Student loan debt scams
Don’t be fooled by scams that, for a fee, they can reduce or eliminate your college loan debt. The fact is they can’t do anything for you that you can’t do for yourself for free.
College loan debt continues to be a major concern for college students and recent graduates. Unfortunately, that makes those parties vulnerable to two new scams. The Federal Trade Commission wants to inform the public not to fall for these rip-offs.
Recently, college students have received phone calls from imposters posing as IRS agents claiming the student owes a “federal student tax.” Callers then instruct the student to pay the tax by wiring money or using a gift card.
- Fact: There is no federal student tax.
- Fact: No one from the IRS will ever call and ask you to wire money or pay using a gift card or a prepaid card.
- Fact: These kind of calls are always a scam.
What should you do if you get such a call? Hang up immediately.
The Federal Trade Commission is also pursuing lawsuits against two schemes that claim to provide student loan debt relief. The unscrupulous companies promise to get the student’s loans forgiven or significantly reduced. Students who paid the company for help did not get the relief that was promised.
- Fact: You don’t have to pay to get help with your student loan debt.
- Fact: A company offering, for a fee, to help address your student loan debt can’t do anything for you that you can’t do for yourself for free.
The Federal Trade Commission has new educational materials to help borrowers avoid a scam and find reputable help with their student loan debt:
- Student Loan Debt Relief explains how to spot a debt relief scheme, and what people struggling with student loan debt can do themselves.
- Maria and Rafael Learn the Signs of a Debt Relief Scam tells the story of a couple trying to repay debt they accumulated for their daughter’s college education. It’s the latest in a series of graphic novels to raise awareness about scams targeting Latino communities. You also can order free copies of the Spanish-language version of the fotonovela at Federal Trade Commission’s Free Publications for America’s Consumers webpage.
- A Banned Mortgage Relief and Debt Relief Companies and People list shows every company and individual ever banned by Federal Trade Commission from providing debt relief and mortgage assistance relief services.
Michigan State University Extension provides educational workshops and resources related to youth money management, and financial and homeownership education for adults. Contact your local MSU Extension office to find an Extension educator and programs scheduled in your area.