Trying to pay off your student loan from your engineering degree?
Engineering degrees are expensive; according to US News & World Report, in 2014 the annual in-state, full-time tuition rates for the top engineering schools ranged from $13,509 for University of California - Berkeley to $47,940 for Stanford University.
Recent studies say that 70 percent of college graduates leave school with student loan debt averaging $33,000. Taking advantage of this situation, unscrupulous and unethical student debt relief companies are popping up everywhere.
Don’t get scammed! Here are a few things to watch out for when looking at options for repaying that student loan:
Be Wary of Exorbitant Fees
Scammers prey on your anxiety, promising to clear your debt for steep fees. Many scammers promise lower rates or debt elimination in exchange for hefty fees ranging from $600 to $1,200.
Don’t Cave in to High-Pressure Tactics
Scammers may pressure you with “limited-time” or “exclusive” offers. Often, these companies put you into loan deferment, which may seem to solve the problem for the short term but does not benefit you in the long run. There are no special deals when it comes to student loan repayment.
There is No “Forgive and Forget”
Scammers may propose instant loan forgiveness, which can sound very tempting. These companies may ask for your private data and charge a fee, which can seem like a small price to pay to wipe out debt. In reality, instant forgiveness doesn’t exist, and any promises to do so should serve as red flags.
In rare cases, some borrowers with a permanent disability can obtain forgiveness, but this process involves detailed monitoring and can only be granted directly through the Department of Education. Forgiveness programs for public service employees, nonprofit workers and teachers are available, but these commonly require 5 to 10 years of service within the industry.
Don’t Give Your Power Away
Scammers may tell you they require power of attorney to reduce your debt, but this enables them to alter your student loans without your consent. You do not want authorization to fall in the wrong hands.
Don’t Take Unsolicited Calls
Steer clear of cold calls from so-called debt relief companies. Your student loan servicer will not contact you in an unsolicited manner, nor will a nonprofit debt counseling agency.
Always Check Credibility
Check the Better Business Bureau at bbb.org to verify the credibility of an organization. Fly-by-night companies will not be registered with the Better Business Bureau.
What Should You Do?
Your best bet is to work directly with your student loan servicer or a nonprofit counselor to identify the best repayment options. Do this as soon as possible - waiting just makes the problem worse.
Manage Your Repayment Process Yourself
If you have federal student loans, you can manage the repayment process yourself for free at studentloans.gov. Once signed in, the website will help you manage, track and estimate your repayments.
Contact a Non-Profit Student Loan Counselling Agency
Non-profit agencies provide objective, one-on-one assistance to help you navigate the system and help you to work with loan servicers. They charge half the rate, and offer a much more comprehensive service.
For more information on student loans and repayment options, visit Take Charge America.