With presidential candidacy bubbling to the front of media outlets, the desire to discuss hot button topics is more common than ever. One topic which finds its way to the forefront is student loan debt. How do we pay it down? How do we fix expensive higher education? Most of all, how do we help students with big pockets of debt? On the search for answers, many are offering solutions. Unfortunately, so are scammers.
Every solution has its lampreys, and scammers look to strip already poor students of their remaining cash. The BBB (Better Business Bureau) of Minnesota recently received reports relating to this, finding something a bit off about a California-located firm talking about relief for graduated alumni. Those Minnesota residents reported they paid an upfront fee of $600, only to receive no service in return.
The BBB explained the process of what happened with this phony firm, which promises relief but again, doesn’t deliver. Generally, a student fitting certain “requirements” receives an offer via phone call, letter, or email discussing how they can get immediate financial help. The firm claims this is made possible because of a new government program or other such vague claims. Their premise is they can negotiate or consolidate your total loan amount to a far lower value, or remove it completely. After, of course, you pay their up-front fees.
Sounds too good to be true, and it certainly is. One might think it should seem quite obvious such promises would easily be identified as scams, but keep in mind these firms prey on the desperate or unaware. So much so, the firm typically claims how many people they’ve helped. An insulting premise, and the BBB along with other advisory people warn not to believe them. Minnesota individuals trying to use the service met the same problems as others: the money was paid, and the mysterious firm with all its promises vanishes.
The BBB continued to explain about other scam types, which are perhaps worse. Some firms will charge for a free government service, others might take a student’s loan and move it to a private lender with higher interest rates, and some will promise big loans for up-front fees. It’s all a hoax, the BBB explains, and a vile practice at that.
In light of students being taken advantage of in Minnesota, the BBB simply reminds us all that big promises are just too good to be true. Sadly, many are powerless to get their money back as well. Debt is to be handled responsibly, and can’t be erased in minutes.
It should be noted that debt consolidation scams are incredibly popular. All too often, scam companies try to claim they can consolidate debt for you, reducing monthly payments. It’s a practice that works all too well on the desperate borrower. Just know that legitimate student debt options such as direct consolidation with the federal government or private student loan consolidation do not cost an application fee. They shouldn’t request any payment for “services” either.