Cybersecurity experts are seeing an uptick in student loan scams in the form of phone calls, emails and text messages as loan payments are resuming this fall.
Student borrowers in America owe their lenders a combined $1.76 trillion, according to the Education Data Initiative. With that much money at stake, cybercriminals are trying to siphon as much as they can for themselves. According to Forbes and anti-spam/scam platform RoboKiller, Americans lost $5 billion to student loan fraud in 2022 alone. Borrowers received 700 million student-loan-related robocalls every month last year.
Criminals prey on people’s emotions and vulnerability and they know vulnerability is high since President Biden’s proposed federal student loan forgiveness plan was rejected by the Supreme Court. In August the Federal Trade Commission (FTC) announced more than $9 million in refunds were being dispersed to victims of a scam by a company purporting to enroll them in a student loan relief program.
“Scammers and bad actors have long targeted vulnerable students who may find themselves confused at various junctures in the financial aid process,” Justin Draeger, president of the National Association of Student Financial Aid Administrators, told CNET. “This massive repayment start date presents just such an occasion.”
Here are three ways to identify a potential student loan scam, according to the FTC:
- Don’t trust anyone who promises debt relief or loan forgiveness
Scammers try to look real, with official-looking names, seals and logos. They may say they’re affiliated with the U.S. Department of Education.
“They promise special access to repayment plans or forgiveness options — which don’t exist,” the FTC said. “If you’re tempted, slow down, hang up and log into your student loan account to review your options.”
- Keep your FSA ID login information private.
Anyone who says they need your Federal Student Aid ID to help you is a scammer, the FTC said.
“If you share it, the scammer can cut off contact between you and your servicer — and even steal your identity,” the agency wrote.
- Never pay for help with your student loans
“There’s nothing a company can do that you can’t do yourself for free,” the FTC said.
You can get help at StudentAid.gov/repay. Go directly to your loan servicer if your loans are private, the FTC said.
For all types of student loan forgiveness scams, immediately follow or all of these options:
- Contact your federal loan servicer to make sure no unwanted actions were taken on your loans (or to revoke any authorization agreement that your servicer has on file).
- Contact your bank or credit card company to stop all payments to the company that is scamming you.
- Submit a complaint to the official Student Loan department of the government.
- File a complaint with the Federal Trade Commission.
- File a complaint with the Consumer Financial Protection Bureau.
If you find yourself involved in a scam that concerns your StudentAid.gov account, or if you’ve shared your FSA ID details with someone whom you now suspect to be a scammer, be sure to log in and change your account password as soon as possible. You should also check your account information such as your primary contact email, mailing address, and phone number, to make sure it’s up to date. Lastly, you should still file a complaint so the Federal Student Aid department can monitor your account for continued suspicious activity. The Department of Education and any of their partners would never ask for your FSA ID password.
The old adage, if it seems too good to be true it probably is, applies to this situation. Beware of any promises of quick loan forgiveness as it’s probably a scam.