Avoiding student loan repayment scams

As if graduates aren't anxious enough when the time comes to start repaying student loans, here’s news that might make them even more nervous — somebody is likely trying to rip you off.

It’s not paranoia. “Student loan repayment scams became such an issue that in 2017 the Federal Trade Commission launched Operation Game of Loans. Scammers collected over $95 million in illegal fees” over a number of years via repayment schemes, says Jacqueline Devereux, a financial expert with SproutCents.com.

Quick-fix student loan debt relief schemes may yield future regrets. Here’s how to avoid getting duped.

Pay attention to red flags

“Be skeptical of any person or company charging an upfront fee before rendering services. Be leery of threatening phone calls, poorly written emails and social media messages requesting your personal information,” says Andrew Pentis, personal finance expert at StudentLoanHero.com.

Robert Farrington, creator of TheCollegeInvestor.com, points out another clue: “If you’re told to stop making your student loan payments, think twice. No company should tell you this. You should always make your minimum payment.”

Scammers use the internet, telephone and mail to target victims. “If you get something in the mail with 'government' seals that has your financial information splattered over it — like 'Your student loan of $56,987 has been Pre-Qualified to be forgiven!' — run,” says Farrington.

Do your research

Before working with a student loan company, read reviews online and talk to others who’ve used such companies. Read information from the Department of Education about what can be done to manage and repay student loans. Says Leslie Tayne, a debt resolution attorney with the Tayne Law Group in Melville, “Understand what you can do on your own. Most things student loan help companies claim they can do, you can do yourself.”