ANDY'S CONSUMER TIP OF THE DAY: avoiding student loan scams
MEMPHIS, TN (NBC) - The Feds are out in force against student loan scams.
On Friday, officials with the Federal Trade Commission announced Operation Game of Loans, a joint federal and state sting of student loan scam artists nationwide. Virtually every case investigated so far involves bogus up-front fees and empty promises of "pre-qualification" or "pre-approval" to bait students into signing up.
As federal investigators and state attorneys general round up these hacks, here's the FTC's guidance on avoiding student loan scams:
* You should never have to pay for help on your student loans. There's nothing a company can do for you that you can't do for yourself in terms of negotiating payments, modifying loans, etc. If your loan is a federal student loan, seek help here. If it's a private loan, start with your loan servicer.
* Never pay an up-front fee. It is illegal for companies to charge in advance for loan assistance.
* Only scam artists promise fast loan forgiveness. They can't. The process takes time and negotiation. It often involves re-scheduling payments or modifying the loan's terms and conditions instead of debt forgiveness.
* Just because an offer has the U.S. Department of Education seal doesn't mean it's real. That's a common trick to make students think it's legitimate.
* Don't share your FSA ID with anyone. A scam artist can use it to steal your information from the FAFSA (Free Application for Student Aid) website.
The FTC provides more information on student loans here.
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