Student Loan Forgiveness is Here and So are the Scammers
08/29/2022
Summary
This August the Biden Administration announced that Federal Student loans would not only receive an extended pause through December 31st, but would also cancel up to $20,000 of Federal Student Loan debt for those who are eligible. As many Americans will apply for this new debt relief program, there is a high potential for a rise in scams targeting those who are searching for this debt relief. According to the director of the Rockford Regional Office of the Better Business Bureau, Dennis Horton, “As student loan holders navigate the new forgiveness program, con artists will undoubtedly be there to take advantage of any confusion. It happens with any big government initiative, including the eviction moratorium and pandemic relief programs. Always be sure to do your research before sharing any personal information”.
To avoid student loan forgiveness scams the BBB released these important tips to remember:
• Get to know the terms of your student loan and the relief program before acting. Always do your research before sharing personal information. Be sure to understand the ins and outs of your specific loan, as well as how student loan relief impacts you. Go straight to official government websites, such as ED.gov and studentaid.gov, for information.
• Never pay money for a free government program. Scammers often trick victims into paying for free government programs – or they claim you can get additional benefits, faster benefits, etc., for a fee. A real government agency will not ask for an advanced processing fee. These are all red flags of a scam.
• Be wary of out-of-the-blue calls, emails or text messages claiming to be from the government. In general, the government will not contact you using these methods unless you grant permission.
• Watch out for phony government agencies or programs. If you speak to someone claiming to be a government representative who is offering you student loan relief, do some research before you agree to anything. Scammers often make up look-alike government websites that sound similar to legitimate agencies or programs.
• Think something seems suspicious? Reach out to the agency directly. If you have any concerns about an alleged government representative's legitimacy, hang up the phone or stop emailing/texting. Then, report the suspicious calls or messages. Then, find the official contact information (look on ED.gov and studentaid.gov or other official sites) and call to verify.
• Be careful, even if the information comes from a friend. Even if a close friend or family member you trust sent you the information regarding student loan relief, make sure the claims are real first. During the COVID-19 pandemic, BBB received many reports of hacked social media accounts being used to spread government impostor scams.
Sources and more information
Check out our StudentChoice resource center for a quick overview of the federal student loan pause and loan forgiveness:
Federal Student Loans - What You Need to Know Now - Credit Union Student Choice
Horton, Dennis. “Student Loan Forgiveness is Here- So are the Scammers.” August, 26, 2022, BBB: Start with Trust® | Better Business Bureau®