Student loan scams are big: Spot them NOW

Some scamsters wait to encash on emergencies and mass disasters. COVID19 opened up lots of opportunities for them. Given the global proliferation of loan scams, we are going to talk about how to spot and avoid them today.  

Types of student loan scams 
Many students studying on educational loan were in a tight spot and unable to pay on time. A common type of scam developed around fooling these students in believing that paying a smaller amount will get the bigger outstanding amount forgiven. Another common type of scam involved surprisingly easy and affordable loan schemes, resulting in students forfeiting registration fees, and also opening themselves to bigger scams based on stolen banking information. Finally, discounted loan or instalment schemes were promised to students under the disguise of fake institutes, and they lost the money that was supposed to be down payment.  

How to spot fake student loans  
Here are a few typical scenarios that loan scamsters will play out to fool students and parents:  

You are asked to pay upfront or monthly fees for debt relief  
As the parent of a student who needs loan relief, you are already under pressure. Don’t agree to any company that asks you to pay fees immediately or signs you up for a monthly scheme aimed at reducing loan burden or waiving it completely. Approach the bank directly, explain the situation and try to negotiate a waiver or reduction. If that fails, ask your child’s institution to intervene. If they are unwilling, approach the banking ombudsman or government appointed negotiator to help you out.  

The company promises immediate loan forgiveness 
Some students can actually qualify for loan forgiveness based on family income and merit. To avail this, you need to approach your child’s institute, the bank and the government with full knowledge of what is available. Look up the internet, it’s the safest and easiest option. You can also see if your child’s institute has a loan advisor or someone from the administration appointed specifically for this, and talk to them. But do not believe a company that is offering something too good to be true.  

You have to sign up for a loan immediately or you will miss an offer  
Do not hurry into a big decision for your child’s future. Fake companies misuse your and your kid’s personal and financial information. No offer is running away and there are lots of banks.