Student loan repayment is making headlines — and so are student loan scams. Whether it’s federal extended repayment pauses, loan forgiveness programs, or other forms of student debt relief, borrowers are likely to click through for details. While student loan borrowers are eager to learn ways to trim their debt, scammers are eager to get information from them to fatten their wallets.
You can outsmart these bad actors by understanding how student loan scams work.
What is a Student Loan Scam?
A student loan scam makes false promises to potential and current student loan borrowers. Scams typically involve a crook knowingly giving inaccurate information about a student’s eligibility or repayment options in order to get them to reveal confidential information. Fraudsters twist details about federal student loan and private student loan programs to suit their needs.
Signs of a Student Loan Scam
Criminals do everything they can to convince you they have THE answer to financial problems. But their “answers” are lies designed to get you to either reveal confidential information or send them money. Most schemes work because they create the illusion that there is only one solution – the one that costs a “small” fee.
Beware of these common signs of a student loan scam.
- Guarantees of loan forgiveness if you claim the loan doesn’t belong to you
- Promises of eligibility for loan forgiveness when you were previously told you were ineligible
- Demands that include sharing your Federal Student Aid (FSA) ID
- Fees that must be paid to apply or determine eligibility for a program
- Communication out of the blue from a “student loan” company alerting you to a new loan forgiveness program
Protect Yourself from a Student Loan Scam
Keeping your personal data and financial accounts safe requires thinking before you respond to requests for information — no matter how harmless they seem. Scammers may pretend to represent well-known student loan companies or government agencies.
If they contact you, don’t respond directly to their email, text, or phone call. And, never click on a link they send you. Call the agency or company at the phone number on their website to confirm whether they were trying to reach you.
You can also protect yourself by remembering to:
- Never give anyone your FSA ID. It can be used to steal your identity.
- Confirm any information you receive about repayment or eligibility for forbearance or deferment options with your loan servicer.
- Seek answers about student loans and your specific situation by contacting your student loan servicer or the Federal Student Aid Help Center.
- Remember that legitimate student loan forgiveness programs do not cost money. Information is available for free from your loan servicer.
- Only trust loan forgiveness information you get directly from your loan servicer or the U.S. Department of Education.
Give scammers an “F” in their attempts to steal your money or personal information. Report suspected student loan scams to the Federal Student Aid Feedback Center and the Federal Trade Commission. These agencies work to stop these crimes and may help you recover if a scammer has accessed your student loan data.
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