Student loan forgiveness scams are becoming more and more common as scammers look to take advantage of desperate borrowers.
With the recent passage of legislation by President Biden, student loan forgiveness scams are on the rise! Scammers are looking to take advantage of desperate borrowers who are hoping for relief from their student loan debt.
Be on the lookout for common scam tactics and never give out personal information unless you are 100% sure the person or organization requesting it is legitimate.
Domain Listings Scam
In addition to the student loan forgiveness scams, you may also be receiving scam mailers such as the Domain Listing scam mailer that looks like a bill. When some businesses see this, they may process the payment. If you are cautious, you can check BBB complaints. For example, the Domain Listings scam has had 294 BBB complaints in the last 3 years.
Don’t Be Scammed, There Are No Guarantees!
The scammer will usually contact the borrower via email, phone, or social media. The presentation will probably look official.
- They will claim to be affiliated with the Department of Education or a student loan servicing company like FedLoan or Nelnet.
- They may even send official-looking documents to back up their claim.
The scammer will then tell the borrower that they can help them get their loans forgiven in exchange for an upfront fee. They may say that the fee is for processing or legal costs associated with the application. In some cases, they may say that the fee is insurance in case the borrower’s application is denied.
Regardless of how they spin it, it’s important to remember that you should never have to pay a fee to apply for forgiveness. For example, the Federal Government just released its forgiveness form and it only asks for identification information, which is submitted over its secure website.
Watch Out for Phishing Attacks
Phishing is a type of cyberattack in which the attacker uses email or text messages to trick the victim into clicking on a malicious link or attachment. This can often lead to the installation of malware, which can give the attacker access to sensitive information like login credentials or bank account numbers.
One of the most common phishing attacks targeting student loan borrowers is an attack purporting to be from the Department of Education.
The attacker will send an email or text message that looks like it’s from the Department of Education, but when you click on the link, you’re taken to a fake website that’s designed to steal your personal information. Usually, these fraudsters will attempt to coax you into paying your student loan or collecting a debt.
Another common type of phishing attack targets lenders. The attacker will send an email or text message claiming to be from your lender and asking for personal information like your Social Security number or bank account number. They may even say that you need to provide this information to consolidate your loans or lower your interest rate.
If you receive any emails or text messages like these, delete them immediately, and do not click on any links or attachments. If you’re unsure whether the request is legitimate, contact your lender directly through their official website or by phone to verify the request before providing any information.
How to Spot a Fake Student Loan Forgiveness Website
One common scam tactic is setting up fake websites that mimic the look and feel of legitimate government websites. These websites will often include false information about student loan forgiveness programs and how to apply for them. If you come across a website that looks suspicious, always do your research to make sure it is legitimate before providing any personal information.
How to Spot a Fake Website
There are several things you can look for when trying to spot a fake website. First, check the URL. If the website is claiming to be affiliated with the government, it should have a .gov extension.
Take a look at the site’s content. If there are grammar or spelling errors, that’s usually a red flag.
See if you can find contact information for the website. A legitimate website should have an email address or phone number listed somewhere on the site.
Finally, consider the overall design of the site. If it looks like it was put together quickly and without much thought, chances are it’s not legitimate.
What to Do If You Come Across a Fake Website
If you come across a website that looks suspicious, there are a few things you can do to confirm its legitimacy. First, try doing a Google search for the name of the program + “scam.” This will often bring up articles or blog posts from people who have been scammed by similar schemes in the past.
You can reach out to your loan servicer and ask if they are aware of the program. They will be able to tell you whether or not it is legitimate and direct you to resources where you can learn more about repayment options that are available to you.
Fake Student Loan Discharge Due to Disability Scams
The scam works like this: you’ll receive a call, email, or see an ad from a company claiming that they can help you get your student loans discharged because of your disability.
They might even say that they’ve helped other people in your situation. They’ll ask you for some personal information and then tell you that you need to pay them a fee to get started. Once you pay the fee, they’ll disappear and you’ll never hear from them again.
What You Can Do
The only way to get your federal student loans discharged due to disability is through an official government program like Total and Permanent Disability Discharge or Disability Discharge for Veterans.
If you’re contacted by someone claiming they can help you discharge your loans, hang up the phone, delete the email, or ignore the ad. Never give them any personal information or money. You can also report the scam to the Federal Trade Commission (FTC).
Phony Student Loan Consolidation Services
These consolidation services will promise to lower your monthly payments by consolidating your loans into one payment. However, many of these services will actually end up costing you more money in the long run. Plus, you can consolidate your loans for free through the federal Direct Consolidation Loan program.
Conclusion
If you’re struggling with student loan debt, know that you’re not alone and there are resources available to help you navigate this difficult time. That being said, be cautious of scammers who are looking to take advantage of desperate borrowers. Be on the lookout for these common scam tactics and never give out personal information unless you are 100% sure the person or organization requesting it is legitimate.
