One day, your student loans are forgiven, but then, the next day, they're not. Confused? You're not alone. The recent whirlwind of student debt relief efforts by the Biden administration, followed by legal battles, has created a perfect storm of confusion for borrowers. Unfortunately, amid all this chaos, scammers are seizing the opportunity.
Let's not beat around the bush – your student loans are gearing up for a restart this October after a three-year pause. As we approach this critical date, it's essential to be aware that complaints about student debt relief scams are skyrocketing.
In this blog post, we'll delve deeper into the growing threat of these scams, what borrowers should be vigilant about, and how to protect yourself from falling victim to these deceitful schemes. If you're hoping for student loan forgiveness, be wary of these six warning signs of student loan forgiveness scams:
- Promises immediate student loan relief
- Demands payment up front
- Requests sensitive information like your SSN
- Claims affiliation with a government agency
- Utilizes high-pressure sales tactics
- Asks for power of attorney through a signed form
1: The Escalation of Student Loan Scams
- The Perfect Storm: With over 44 million borrowers collectively owing more than $1.7 trillion in student debt, student loan debt relief has become a hot topic. Scammers view this as an opportunity to exploit vulnerable borrowers.
- The Confusion Factor: The continuous flow of policy changes, legal decisions, and news about student debt relief has left borrowers bewildered. This confusion has made it easier for scammers to deceive individuals with their fraudulent schemes.
2: The Tactics Employed by Scammers
- Telemarketing Calls: Numerous student loan scams originate from unsolicited telemarketing calls. Scammers promise debt relief in exchange for a fee and often request sensitive personal information.
- False Affiliations: Scammers frequently pretend to be affiliated with the U.S. Department of Education or legitimate loan servicers. Some even drop the term "Biden Loan Forgiveness" to appear credible.
3: Identifying a Student Loan Scam
- Safeguard Your Personal Information: Never divulge sensitive data like your Social Security number to anyone you suspect might be running a student loan scam. Legitimate loan servicers do not require this information upfront.
- Verify the Caller: If you receive a call from your loan servicer, disconnect and call them back using the official contact information provided on their website. This ensures that you're communicating with the right person.
- Exercise Caution with Department of Education Calls: Direct calls from the Department of Education are unusual. When you receive such a call, approach it with skepticism and verify the caller's identity.
- Watch Out for Email Spoofing: Scammers have grown more sophisticated, even spoofing email addresses of legitimate loan servicers. Always double-check email addresses and links by hovering your mouse over them.
4: Insights from the Federal Trade Commission (FTC)
- Protect Your FSA ID: Never share your Federal Student Aid (FSA) ID login information with third parties. Scammers can misuse this information and even steal your identity.
- Don't Trust Promises of Loan Forgiveness: Exercise caution when encountering anyone promising debt relief or loan forgiveness, even if they claim to represent the Department of Education. Instead, log into your student loan account to explore your options.
As the restart of student loan payments looms, borrowers must maintain vigilance against the growing threat of student loan scams. By following the tips and guidelines outlined in this blog post, you can safeguard yourself from falling victim to fraudulent schemes. Remember that staying informed and cautious is your best defense against these scams, and legitimate loan servicers will never demand upfront fees or sensitive personal information over the phone.
