Before I get going here, I need to just say a few things to put something in perspective.
First off, I’m a bit of a cynic. I barely trust anyone who I haven’t met in person for a while, and I CERTAINLY don’t trust random “people” on the internet or over the phone. I have applied much of this cynicism to the way I handle my money, meaning I don’t trust anyone enough to handle it for me. I certainly don’t trust anyone who asks me for money either.
So with that said, I cannot understand how people are falling for these student loan scams (the ones done over phone). I hear about them all the time, and they are just baffling to me. The cynic in me wants to grab these people and say “What were you thinking??”
For starters, I get like 18 calls every day, offering me life insurance (I’m not even 30), telling me my house got broken into (I don’t own a house), or telling me my niece is lost in the Dominican Republic and needs $5k for survival (you guessed it, no niece).
The call about my student loan debt isn’t going to phase me or make me think twice. In fact, I’ll never hear it because I won’t pick up. Know that your phone number is out there online, and people are finding it and calling you for whatever reason they can think of that might make them a few dollars, legitimate or not.
Let’s get back on topic. You’ve got random companies calling people up and claiming they can erase or significantly reduce your debt balance. Sounds like an awesome plan. They say, “But wait, you need to pay us $250 up front, then we can help you…”
$250 is a full monthly payment for a lot of people, myself included! Why on earth would any company require you to pay them the rough equivalent to an average monthly payment on a student loan? It gets better because in return they’ll “significantly reduce” your payments here on out??
That makes no sense. A fractional value of a student loan is suddenly going to rid you of your student loan debt? No deal for me.
To me, it is a clear lack of understanding and know-how when it comes to student loan debt, or any debt for that matter. Take that $250 and put it towards your loan balance by yourself during an off week. That will actually help make headway on your debt! Don’t pay the scheming, random dude from the magic solution hotline.
What makes this worse is that this lack of knowledge comes from a group of people who attended some form of college. This is a group of people that should understand student loans the most out of anyone. At the very least, I’m assuming they’ve been on the internet where they could learn about the basics of repayment, or they could have at least heard about a student loan scam once.
Now, I’m not being fair. I know this. There are people out there who might be more naïve than others. There are people out there without the same level of access to the internet. Some people don’t get the same education growing up, and there’s much more I could list off.
HOWEVER, life isn’t fair. This fact perfectly explains why a certain group of people decided to scheme another group of people who happen to have a stake in the second leading form of debt. I’ve learned early on that humans lie, and I think just about anyone can learn that from experience.
These scammers capitalize on misinformation by lying. They take advantage of legitimate processes and options, like getting relief from a federal debt consolidation loan, and they promise something that sounds similar without any legal or legitimate stake in the actual process. That deceptiveness dupes people.
This has been somewhat of a rant, so I’ll digress a bit.
Financial scams are out there, and that fact won’t change. And as far as I can see, student loan debt itself isn’t going anywhere anytime soon either. Student loan scams will always be a prevalent force to reckon with, especially with tens of millions of potential victims.
A student loan borrower is a part of an enormous target group. The worst part about it? They’re part of a desperate group, too. If you’re in that group, you need to understand that you’ll be targeted for your student debt problems because you’re a part of that group that might just drink that Kool-Aid.
However, a scam is only as powerful as its victims, meaning the actions of student loan borrowers drive their success. Knowing this, you should think twice before telling someone your personal information over the phone. The first defense is hanging up the phone.
It pays to know your repayment options coming out of college. You have way more than one option from the Federal government, including income-driven repayment plans, debt consolidation loans (from the Federal government DIRECTLY, no one else), standard repayment plans, and even some rehabilitation programs to help you when you’re already in trouble.
A key part of all this is that federal programs require you take the initiative. The government isn’t calling people and trying to get them to sign up. Their services are offered to people who need it, and it’s on them to apply. It is on you to apply. A middleman is not required. Remember that!
One more note, student debt is a huge responsibility. You’re expected to pay them back as an adult. Aside from the lottery, there is no easy solution. If you have rent to pay for or a mortgage, then it’s probably going to take ten years of monthly payments to get rid of them. If you can accept that, then you won’t think twice about a phony phone call.