Student loan scams are on the rise, BBB says

LOUISVILLE, Ky. (WDRB) -- Scams targeting young people with school debt are on the rise.

It's so bad in Kentucky that the Attorney General's office has issued an official scam alert.

"We get phone calls about student loan scams every day, every week," said Mindy Eaton with the Better Business Bureau.

Fraudsters are trying to convince people they're eligible for loan forgiveness, and in some cases, they say payments can be completely wiped out.

"If the deal sounds too good to be true, it is," Eaton said. "Unfortunately, you're not going to get your loan forgiven just right off the bat."

The calls can be convincing, and many leave callback phone numbers and case reference numbers. That person on the other end of the line might seem helpful, but what they really want is your money and your personal information. Many times, they'll offer to fill out the loan forgiveness paperwork on your behalf for a fee.

"If someone is asking for some kind of payment up front in order to process the forgiveness, whether it's for pre-paid taxes or application fee or something like that, those are always scams," Eaton said.

It's actually illegal for companies to charge upfront fees before providing debt relief services. Never give a payment or reveal any personal information like your birth date, social security number or FSA ID number over the phone.

"If you get an unsolicited call, the best thing to do is hang up contact the lender directly to see if that is a program that they are providing or not," Eaton said.

For more tips to avoid being conned by scammers, click here.