Student Loan Forgiveness Programs
Federal Student Loan Forgiveness Program: How The Scam Works
A fake federal student loan forgiveness program is offered these days via phone calls, so beware. If you are reading this, we are assuming that you already know what a forgiveness program is, so let's dive into the actual fraud, expose it and show you how to report it. How does it work?
Watch the video below to see the Student Loan Forgiveness Scam caught on camera:
The caller introduces herself as "Emily from the Student Loan Forgiveness Center". Is there such a thing? No. She continues:
"We're contacting you today because our records that you may qualify for a reduction of your student loan payments to federal programs. Now over 30 million students qualify and don't even know it – and miss on the opportunity. So, would you like to hear how your student loans would qualify for these programs?"
If you say yes, regardless if you have a student loan or not, she will proceed by asking a bunch of other personal questions asking you to prove your identity. Once she extracts your personal data that she needs, she will pass you along to a "specialist", who will also grind you on all the info you can give. Victims that are gullible end up giving bank account numbers and credit card sensitive data, while others just lose a few hundred dollars as a pre-payment of the whole process, which is promised to save them from the thousands of dollars of debt.
If it was that easy to get away with your student loan, everyone will do it in a second. Sure, certain programs are dealing with student loan forgiveness for teachers, nurses or others (see below), but their reps are not calling random people offering deals that are too good to be true.
On the other hand, beware of the "Obama student loan forgiveness" trap. Consider it a red flag every time you hear that term. Many student "debt relief" companies use it as a catch-all term for free federal programs — which they charge to enroll borrowers in. If you want to enroll in federal programs like income-based repayment and federal student loan consolidation is free to do on your own through the Department of Education. See below.
Student Loan Forgiveness Program Scam: How To Avoid
As tempting as it sounds if you are a student, call scammer's bluff and just hang up the phone. Deals like this are not to be trusted. Do your research, work hard, pay your loan. Some Government programs offer massive help with your loans. Let's take a look at a few of them.
Public Service Loan Forgiveness
This program is available to the government and qualifying nonprofit employees with federal student loans. How does it work? In most cases, eligible borrowers can have their remaining loan balance forgiven tax-free after making 120 qualifying loan payments. Cool, right? Also, borrowers have to make payments while enrolled in an income-driven repayment plan. However, on a standard repayment plan, the loan would be paid off before you're eligible to benefit from forgiveness.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness Program is very popular and efficient. Teachers employed full time in low-income public elementary or secondary schools are eligible for the program after working for no less than five consecutive years. Borrowers can have up to $17,500 in federal direct or Stafford loans forgiven. However, in order to qualify, teachers must have taken out loans after Oct. 1, 1998, which is probably a good time margin for everyone. You can apply HERE.
Income-Driven Repayment Forgiveness
This is probably the most important program. Why? The federal government offers four main income-driven repayment plans, which allow borrowers to cap their loan payments at a percentage of their monthly income. If you are enrolled in one of these four plans, your remaining loan balance will be eligible for forgiveness after 20 or 25 years. It seems like these plans are most beneficial for those with large loan balances relative to their income, which is most of the cases.
Student Loan Forgiveness for Nurses
The good news about this is that nurses having student debt can take advantage of quite a few options in order to get student loan forgiveness: Perkins loan cancellation, Public Service Loan Forgiveness, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses' unpaid college debt. The second one, Public Service Loan Forgiveness, may be the most likely option for most nurses, as very few borrowers have Perkins loans, while the NURSE Corps program is highly competitive. Good luck!
Fake Federal Student Loan Forgiveness Program: How To Report
Make your family and friends aware of the Student Loan Forgiveness Scam by sharing it on social media using the buttons provided. You can also officially report the scammers to the Federal Trade Commission using the link below:
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