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College loan scams targeting graduates | Crime

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College loan scams targeting graduates
Crime, News
College loan scams targeting graduates

LITTLE ROCK, Ark. (KTHV) - As more and more students rack up college loan debt, scammers prey on their vulnerability. One recent college graduate is out hundreds of dollars after someone convinced her to shell out money to decrease her debt.

College loan debts account for the second highest form of consumer debt behind mortgages and are expected to increase not just in number but also in amount. Which is why, when recent grads hear someone can help them with that debt, they jump at the opportunity.

"They just took advantage of someone who just got out of college and did not know what to do," said Holly Morrison.

Morrison graduated from the University of Central Arkansas in May with $45,000 in debt.

"He just started talking about this is how much your debt is," said Morrison.

In August, she got a call from a company saying it could help her consolidate her loans.

"From there just started telling me that there is a processing fee," said Morrison. "And then there was going to be a service fee. And an upkeep fee."

By the time everything was said and done, Morrison says she was out more than $500 for the upfront fee and the first monthly fee.

"Enraged," said Morrison. "I just wanted to start bawling."

"It can be very confusing for a student trying to make ends meet," said Senior Assistant Attorney General Sarah Tacker.

The Attorney General's Office says like any scam, the scammers will make contact either by phone, by mail or e-mail. And they will use generic names for their company.

"The names are very interchangeable," said Tacker. "And this week they might be using Student Debt Relief. Next week they might be using Student Loan Assistance."

Tacker says the companies will try to pass themselves off as federal or state assistance programs.

"They are more interested in getting money than they are in helping anyone pay back their student loans," said Tacker.

Tacker says the assistance the companies offer for a fee, often times are available for free.

"Anytime where you are asked to shell out money to seek debt assistance, you need to be very skeptical," said Tacker.

And if you end up shelling out your money for that assistance, Tacker says chances are you will not get it back.

Morrison added, "Yeah. It is unfortunate."

An unfortunate situation that Morrison wants others to hear about.

"I just hope that recent graduates will learn from my mistakes," said Morrison.

Again the red flags for debt assistance are an upfront fee and a monthly fee. The U.S. Department of Education and the Arkansas Student Loan Authority both offer legitimate and free assistance.

Crime, News