By Abigail Mason

LendEDU

You’ve probably gotten an e-mail, a phone call, or seen an online advertisement for student loan forgiveness programs — often referred to as the Obama Student Loan Forgiveness Program. It seems like these ads and e-mails are everywhere and the possibility of getting your loans forgiven is likely very tempting and might make you want to click on the link and learn more.

Don’t do it! These e-mails, phone calls, and ads are part of a popular scam preying on desperate student loan borrowers who are struggling with repaying their loans or are in default. The scam depends on borrowers’ lack of information in order to work – so it’s critical to be able to see through their claims in order to figure out how they’re trying to defraud you.

The first thing you should know is that there is no Obama Student Loan Forgiveness Program and that student loan forgiveness is actually quite rare and difficult to obtain.

So, what do these scam companies contacting you do? They often offer to help you apply for forgiveness programs or income based repayment plans for a fee. According to a recent study by NerdWallet, the average customer of these fraudulent companies was charged $600.

If they offer to help reduce your payments, they likely are just going to help you apply for an income based repayment program – something you can do yourself for free by logging into your student loan servicer’s website or calling them.

If you do get taken in by one of these companies, you might not just face a hefty charge on your credit card, but you might also face other consequences. For example, if you gave them your credit card or your Social Security number, they could try to defraud you further or even steal your identity.

So, if student loan forgiveness isn’t possible and you’re still struggling to pay student loans, what are your options?

1. Switch to an Income Based Repayment Plan

Income based repayment plans allow qualified borrowers to pay just 10-20 percent of their income every month towards their loans. This can often greatly reduce your monthly payments and make them more manageable. After 20-25 years of payments, your loans would be eligible to be forgiven.

This plan can be helpful, but just be aware that by drawing your payments out, you will end up paying far more in interest over your repayment period. For that reason, you might decide to pay your loans via an income-based repayment program for a while and then switch to another more aggressive repayment plan later on.

2. Defer or Forebear Your Loans

If you are having a difficult time repaying your student loans because you’re in school, you lost your job, you’re experiencing financial difficulties, you became ill or disabled, or you’re in the military – then you might qualify to defer or forebear your student loans.

When your loans are in forebearance or deferral, you do not have to make payments on them. The downside is that interest will continue to be charged on your loans while you’re not making payments, unless you have Perkins loans which do not charge interest during periods of deferral.

3. Refinance Your Loans

If you’re having a hard time repaying your student loans, you might want to think about refinancing them. If you have good credit and a stable income, then you can likely qualify to refinance your loans at a much lower interest rate. You will save on interest and pay less overall on your loans.

If you’re aggressively paying back your loans – you’ll be able to do so faster since you will be putting more towards the principal. You can also choose to extend the life of your loan over a longer period of time to reduce your monthly payments.

4. Look into Forgiveness Programs

While the majority of borrowers do not qualify for student loan forgiveness programs, there are a number of federal and state programs that do offer to forgive your loans.

The most well-known program is the Public Service Forgiveness Program. If you work for the government or a non-profit, you can have any remaining debt forgiven after you make 120 on-time payments.

Other programs that are popular are forgiveness programs for teachers and for those who have disabilities. There are also programs that are for people in the military.

The Bottom Line:

The student loan forgiveness options promised by scammers sound very appealing but are too good to be true. Luckily, there are a lot of ways to get help on your student loans if you’re facing financial difficulties. The next time you encounter a scammer – delete their e-mail, hang up the phone, or don’t click on the ad!

LendEDU is a content partner of the Salisbury Post providing news and commentary. This content is produced independently of the Salisbury Post.