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The total student loan debt sits at more than $1.6 trillion, with 92% of all outstanding balances in federal management . That is a large portion of the US population trying to repay a good-faith loan.
To help alleviate this pressure on the national economy, new student loan forgiveness programs have been developed. Unfortunately, like any other federal program, this has created a new crop of companies, consultants, and fraudsters claiming to assist people in applying for student loan debt relief.
The last thing anyone wants is to fall victim to a scam that could place further financial burdens on their personal income, family future, and legacy wealth. Here’s how to be sure you are protected from such scams so you can receive relief without paying any expensive fees or fraudulent commissions.
The challenge is finding which companies and consultants are legitimate compared to the scammers hoping to use your personal information for maliciously. Roughly 45 million Americans have some form of student loan debt . Every time a new relief program is announced from either side of the political aisle, it generates massive online responses from all generations.
That public discourse creates natural marketing advantages for companies, consultants, and scammers that wish to capitalize on the opportunity. They know people are facing challenging financial responsibilities that would welcome anyone helping them remove or reduce that debt.
In a single case involving the Student Loan Doctor, a small loan debt-relief scam, the FTC had to send 22,817 checks totaling more than $2 million to victims . This single scam tricked consumers into believing they could get immediate relief or lower monthly payments, only to pocket an upfront fee and leave people hanging.
The primary reason for the uptick in new student loan debt relief scams is the current forgiveness package from the Biden administration. This is a three-part plan to give American’s a bit more breathing room filed under the auspices of the COVID-19 pandemic relief. It includes:
The reality is this program must adapt rapidly. There have been numerous lawsuits from states and private groups to squash the debt relief program. The nonpartisan Congressional Budget Office estimates this plan will cost $400 billion . That is causing a lot of political in-fighting, which means more confusion for the general public, who want a lower payment.
As of right now, the best thing to do is apply directly for student loan forgiveness at https://studentaid.gov/debt-relief/application. That way, if the program goes through, you are covered for consideration.
While we all wait for the final results of the legal battles for and against the student loan forgiveness plan, there are some key things you can do to protect yourself.
The scams will only grow into the future as these forgiveness programs become more widely available and actively pay out or reduce debt. Wherever there is money to be made, you can expect fraudsters, scammers, hackers, and thieves to try and take advantage of your good intentions.
Keep a clear head and take your time working through the official student loan forgiveness portal, and you should be well on your way to some much-needed relief.
Our team at Amesite works with higher education organizations all the time, and we want to help solve key problems the industry is experiencing. Hopefully, this critical information will alleviate many myths and anxieties surrounding student loan debt relief.