If someone in your family has a student loan, chances are they have a loan servicing company handling it.
But what if that company turned out to be a fraud?
It turns out that thousands of students may now be on the hook for unpaid bills.
All valuable information so you don't waste your money.
Many of us have student loans that we have been paying off for years.
So imagine learning that the company you faithfully sent your money all this time to turned out be a big fraud, and was never paying down your loan at all.
Unfortunately everything is not OK in Karen Morris' home.
She's received a letter from the FTC.
Informing her that it's freezing the assets of her student loan servicing company, Mission Hills Federal.
The Federal Trade Commission was closing them down because it was a student loan scam.
The FTC claims Mission Hills took in more than $23 million from college grads like Morris, but then failed to repay their student loans.
Worse, the U.S. Department of Education now tells her it will take her tax return or garnish her wages to get the money she owes.
"Now students loans wants to take my tax return!,” she said, adding she owes $2,000. “And they are going to take my tax return this year."
Sadly, this is not an isolated case.
Loan servicing scams and loan forgiveness scams target thousands of students every year.
So what are the warning signs that your loan company may not be on the up and up?
Nerdwallet.com says warning signs of a loan repayment scam are:
- Upfront fees
- Promises of loan forgiveness
- The company advertises on social media
- The company has a high number of complaints.
"No, it's not fair,” she said. “I was doing what I was supposed to do and paying my student loans back every month. That was my agreement."
No one answered Mission Hills phones when we called.
And the Department of Education tells us they are investigating to see if any of this debt can be forgiven.
Until then, don’t waste your money.
