How to Avoid Student Loan Scams

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Whether you’re looking for a student loan or trying to pay off those you already have, don’t fall for scams! There are companies that build their whole businesses on trying to get you to pay for services that are actually free.

Here’s what to look out for:

Advanced Fee: If a company offers to find you the best interest rates or most desirable terms of repayment on student loans and they charge an upfront fee, do not sign up for their services. It’s a scam!  Any legitimate student loans, whether government, institutional, or private, will not demand advanced fees. You shouldn’t have to pay money to get money. There are sometimes fees associated with student loans, like origination and distribution fees, but you should never be required to pay them upfront.

Debt Elimination: So you have student loans and someone out there tries to tell you that—for a fee—they can cancel your debt. Don’t fall for it! While there are some circumstances where you may qualify for loan forgiveness or debt elimination, you should never be charged a fee. If you received aid through the Federal Government, contact them directly to find out—for free—what you may or may not qualify for.

Loan Consolidation: You may have several loans from a bunch of different sources. Wouldn’t it be easier to combine all your loans into one and make a single monthly payment? You might even be able to negotiate a lower rate. Companies often offer to do just that for you, but FOR A FEE. Are you seeing a pattern here? Then you know what comes next. They charge you for services that are absolutely free. You should not pay any administrative, consolidation or processing fee to combine your loans.

Law Suit Loans: You may have read that some student debt actually has been cancelled recently by the Federal Government because of dishonest practices of a few bad schools. Some disreputable law firms are using those headlines to convince you that they can make your loans disappear. They can’t! If you have questions about your school and your loans, you can contact the U.S. Department of Education directly at 1-800-4-FED-AID.

Student loans can help you fund an education that can set you off on the path to a new career and a better life. But don’t go into any loan agreement without full knowledge of your responsibilities. And don’t fall for scams! If you have questions about financing an education at Charter College, contact one of our Financial Aid Representatives now.