Student Loan Scams – Protect Yourself from Loan Fraud
What is a Student Loan Scam?
Student loan scams target individuals looking to secure or repay their educational loans. These scams often involve false promises of guaranteed loans, loan forgiveness, or special repayment programs in exchange for upfront fees. Once the scammer has your money, they disappear — leaving you with no loan, no forgiveness, and a lighter wallet.
Common Types of Student Loan Scams
- Guaranteed Loan Scams: Scammers offer a “guaranteed” student loan if you pay a large service fee upfront. Once paid, you never hear from them again, and the “company” usually does not exist.
- Loan Forgiveness Scams: Fraudsters claim they can erase your loan through programs like “Obama Student Loan Forgiveness” for a small fee. In reality, no such fast-track program exists.
- Fake Loan Assistance Services: Companies offer to manage your repayments for a fee but never make payments on your behalf — putting you in further debt.
How to Avoid Student Loan Scams
- Be wary of anyone guaranteeing a loan regardless of your credit score.
- Never pay upfront fees for loan processing or forgiveness.
- Verify any organization offering loan help through official government or bank websites.
- Understand that genuine loan approval depends on your credit score and eligibility — not payment of extra fees.
- Read all documents carefully before signing and research the company thoroughly.
What to Do if You’ve Been Scammed
If you suspect you’ve been scammed, act quickly:
- Report the fraud to your local police and file a formal complaint.
- Consider taking legal action with the help of a qualified lawyer.
- Request a chargeback from your bank or credit card provider, providing all proof of communication with the scammer.
Always keep detailed records of your interactions with any loan service provider. Prevention is your strongest defense — if an offer seems too good to be true, it probably is.