Protecting Yourself from Student Loan Forgiveness Scams
As millions of Americans prepare to resume their student loan payments after a pandemic-induced break, a concerning trend is on the rise—student loan forgiveness scams. Scammers are taking advantage of borrowers’ confusion and anxiety, posing a significant threat to their financial well-being.
The Scam Epidemic
An Alarming Trend
Statistics from Transaction Network Services (TNS) reveal that over 350,000 student loan-related robocalls have inundated borrowers in just the past two weeks. The post-pandemic return of student loan payments has created a breeding ground for scammers.
Chaos and Confusion
The Supreme Court’s decision to block President Biden’s plan to forgive up to $20,000 in student debt per borrower has left many borrowers in a state of bewilderment. Scammers thrive in such an environment of chaos and confusion.
How Scammers Operate
Fraudulent Practices
Scammers employ deceptive tactics to coax borrowers into revealing private information or paying upfront for services that are supposedly free. Common scams involve posing as loan servicers and making enticing promises, such as reducing monthly payments, deferring repayment, or guaranteeing complete loan forgiveness. Impersonating the Department of Education or using misleading titles like “student services” is also prevalent.
A Typical Scam Call
A typical robocall transcript might sound like this: “This is United Services Student Loan Department with an urgent call to our clients regarding the new federal program, which now qualifies for complete dismissal and full discharge of all your federal student loans, as well as a refund of monies paid and removal from credit history,” as reported by TNS.
Protecting Your Student Loans
Know Your Loan Management
Due to loan servicer changes during the pandemic, many borrowers are unfamiliar with their new loan management organizations. Scammers exploit this confusion by impersonating new student loan servicers. To verify the legitimacy of any calls or emails regarding student loans, contact the Federal Student Aid Information Center or your loan servicer.
Watch for Red Flags
Borrowers should exercise caution by scrutinizing email senders and phone conversations for signs of fraud, such as misspelled words or grammatical errors. The Federal Trade Commission (FTC) advises students never to pay upfront for assistance with their student loans.
Frequently Asked Questions about Beware Of Soaring Student Loan Forgiveness Scams Offering Total Debt Elimination
Q1: How can I confirm the legitimacy of a student loan call or email?
A1: Contact the Federal Student Aid Information Center or your loan servicer to verify the authenticity of any communication regarding your student loans.
Q2: What should I do if I suspect a student loan scam?
A2: Report the scam to the Federal Trade Commission (FTC) and cease all communication with the scammer.
Conclusion
As the United States prepares to resume student loan payments, borrowers must remain vigilant against increasingly sophisticated scams. Equipped with knowledge and awareness, they can safeguard their financial future from opportunistic con artists.
