Student Loan Forgiveness Scams
You may have read in the news that the Biden Administration is forgiving 800,000 borrowers of their student loan debt. That sounds like a lot, but in reality, to qualify you had to have accumulated either 20 or 25 years of qualifying months of payments. That stipulation isn’t stopping fraudsters from trying to scam people though. If you truly qualify, you’ll be notified by email or snail-mail by the federal government or your loan servicer.
The Better Business Bureau cautions they’re seeing some instances of people receiving phone calls letting them know student debt will be forgiven, but asking for a fee to handle the payoff faster, or encouraging them to switch who they’re making their payment to. Don’t be fooled! Check out these warnings.
- The government student loan programs have clear rules, and there is nothing a company can do for you that you can’t do yourself for free. In addition, it is illegal for a company to charge you a fee in advance.
- Don’t send loan payments to them! If this is a fraud, your lender will get nothing and you will fall (even further) behind on your loan payments.
- They promise a quick payoff but this is unlikely. Forgiveness programs can take months and have careful restrictions. They don’t know your situation so how can they promises a fast result? Assurances of quick payoffs are usually too good to be true.
- A “red flag” is the pressure to act immediately. This is usually not true or necessary for legitimate programs. Scammers use high pressure tactics to get credit card numbers or bank account information before you have time to do research or talk to your lender. It’s a common trick.
- One final warning – don’t give them your FSA ID number. They can use it to take control of your accounts and steal your personal information.