Student loans

Increase in student loan forgiveness scams expected

Knoxville, Tenn. (WATE) — At the end of August, the federal student loan payment break is about to expire. Shortly after the start of the pandemic two years ago, loan repayments were suspended.

In Tennessee, graduates know all about student loans. More than 50% of Tennessee graduates in the class of 2020 took out student loans to pay for their education, with an average debt of nearly $27,000. This has led many to try to take advantage of those trying to get out of debt.

WATE’s Don Dare recently received an unsolicited call on his office phone in Greystone.

“Hello, this is a message from the Student Loan Forgiveness Center of Tennessee. As you may know, the forbearance period ends as soon as payments can begin to resume,” the voice said over the phone.

Dare used the GI Bill to cover the cost of his degree at the University of Georgia. Therefore, receiving a call from the Student Loan Forgiveness Center of Tennessee was surprising.

“The reason we are calling you is that your student loan is eligible for a forgiveness program. We need your authorization to complete the process. Please call our office located in Tennessee at 423…BIP,” continued the call.

Dare took the recording to Tony Binkley at the Greater East Tennessee Better Business Bureau. He called this local number 423, supposedly located in Tennessee.

“One of the questions I asked during our conversation was, are you located in Tennessee? They said, no, we’re in Irvine, California. It’s a real company with a real address. However, their website is very suspicious. It’s very, very simple. It’s hard to get someone on the phone. There were just a lot of red flags for me,” Binkley said.

“If you had a student loan, would you work through this company? Dare asked.

“Absolutely not. At some point they’re going to ask you for money. That’s how they stay in business, that’s how they survive. They’re going to ask you for money at some point “You can go directly to your lender, your student loan provider, or you can check the student aid resources on the government website for more information. You can get this information for free,” replied Binkley.

The main thing here is to be careful with a call like this.

“When someone contacts you out of the blue, it’s a number for the money. They’re just calling whoever they can. Hopefully they’ll get a shot, someone who actually has a student loan – someone younger than you or me — hoping he can take advantage of the knowledge he doesn’t have,” Binkley said.

There are legitimate student loan forgiveness programs that won’t cost you a dime. For example, the US Department of Education offers legitimate student loan forgiveness programs, as well as ways to reduce your student loan repayments. The best thing is that they are free to apply through your official loan agent.

Remember this though, if you receive a debt relief offer that sounds “too good to be true”, it probably is.

A few weeks ago, President Biden said another extension of the student loan payment suspension, which is due to expire at the end of August, is on the table and a decision is expected soon. This is one of the reasons you can get a call no matter how long you’ve been in school.