June 16, 2024

# 3 Shams Every Student Borrower Should Know About

Based on data from the Education Data Initiative, American student-borrowers have a [total debt of $1.76 trillion](https://www.gobankingrates.com/category/loans/student/?utm_term=incontent_link_1&utm_campaign=1243257&utm_source=yahoo.com&utm_content=1&utm_medium=rss). This vast sum has attracted lots of scammers trying to exploit this sector.

Last year, according to Robokiller, a platform that screens spam and scams, over $5 billion was lost to student loan fraud in the US.

Robocalls relating to student loans have become a common tool for these cons. Below, we have detailed the three most prevalent scams you ought to be aware of.

## Scams Tied to Student Loan Forgiveness

The Federal Student Aid (FSA) office reports that many scams are centered around President Biden’s blocked loan eradication program. Scammers contact borrowers, usually with a sense of urgency, implying that the borrower’s loan is eligible for full discharge. They will often request upfront fees, recurrent payments, or your personal information, including the FSA ID.

## Student Loan Consolidation Scams

As stated by the Texas Attorney General, if you’re being charged for federal student loan consolidation, you’re likely being scammed. These fraudsters claim to help ease your loan consolidation process for a “processing fee”. However, you can seamlessly consolidate your federal loans for free on StudentLoans.gov.

## Fake Student Loan Negotiation

Fraudsters pretending to mediate between you and your lenders define another common scam in the realm of student borrowing. They make false promises of working out a deal to reduce what you owe, modify your loan terms, or decrease your rates.

Aware that scammers are exploiting the student loan sector, you ought to consciously attempt to shield your finance. Here are few ways you can keep your money safe:

– **Beware of upfront fees:** Any scam will likely require an upfront payment. Never pay to service a current loan, apply for one, switch plans, or complete a FAFSA application.

– **Don’t share personal information:** Your lender or the Department of Education won’t demand your FSA ID or password.

– **Don’t feel forced to decide:** Many scams will pressurize you into making immediate decisions.

Ultimately, strive to research anyone or any business that approaches you. Official-sounding terminologies can be misleading; always validate their authenticity.

## Frequently Asked Topics
### How to Protect Yourself from Student Loan Scams?
To safeguard your finances from scammers exploiting student loans, you should avoid paying upfront fees, never share personal information, and refrain from making impromptu decisions. Always conduct thorough background checks on anyone or any company that approaches you about student loans.

### How to Spot Student Loan Consolidations Scams?
A key giveaway of a student loan consolidation scam is if the company charges you an upfront fee. Remember, you can consolidate your federal loans for free through the official government website, StudentLoans.gov

### How Can I Recognize a Loan Forgiveness Scam?
Many loan forgiveness scams play on misinformation surrounding federal programs. These scammers often use an urgent tone and claim that your loan qualifies for a full discharge, but that you must act fast. They will typically ask for an upfront fee or your personal data, including your FSA ID, all of which are warning signals of a likely scam.