On Thursday, August 10th, the Tennessee Department of Commerce and Insurance’s (TDCI) Division of Consumer Affairs issued a warning to consumers regarding student loan scams.
TDCI listed a plethora of warning signs and suspicious activities that student loan borrowers in Tennessee should be on the lookout for. First and foremost, TDCI warns student loan borrowers to always ignore or reject an offer for a scholarship or student loan that has an upfront fee attached to it, especially if you never even applied for said loan or scholarship.
Second, TDCI reminds student loan consumers to never cough up sensitive personal or financial information to someone who is sending you an unsolicited call, letter, or email. If you do make this mistake and later find out that you were a victim of a scam, the Division of Consumer Affairs reminds you to call your bank or credit card company to suspend all accounts and cards.
And, the final warning regarding student loans or scholarships is to remember that you, as the student loan consumer, always have time to make a decision. If someone is trying to rush you into a decision by saying their offer is only offered for a limited time then they are most likely a scammer.
Regarding scams related to student loan forgiveness or reduced payments, TDCI warns student debtors to be wary of someone offering a fee to negotiate your student loans for you. Almost always, this will lead to you paying a loan with a higher interest rate, losing money and not receiving the aforementioned services, or you paying for a service that easily could have been done for free.
Further, if you ever receive a phone call, email, letter, or text message that is offering you loan consolidation, lower monthly payments, or student loan cancellation, then make sure to read the exact details of the offer. Often, scammers will attach a fee to any of these services, even though they usually can be done for free through the federal government.
Finally, TDCI warns student loan borrowers to never listen to someone who is consulting you to stop making student loan payments or to stop communicating with your student loan servicer. This is most likely a scam, and failure to make timely loan payments can hurt your credit score and increase your student loan balance.
“Unsolicited offers, upfront fees, and no-strings-attached debt forgiveness can all be red flags of scholarship and student loan scams,” said Tennessee Department of Commerce & Insurance Commissioner Julie Mix McPeak. “We urge Tennessee students to take the time to thoroughly investigate their student loan and/or scholarship options. When it comes to scams, a few minutes of research could help you avoid years of regret.”
There are a couple of ways student loan borrowers can stay one step ahead of student loan scammers and fraudulent companies. LendEDU recently published a report that gives student loan borrowers information on what to look out for when it comes to student loan scams. Additionally, if you feel as though you have been a victim of a student loan scam, you can file a complaint with the Federal Trade Commission.
When it comes to Tennessee and student loans, LendEDU’s newest “Student Loan Debt Statistics By School By State” report found that on average, student debtors in the state owe $26,611 in student loan debt, the 34th highest average in the U.S. For Tennessee, this was an increase of 1.50 percent. In total, 57 percent of students in Tennessee are saddled with student loan debt. Tennessee State University left graduates with the most student loan debt in the state, $35,214.
Author: Andrew Rombach
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