Student Loan Scams
Updated: Aug 2
Throughout the year, the U.S. Department of Education is revitalizing student loan repayment. They have developed a central loan servicing agency through which all taxpayers are able to pay back their student loans. They will also be assigning a servicer to each persons’ account for management purposes. At the same time, the government has forgiven many student loan balances or paused payments amid the pandemic, although they are set to resume shortly.
Unfortunately, all of these changes have caused the perfect storm of confusion allowing scammers to trick unsuspecting individuals with student loan scams. Scammers are deceiving individuals by convincing them they are helping to refinance their student loans when they are actually stealing their personal information.
How to Spot Student Loan Scams
Skepticism is always important as it acts as a safety net in today’s society where not everyone has good intentions. It is always important to be skeptical, but now more than ever taxpayers should be wary. If a phone call, email, or letter seems off chances are it is a scam. Individuals who think they have been contacted by a scammer should call their loan servicer directly. It is important to note that someone contacting you who has information on your student loan (such as the total balance), does not mean they are from the Department of Education.
Scammers know this information because they are illegally accessing credit reports and using them to find information such as student loan balances. Some scammers claim to be part of the “Biden loan forgiveness” or “Cares Act Loan Forgiveness.” Neither of these are real programs. One red flag is the request includes charges to refinance a loan. Federal programs will not ask for extra payments or fees. Most importantly, personal information should never be given over the phone, it should only be given using a secure portal. Also, any emails should be from a website that ends in .gov.
What to Do if You’re a Victim
If you have been contacted by a scammer you should immediately take steps to protect yourself from further loss. If information was given out, immediately freeze or close any bank accounts and credit card accounts the scammer has been given access to. Be sure to change federal student aid ID passwords the scammer may have stolen. Check credit reports as well to make sure there is no suspicious activity and put a fraud alert on your credit report. Even if no information was given out it would be prudent to monitor your credit score.
Contact Us with Your Questions
If you have questions or believe you are the victim of a student loan scam, contact our professionals at BrightBooks USA at 203-987-4111. Or contact us online via our contact form.