Calls and texts from individuals claiming to have the ability to erase student loan debt are on the rise. The Department of Education estimates that 45 million people currently have student loan debt totaling more than $1.5 trillion, with deadlines continuously looming, one after the other, on the pandemic loan payment pause. The most recent deadline, which was set to expire in May, has been extended until August 31st, 2022.
But with each deadline, the thought of resuming payments and the weight of so much debt has created tremendous stress. With many Americans holding out hope that their student loan debt will be reduced or forgiven altogether, but also struggling to keep up with the latest news from the federal government, it’s not hard to see why scammers have been so successful. That’s why we are highlighting five ways to protect yourself from fraudsters pretending to have the power to provide you with student debt relief.
- Use legitimate sources to stay up to date with the latest developments in student debt relief news. The government website studentaid.gov covers recent student loan news in its announcements section. On this website you will find this student aid article, How to Avoid Student Loan Forgiveness Scams that not only sums up what to look for, but also provides the names and contact information for legitimate federal student loan servicing companies. Unsolicited phone calls or texts from people that claim to know developments not covered on the government’s official student aid website are unlikely to be legitimate. These scammers prey on confusion, so make sure you are clearly informed on the latest news. Some will claim that they have information that hasn’t been released yet and that you must pre-enroll immediately to take advantage of maximum savings. When your money is concerned, it’s always a good idea to be cautious and skeptical. Contact your student aid provider to verify the legitimacy of any offers you receive.
- Never provide a credit card number or other forms of payment for a processing cost, final payment, or other fees. As always, never give out your credit card number to anyone making you promises over the phone or internet. It is illegal to require a fee up front for any loan relief service. And, according to this article by the FTC, “There’s nothing a company can do that you can’t do yourself – for free.” Remember, if it sounds too good to be true, it probably is.
- Keep your personal information private. Your actual loan service provider already knows your basic personal information, so they do not need to ask for it from you. They will also never ask for your username, password, or FSA ID. This is a very real secondary risk of these student loan scams, which may be even more damaging. The caller will seek to obtain personal information that can be used later to commit identity theft, or sold on the black market to others who will do the same. Never give out your birthdate, Social Security number, driver’s license number, or banking information to someone on the phone. And as stated above, there should never be a need to do so when talking to a legitimate source helping you with your student debt.
- Watch out for pushy service representatives or quickly looming deadlines. Any true loan relief will not come in the form of intimidating phone calls or require a quick 24-hour turnaround. If relief becomes available for millions of Americans, you can expect to have plenty of time to participate in the provided services. Legitimate assistance will not be limited on a first come, first served basis. To hear examples of what these scam calls can sound like, click on this article from NPR.org.
- Warn others on your loan accounts about the potential for scams. Often, scammers won’t stop at the primary person named on the loan. In many cases, parents of loan account holders are also getting phone calls and texts promising relief. Sometimes parents or grandparents are more vulnerable to phone scams because they may be carrying the burden of debt for a college student. These family members are also more likely to have money to pay scammers for the promise of “professional” help to solve the debt dilemma. Be sure to keep your family and friends informed about student loan scams and what to watch for.
If you think it’s too late and you might have already fallen for a false promise of relief, there are a few things you can do to protect yourself from further damage. If you’ve made a payment, call your bank immediately and put a hold on your account so the scammers are not able to access any more of your money. Call your student loan service provider and explain what has happened. They can give you the best next steps to get back on track. You can also report your experience to the Federal Trade Commission at reportfraud.ftc.gov. If you have given a scammer personal information which puts you at risk of identity theft, we can help by putting you in touch with a professional Identity Recovery Advocate who can help you place fraud alerts and tell you what to watch for. And, as always, if you become a victim of identity fraud for any reason as a HomeFREE Checking account holder you are eligible for fully managed Identity Theft Recovery, which means an Identity Recovery Advocate will work on your behalf to help you dispute and reverse the damage of identity theft.
Carrying large amounts of student loan debt can be scary, especially in uncertain times. Don’t let scammers prey on your anxieties and cause even more harm. Remember, If you need assistance managing your student loan debt, you can apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education by visiting studentaid.gov or your loan servicer at no cost. Assistance from a third party is never required.