(KMSP) - Former students with loans regularly receive the calls.
The person on the other end claims you’re eligible for forgiveness or help consolidating those daunting loans, painting a convincing picture that at first makes you believe your financial ship has come in.
However, the Better Business Bureau said that falling for the claim likely comes at a cost that sinks you deeper in debt.
“They often lead with, ‘We can get your loans forgiven or we can get 90 percent of your student loans forgiven,’” said Dan Hendrickson, Communications Coordinator at BBB serving Minnesota and North Dakota.
“In too many cases it’s not a good thing. It just adds on more debt and leaves them in a worse position.” Hendrickson informs.
The BBB receives the complaints from those who fall prey to the promise of student loan forgiveness and consolidation assistance every single week.
“Students who contact us say, ‘Wait a second. I don’t even know what happened! These guys told me they’d help me and now I’m being billed even more money and I’m further in debt,’” Hendrickson warns.
And anyone with student loans is a target.
“They misrepresent what they're actually doing so the student thinks, ‘okay they're doing me a favor here, they're helping me out, when in reality they're helping themselves to a nice chunk of change and putting you in more debt. They charge the student or former student $1200 or $1500 for a service student can do themselves for free at studentloans.gov.”
If by chance you accidentally fall into a conversation with these companies –beware. Watch out for the outlandish claims, companies that have you make monthly payments to them instead of a federal loan servicer, and never give them any personal information – which includes your Federal Student Aid ID.
“That opens the door to identity theft, and that’s a whole other set of problems,” added Hendrickson.
Even legitimate student loan forgiveness programs abide by stringent rules.
“It takes years, it isn’t just the snap of a finger so just know anyone who tells you ‘yeah we’ll get your loans forgiven or 90 percent of your loans forgiven,’ they’re making promises they can’t deliver on.” Hendrickson said.
The lecture here is clear. When answering any unfamiliar call, a healthy dose of skepticism can save you from a significant financial headache.
To avoid calls from these companies you can register for the “do not call list” at donotcall.gov, but a lot of these companies are not playing by the rules so chances are they’re not going to honor the list.