The Feds Are Cracking Down on Student Loan Forgiveness Scammers
More than 42 million Americans share $1.4 trillion in U.S. student loan debt, according to the Federal Trade Commission.
If you’re reading this, you’re probably one of them. I am, too.
For many of us, the idea of cutting down our massive student loan debt at the snap of a finger can be an enticing idea.
“Sign up now and save BIG on repayments! We’ll help you get your student loans forgiven in as little as FIVE years! Lower your monthly payments!“
The claims are tempting, but they’re also dangerous and unrealistic. These quick-fix claims are scams, and the Federal Trade Commission has started to crack down on them big time to protect you and your money.
Operation Game of Loans: A Big Fight Against Scammers
On Oct. 13, the FTC announced its new initiative to fight student loan forgiveness scams: Operation Game of Loans. This doesn’t involve fire-breathing dragons or white walkers — I know, disappointing — but it does involve actionable steps to help you protect your money.
According to the FTC, scammers have collected over $95 million in illegal fees from those struggling with student loan debt, and now the agency is coming full speed at these crooks to try and stop them.
Composed of 36 actions, and in collaboration with 11 states and the District of Columbia, Game of Loans uses federal and state law enforcement to target illegal student loan repayment programs.
By taking these fake companies to court, the FTC has frozen accounts involved in as many as five major student loan repayment scams — and that’s just the beginning. Actions are also pending against 11 more student loan debt relief scammers.
What does this mean for us? Well, it means fewer criminals out there stealing our money — and fewer people being lured into their malicious acts, for now.
To help consumers avoid falling victim to these frauds, the FTC has updated its consumer education resources to include information on identifying and reporting scams, such as:
- Only scammers promise fast loan forgiveness.
- Never pay a fee up front for help.
- Scammers can fake a government seal.
- Don’t share your Federal Student Aid (FSA) identification with anyone.
If you think you may have fallen for a scam, you can file a complaint with the FTC online here or call 1-877-FTC-HELP (382-4357) for help.
As for the scammers… well, let’s just say winter is here.
Kelly Anne Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.