The Federal Trade Commission shut down two fake student debt relief operations with millions of dollars lost in the schemes.
With more and more money being put into student loan debt and students getting ready to being their financial careers, it's important that they become aware of the ever-increasing number of fraudulent operations.
Up to $23 million from thousands of people who thought they were repaying their student loans was stolen by two fake companies, Mission Hills Federal and Federal Direct Group, according to the FTC. This is a growing phenomenon.
"When they're saying that you pay us and any time a company's telling you to pay them up front and they'll help you, get your loan balance down or forgive your student loans, that should be a red flag anytime you're having to pay a company money," said Tom Ternes, Bank of North Dakota education market manager.
Other warnings include offering to lower payments or exclusive repayment programs for upfront fees. Scammers are tailoring their schemes as well. Some using search histories and user data to target individuals looking for options out of desperation.
"It's more of just an awareness thing. The more people that are aware that there are scam out there when it comes to these types of situations. And I think that's the biggest key; how do you build an awareness for young people and people with student loans?" Ternes said.
The ultimate message is: if something seems too good to be true, it normally is. If you suspect fraud, contact either a bank or your loan provider.
The FTC also warns that scammers can fake government seals and identification, and that students should never share their Federal Student Aid ID number with anyone.