3 Most Popular Student Loan Scams You Should Know About In 2019

30 days ago



In one of our previous posts, the Typical Student team already told you how to figure out that your scholarship is actually a scam. Unfortunately, there are more and more cases appearing. Seeing that, today, we’ll show you 3 most popular student loan scams in 2019.


#1 IRS Student Tax Scam





How it looks: A student receives a phone call from a person who says they are IRS agent and claims that the student owes a "federal student tax." 

The Truth: 

There is no federal student loan tax. What’s more, the IRS will:

  • always contact you first by mail before calling you.
  • never demand immediate payment.
  • never request a specific form of payment such as a wire transfer.
  • not threaten you with arrest or deportation for not paying your taxes.
  • not request personal or financial information by email.


#2 Student Loan Consolidation Scam





How it looks: A student loan company promises to consolidate your student loans and lower your monthly payments. And they say they’d do it for a fee.

The Truth: 

  1. The only official form of student loan consolidation is with the federal government. Check out Studentloans.gov or call 1-800-557-7394.
  2. There is no fee for student loan consolidation.
  3. If the company claims to have a relationship with the U.S. Department of Education, it's a scam.
  4. Importantly, student loan consolidation does not lower your interest or monthly payment. Rather, your monthly payment is equal to a weighted average of the interest rates on your current federal student loans.


#3 Student Loan Forgiveness Scam





How it looks: Another student loan debt company that usually contact you via an online ad or email) promises to forgive your student loans for a fee.

The Truth: 

  1. No student loan debt company will "forgive" your student loans - no matter how much you pay them.
  2. This is a scam that sounds like Public Service Loan Forgiveness, which is a legitimate, federal government program for public servants with federal student loans.
  3. If the company claims to have a relationship with the U.S. Department of Education, it's a scam. When it comes to student loans, only student loan servicers and debt collectors have a relationship with the U.S. Department of Education.
  4. Don't pay an upfront fee for student loan debt relief.
  5. For your federal student loans, you can enroll for free in a student loan repayment plan with the federal government, which may offer student loan forgiveness after 20-25 years. You can also consolidate your federal loans (not private student loans) into a Direct Consolidation Loan with the federal government.

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Any questions or propositions?