If you've just graduated from college or any graduate institution, now is the time to celebrate all your hard work - but it's also a prime time for scammers to take advantage of your student loan debt. Every year, thousands of students graduate college in all fifty states - some with tens of thousands of dollars in student debt - and far too many fall prey to student loan repayment scams. But don't worry - Scam Awareness Alliance has you covered, and we've shared some of this year's most newsworthy scams so you can pay off your student loans safely.
The first of the featured stories comes from Virginia, where two recent college grads reached out to their local news affiliate after falling for a student loan repayment scam. After paying $23 a month to the service, which falsely claimed to have an "A" rating by the state's Better Business Bureau (BBB), the two grads realized they had gotten zero debt relief since beginning the service in 2012. The company has reportedly received 17 separate complaints, and almost all of which have gone unanswered.
In the wake of these stories, Wisconsin Better Business Bureau has cautioned student loan holders who seek help from outside loan repayment services. Susan Bach, regional director of the BBB for Northeastern Wisconsin, told a local newspaper that every year, more and more scammers target recent college grads on the phone, via email, and on social media, and ask them to pay up-front fees for supposed student loan repayment services. Once the unlicensed "agency" receives the money, they'll stop contacting the graduate and, essentially, disappear.
To stay safe and avoid these scams, the Wisconsin Public Service has advised all college graduates (and customers in general) who receive scam phone calls to stay on the line and get as much information about the agency as possible. That way, the person can hand over the information to authorities, and the "never-ending cycle" of fraudulent debt relief services can finally stop.
Thankfully, lawmakers in some states have had enough - and are taking these scammers to court. On May 4, Illinois Attorney General Lisa Madigan filed lawsuits against five different student loan repayment companies who she says have violated state law. By filing lawsuits, Madigan is attempting to recover the money the "con artists" took from students, including Ruth Varela, who paid the company $800 to alleviate her debt - and got nothing in return.
Although there are many great loan repayment services, there are just as many that will try and scam you out of your money. Always trust Scam Awareness Alliance to make sure your money is safe and secure!