If you're slowly chipping away at student debt, you may have gotten a call from one of those "loan forgiveness companies." They lay out a plan for you that sounds really tempting when you have a mountain of debt. But Better Business Bureau's Dale Dixon says you should think before you act:
Often times when these “loan forgiveness companies” contact you, they there is a small fee involved to get started. The caller will tell you not to worry about it, because in exchange, you won’t have student loan debt! Don’t fall for this scheme.
Any time you are asked to pay a fee upfront for debt relief, there’s a good chance you are dealing with a scam. Once you pay, you might not get anything in return. And you might be paying for something you can do yourself for free.
Recently, the Federal Trade Commission posted a consumer alert about this scheme saying former DeVry University students seemed to be targeted recently. The FTC says the reports come after filing a complaint in federal court against DeVry for “misrepresenting the prospects of their graduates to get well-paid jobs in their fields.”
There are programs to help with student loans and loan forgiveness, but you need to know what to look for. The Department of Education’s website, studentaid.gov is a great resource. If you are working on paying down private loans, try reaching out to the loan servicer directly to see what options you might have.
Stay away from anything that requires an upfront fee. Tread lightly with companies that charge to provide information about scholarships or loans. Most of the information you need you can get for free.
High schoolers, If a service claims to guarantee scholarship money, be cautious. Legitimate scholarship services have no control over who wins. Be careful not to give out personal information, banking information, or write a check to businesses that are unfamiliar or suspicious.