Fraudulent companies promising student debt relief have scammed borrowers out of hundreds — and sometimes thousands — of dollars, according to a new CFPB report. (iStock)
The Consumer Financial Protection Bureau (CFPB) said it has seen a rise in complaints from student loan borrowers about scammers promising debt forgiveness or forbearance extensions. In some cases, borrowers said they were swindled out of hundreds or thousands of dollars.
Authorized programs for student loan relief include Public Service Loan Forgiveness (PSLF), closed school discharges, borrower defense to repayment, income-driven repayment plans (IDR), COVID-19 administrative forbearance and federal payment deferment.
Another legitimate debt relief option is refinancing, in which you pay off your current student loan debt with a new loan through a private lender that offers more favorable terms, such as a lower interest rate or monthly payment. But it’s important to note that refinancing your federally-held student loans into a private loan makes you ineligible for the government-sanctioned programs above.
Keep reading to learn more about how you can avoid falling victim to student loan cancellation scams, as well as your legitimate repayment options like refinancing. You can visit Credible to learn more about refinancing your student loan debt.
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