5 months ago
In the last month, student debt in the U.S has peaked at $1.465 trillion, according to Bloomberg. 25% of individuals who hold student debt confess to having difficulties meeting their repayments. Sadly, scammers have honed in on this and are targeting student loan debtors with a vengeance. Student loan phone scams accounted for just 3.7% of student loan scams in 2017. However, this figure rocketed to 29.2% in 2018. Therefore, when it comes to getting on top of your student finances, it’s essential you know how to steer clear of the scammers.
There are multiple genuine student debt forgiveness programs which aim to help individuals to pay off their debt. The promise of thousands being potentially wiped off your debt is a welcome offer, so con artists are using such services to entice students out of their personal information and, in turn, their money. Yahoo! reports that scammers are calling students claiming to be from a company connected with the Federal Student Loan Association who can reduce their monthly repayments and cut their interest rate.
Naturally, students keen to reduce their debt are handing over their personal information and are paying the upfront fees that are requested. However, these fees are against the law and have cost borrowers $95 million to date. Furthermore, once the scammers get your personal data, they can steal thousands from you by accessing your bank account, paying for goods and by taking out financial products in your name.
Protecting your cash
You should always be on your guard when anyone calls you promising to slash your student debt in return for your personal information. Your personal data is just that, so ensure you only give out your information to trusted organizations for optimum financial protection. It’s also important to note that the Federal Student Loan Association doesn’t work with any affiliated companies.
So any phone call from anyone claiming to be from such a company should be swiftly terminated. For students wishing to cut their student debt fast and pay back what they owe quickly, it’s best to look into debt forgiveness programs yourself and contact the companies directly to determine whether you meet their criteria. Alternatively, look at your debt consolidation options as this can lower your interest rate.
A growing problem
It’s not just American students whose money is being targeted by fraudsters. In November, it was reported that UK students had been conned out of their cash after receiving a tax refund email claiming to be from HMRC. The students who clicked through the link provided and filled in their details then lost their cash as the scammers used the information to steal from them. Meanwhile, earlier this year CNBC reported that students were being bombarded with spam text messages from companies promising to cancel student loans altogether.
With millions of students in debt by thousands, they are fast becoming easy marks for scammers. Therefore, students need to stay on their guard and take every step possible to safeguard their personal finances.
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