Student loan holders, be wary of out-of-the-blue calls. The rollout of the Biden Administration’s plan to cancel some federal student loan debt has begun, and scammers are finding convincing ways to take advantage of any confusion. Victims are telling the Better Business Bureau (BBB) Scam Tracker about a loan forgiveness scam where the caller has their Social Security number, graduation date and even federal student aid information.
How the scam works: You receive a call or voicemail from someone claiming to represent the new student loan forgiveness program. The scammer insists they can help you secure tens of thousands of dollars in loan forgiveness. According to one recent BBB Scam Tracker report, the con artist promised to erase $60K of the victim’s student loan – an amount well beyond the Biden Administration plan.
These callers have a convincing amount of information as well as “all kinds of numbers and figures to tell you what you’re going to save,” according to recent BBB Scam Tracker reports. One report said the caller “not only had my email address but also the name of the school I attended and the last 4 digits of my social security number.” Another victim reported that the scammers “somehow knew my FAFSA account info and made me believe they work in conjunction with the loan forgiveness program.”
In most versions of this scam, the caller insists you need to pay them an initial fee – typically several hundred dollars spread over a couple of months – followed by smaller monthly payments. Then, when the current pause on the loan forgiveness program ends, your loan will be forgiven. Unfortunately, these con artists have no association with the official student debt relief plan. Anything you pay will go into the scammers’ pockets and will do nothing to help relieve your student loans.
How to avoid student loan forgiveness scams:
- When in doubt, contact the government agency directly. If you receive a message that seems legitimate, but you aren’t sure, stop communicating with the person who contacted you. Then verify their claims by contacting the government agency they say they represent. For details on the student loan forgiveness program, visit ED.gov or StudentAid.gov.
- Never pay fees for a free government program. Government agencies will never ask you to pay a fee to benefit from a free government program. Don’t let scammers persuade you otherwise. Con artists might say the fee will get you relief faster or will unlock additional benefits, but that is all part of the scam.
- Think twice about unsolicited calls, emails or text messages. Usually, government agencies won’t reach out to you unless you request it. Out-of-the-blue communications are a red flag.
- Don’t give in to scare tactics. If someone claims you’ll miss out if you don’t act immediately, be wary. This urgency is an all-too-common tactic scammers use on their victims. Instead of responding, stop communications until you can verify what they say is true.
For more information: Get more solid advice by reading “BBB Tip: Student loan forgiveness is here. Here’s how to avoid scams” – https://www.bbb.org/article/news-releases/27471-bbb-tip-student-loan-forgiveness-is-here-heres-how-to-avoid-scams. You can also read up on government impostor scams in this BBB study and learn how to spot a scam.
For information on federal student loan repayment options, visit the official government website, StudentAid.gov – this is the best way to determine if you qualify for loan forgiveness and how to receive it.
If you spot a student loan forgiveness scam, report it. Sharing your experience on BBB.org/ScamTracker can help other consumers spot the scam faster.