There are more than 43 million student loan borrowers in the U.S., owing nearly $1.3 trillion dollars of debt. The National Foundation for Credit Counseling believes those numbers make it a hotbed for debt relief scams and NFCC officials are warning student borrowers about falling victim.
Official-looking emails or websites are intended to lead people into thinking they are legitimate. One way to verify whether the correspondence is from a reputable organization is to check their Web addresses looking for reviews or complaints online. It’s also worth noting that the U.S. Department of Education’s Web pages end in “.gov" not ".com.” The government also doesn’t send email or use advertising to encourage students to take out loans or borrowers to consolidate debt. "It’s hard enough to finance school, get through it and then manage your debt load once you leave," said Bruce McClary, spokesperson for the NFCC. "Unfortunately, being targeted for student loan-related scams is one more thing graduates may have to deal with.” Earlier this week, Kentucky Attorney General Andy Beshear warned residents of a new student loan debt relief scam. "The number of scams targeting Kentuckians is at an all-time high but this scam angers me because it preys on students who are already overwhelmed with debt,” Beshear said, without providing details. "This is at a time when colleges and universities are facing crippling budget cuts from the executive branch that will be passed on to students. I’m pledging the full resources of my office to prevent these companies from putting more stress on our students.” Roughly each week, officials from at least one state report on a new student loan relief scam. In Illinois, earlier this week, Attorney General Lisa Madigan said scams targeting people struggling with student loans are booming and for the first time - placing No. 7 - rank in the top 10 consumer scams in Illinois. About 1,500 of the 25,094 complaints her office received last year cited student loan relief scams. The NFCC cautions consumers to not provide information, especially a Federal Student Aid PIN, to someone who calls or writes. Instead, ask for a case number, then call the creditor, bank, credit union, credit card company or lender using their published number, which allows for verification that they’re actually trying to reach out regarding a problem with an account.Urgency is a red flag. Whenever pressed to make a quick decision involving a "special offer,” step away and review who is presenting it.
"Scammers use urgency the same way magicians use colorful distractions - to focus attention away from what they don’t want others to see,” the NFCC said.The NFCC cautioned that while there are many programs offering forgiveness or cancellation, borrowers need to apply to them directly. There aren’t any middlemen who can negotiate special deals, although there are certified counselors, including those who work with nonprofit NFCC member agencies, who can help identify opportunities for debt relief and provide guidance toward the right option.