The Federal Trade Commission continues to crack down on student loan re-payment scams.
The FTC claims that some companies claim to offer services to help you pay your loans down quicker and cheaper, or be forgiven altogether. However, be cautious because it could be a scam.
The FTC announced a lawsuit against AFBC, FEBC, and others in a suit called Operation Game of Loans. These companies offered illegal, upfront fees, and failed to deliver on their promises. Their fees never went to the loan balance.
The FTC offers these tips to avoid student loan repayment scams:
Never pay an upfront fee. It’s illegal for companies to charge you in advance before helping you to reduce or get rid of your student loan debt. Companies that make you pay upfront might give you no help and not give your money back.
Only scammers promise fast loan forgiveness. Before they know your situation, scammers might say they can quickly get rid of your loans through a loan forgiveness program. But they can’t.
A Department of Education seal doesn’t mean it’s legit.Scammers use official-looking names and logos and say they have special access to certain federal programs. They don’t.
Don’t share your Federal Student Aid (FSA) ID with anyone. Scammers could use it to take control of your personal financial aid information on U.S. Department of Education websites.