IUPUI warns of student loan scams, explains legitimate options
INDIANAPOLIS (WISH) – IUPUI is warning that anyone with student loans could be the target of scammers.
The university says scammers are targeting college students and graduates, offering bogus deals to pay off loans quickly. Now IUPUI is offering free information sessions to help students avoid these scams and manage their loans.
The scams often pop up online, on Facebook or even in an email inbox. Officials say scammers prey on people who may feel like they’re drowning in student debt, with ads that offer easy student loan forgiveness or a quick repayment plan. But IUPUI warns these ads are almost always a scam.
The IUPUI Financial Aid Department is urging students to remember there are legitimate options for loan repayment or even loan forgiveness, and they are free to students. Fees are the biggest red flag people need to watch for when considering their options.
Nathan Lohr, with IUPUI Financial Aid, said if a debt repayment or forgiveness plan forces you to pay a fee to get started or a recurring fee once you sign up, people should not do it.
“Most of the info that you see is companies trying to make a quick buck on the back of students, and that’s not something that students have to deal with. There are free resources that they can work with to get the same sort of outcomes and not have to pay,” said Lohr.
Marvin Smith, Director of Student Financial Services at IUPUI, said one of the biggest misconceptions is that loan forgiveness itself is a scam.
“We’re trying to help our students to graduate from IUPUI, to deal with student loan debt and make sure they’re getting good quality information. We have to admit, it’s complicated information. There’s a variety of student loan repayment programs that are available to student loan borrowers,” said Smith.
Some people might qualify for an income-based plan, or a plan that would allow your loans to be forgiven after 20 years. If you work in public service, you also might qualify to have your loans forgiven after 10 years.
“It could be employment with a non-profit organization, it could be employment with a private non-profit that does service like law enforcement. There are a lot of opportunities that students have that they may not realize may qualify, but that do meet the qualifications and would make them eligible for forgiveness,” said Lohr.
It’s important to note, most of these plans are designed for short-term situations if you cannot make your payments. Making the minimum payments or doing an income based plan over the entire course of your loan will cost you more in the long run because of the accruing interest.
Smith said the most important takeaway is to reach out to your loan servicer, and don’t sign up for deals you find online.
You can learn about your options at IUPUI’s public information session, Wednesday afternoon from 3 p.m. to 4:30 p.m. in the Campus Center, Room 305. The next meeting will be April 22 from 5:30 p.m. to 7 p.m. at Campus Center Room 409.