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

30 days ago

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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

 

 

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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

 

 

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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

 

 

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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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