Beware of student loan scams, BBB warns

RALEIGH (WTVD) -- It's graduation time and for many graduates that will mean it's time to start paying back those student loans.

There are several student loan scams to watch out for. The BBB of Eastern North Carolina warns against many ads selling student loan forgiveness.

"If it's too good to be true it probably is," said Alyssa Parker from the BBB. "That's a huge red flag, if someone says that I can get rid of your student debt in minutes."

First, Parker suggests seeing what you can do on your own for free. People can check directly with the U.S. Department of Education and apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs-all at no cost.

"It may take a little bit more time, but you can do it yourself," said Gutierrez.

For help repaying federal student loans, use https://studentaid.ed.gov/sa/repay-loansstudentaid.gov/repay.

If you do choose to hire a third party to help with your loans, Parker said to be wary of verbal offers. Always have companies send you an offer in writing, and then contact the U.S. Department of Education to make sure the offer is good.

Most legitimate lenders won't ask for a fee upfront. Instead, they'll take a percentage once the job is done. Parker also says to never give a third party the power of attorney.

"That is when they get your personal information and they can do things on your behalf that you may not know they are doing," Parker said. She adds a fraudulent company could use this to take control over your existing loans.

Before agreeing to help from any company, do research on them and check out the business profile on BBB. Also be sure to read reviews from past customers.

If you are currently in high school or college and considering taking out loans, make sure you understand what you're getting yourself into.

"Know what you're getting into ahead of time, know that you are going to have to owe money afterward, and if you do owe money, know some things that you can do try to help your student loan debt and understand that there are scammers out there that are going to try to take advantage of you," Parker said.