Beware of student loan scams on Facebook and Instagram

by Susie on April 6, 2016 · 9:00 am

person-on-smartphoneSJVC has recently seen several promotions on social media that promise student loan forgiveness and/or loan consolidation. These promotions are targeted to graduates and students of SJVC, as well as other schools.

Promotions that offer loan forgiveness or consolidation services that sound too good to be true may just be – and you should use caution when reviewing these offers and speaking with company representatives.

Many of these companies charge a fee to assist those with student loans. Those same services are offered by the Department of Education for free. Other promotions are complete scams.

The Better Business Bureau recently detailed how these scammers operate:

How the Scam Works

Consumers receive a phone call, email or spot a post on social media that claims a company can erase student loan debt. Many claim that their service is made possible by a new government program or policy sponsored by U.S. President Barak Obama.

The company asks for an upfront fee to negotiate with your student loan lender on your behalf. They will claim they’ve helped numerous other clients, and may post a fabricated student or graduate testimonial to support their claims. Student loans can only be forgiven under specific circumstances, which are not fast or easy.  These scammers will take your fee and disappear.

In another version of the student loan scam, con artists claim that they can save you money by consolidating your loans. Some charge a fee for using a free government service. Others may actually move your loans to a private lender with a higher interest rate.

SJVC urges our students and graduates to be cautious. You can always contact your SJVC campus to learn about loan repayment options.

Tips to Avoid Being Scammed

  • Never pay an upfront fee to a company that promises loan forgiveness or consolidation.
  • If it sounds too good to be true, it likely is.
  • If the company website does not have an address, recognize that as a red flag. If you can only find a phone number and there is not additional information about the company, it could very well be a scam.
  • Go directly to your loan servicer to learn about your repayment options.

Additional Resources

Federal Student Aid Website

NerdWallet Article: 4 Ways to Spot a Student Loan Scam

Clark Howard Article: Student loan repayment scams: How to avoid getting ripped off!

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