Monday, the Chicago Tribune reported that student debt relief is now in the top 10 consumer scams in Illinois.
However, this is a growing problem all over the country. In a search with the query "student loan" in the Better Business Bureau's scam tracker, there were 92 scam results from the past month.
According to PBS, students in the US have an aggregated $1 trillion in debt. With the costs of tuition steadily rising, there is no sight of a solution. Seeing that as an opportunity, scammers have increasingly created student debt relief schemes. They target students with flashy Internet ads and claims of being with credible offices, such as the Kentucky Attorney General's office. Your Internet searches are not private, therefore if you have been searching things related to student loans, you will be more likely to see these ads (Thanks Google!).
In a report published Tuesday, the real Kentucky Attorney General gives four signs of a fraud. Be wary of:
1. Upfront fees and contracts.
2. Promises of IMMEDIATE loan forgiveness or debt cancellation after a certain amount of payments.
3. Companies asking for your personal information, such as FAFSA pin or social security number.
4. Companies asking you to sign a third party authorization or power of attorney.
This is not a new idea. In December 2014, the Consumer Financial Protection Bureau, in partnership with Florida's Attorney General, shut down two companies preying on students with loan debt. Click here for some of their tips to avoid scammers. If it sounds too good to be true, it probably is.
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