, unless you choose to do so and know what you’re getting into before agreeing to anything. Again, do your research.
One of the best resources for detailed information on student loan repayment is the Federal Student Aid Office website (https://studentaid.ed.gov). It also features specific information on avoiding scams (https://studentaid.ed.gov/sa/types/scams).