Scammers are circling back after the recent announcement of the one-time federal student loan debt relief plan. With the application for debt relief rolling out any day now, it is important to make sure you are getting information directly from the Department of Education.
What to Look Out for in the Latest Student Loan Scams
- You might get an offer that seems legitimate because the scammer convinces that they are affiliated with the Department of Education or your loan servicer.
- If a scammer contacts you to “help”, they might know something about your loan (your balance or that you recently consolidated). However, the scammer will ask you to confirm that info as a way to get you to share even more details they can use.
- The “debt relief application” a scammer provides is sometimes a direct deposit or Power of Attorney form — which lets the scammer start taking money from your bank account.
- A scammer might ask for your FSA ID, or access to your account. If you can’t get in to see your loan balance, you can’t tell that a company might be charging you while your real student loans go unpaid (and unforgiven).
How to Avoid Student Loan Scammers
- Don’t pay anyone to help you apply for loan forgiveness. This program is completely free — and the only way to apply is at StudentAid.gov. Sign up for Department of Education updates to find out when the application officially opens.
- Don’t give away your FSA ID login information. If anyone says they need your FSA ID to help you, that’s a scam. They can cut off contact between you and your servicer — and even steal your identity.
- Don’t trust someone who contacts you saying they’re affiliated with the Department of Education. Scammers use official-looking names, seals, and logos. They might even promise special access to repayment plans.
- If you are not sure if the “offer” is legitimate, hang up and call your federal student loan servicer directly.
The U.S. Department of Education announced an extension of the Federal student loan payment pause, now through August 31, 2022. In addition, although it has been in the news and discussions of possible loan forgiveness for all borrowers, this is not official yet.*
Student loan debt relief scammers are convincing borrowers that they are qualified for a federal loan forgiveness program, but actually take their personal information to steal the money and their identity.
How you can protect yourself from becoming involved in this scam:
- Stay alert and wary. A scammer will likely promise fast loan forgiveness.
- Become educated. Scammers can fake a government seal. There are public service loan forgiveness programs, but not any official for federal loans yet.
- Do not share your FSA ID. Scammers may claim they need this information to help you, but could actually get into your account and steal your identity.
- Never pay an upfront fee for help. Contact your loan servicer for any questions about loan repayments.
NOTE: If there eventually is a broader federal student loan debt forgiveness plan, it will officially be announced from the Department of Education.
If you suspect or become the victim of a scam, report it to ReportFraud.ftc.gov.
*Scammers are Offering Student Loan Unforgiveness, Terri Miller, Federal Trade Commission.