The Biden Administration recently announced that the federal government will cancel up to $20,000 of federal student loans per person. Millions of Americans will be recipients of student loan debt relief. Unfortunately, this creates an excellent opportunity for scammers. In fact, a BBB employee received a call about a student loan forgiveness opportunity just one day after the announcement was made, yet she doesn’t have a loan.
BBB has been anticipating these calls, texts, emails since students were told that their student loan debt was being placed on hold during COVID. As student loan holders navigate the new forgiveness program, we know con artists will be there to take advantage of any confusion. It has happened with all big government initiatives, including the COVID-19 vaccine roll-out, eviction moratorium and pandemic relief programs.
BBB offers the following tips to help individuals avoid student loan forgiveness scams:
› 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 you’re aware of which loan servicer currently owns your loan, which could have been sold more than once since you first secured it. Use contact information you know to be valid for your loan servicer to reach out and learn more.
You’ll also want to be sure to understand the ins and outs of your specific loan, as well as how student loan relief impacts you. You can use official government websites, such as the Department of Education’s websites at 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 never 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 who is claiming to be a government representative and 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, find the official contact information (look on ED.gov and studentaid.gov or other official sites) and call to verify. Then, report the suspicious calls or messages.
› 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 and this has continued to be reported in many fraud cases.
You can read more on BBB.org about scams targeting recent college graduates and government impostors. You can also receive further insight by reading BBB’s tips on loans and credit repair services.
If you’ve spotted a student loan forgiveness scam (whether or not you’ve lost money), please report it to BBB.org/ScamTracker. Your report can help others avoid falling victim to scams.
You can reach your BBB at 423-266-6144.
Michele Mason is president of the Better Business Bureau in Chattanooga.