Do not fall for scam calls using the student loan forgiveness program
President Joe Biden recently declared his intention to forgive $20,000 in student loan debt. However, its been reported that scammers are exploiting the student loan forgiveness program and using it as bait.
According to reports, the Federal Trade Commission (FTC) received over 49,000 complaints in the first 8 months of this year involving student loans, approximately 2/3rd of which, the agency claimed, were for student loan forgiveness plans, mainly fraudulent calls.
How does the Student Loan Forgiveness scam work?
Following President Biden's announcement last week that millions of debtors will have their federal student debt forgiven up to $20,000, fraudulent callers are rapidly acting. These calls are already contacting consumers and giving them a false sense of urgency while Americans wait for further information on the plan.
According to consumer activists, the debt cancellation plan is a gold mine for con artists looking to rob consumers of their money, personal information, or both. The calls might be aimed at student debtors, or they could be phishing expeditions that prey on people even if they don't have student loan debt.
Scammers have already taken money from student borrowers. They will ask you to submit a processing fee or an advance to someone else. The victim believes they are being contacted by a legitimate government body and are required to pay. Victims part with that money just to discover later that it was a con.
Someone calling on behalf of a student loan forgiveness plan may be a scammer in real life. They will require you to submit an online application that includes providing your bank information to determine your eligibility.
The majority of reported student loan frauds involve government scam artists. Your social security number's last four digits, ID, and badge number might all be provided by the caller. They warn you that you owe money and risk going to jail if you don't make the payment.
The FTC and the consumer bureau have begun taking measures against student loan forgiveness companies that convince students to pay for claimed aid immediately to decrease their overall debt or cut their monthly payments.
The FTC has informed consumers that no fee is associated with enrolling in the debt cancellation plan, pausing loan payments, or choosing an income-based repayment schedule. Borrowers need to understand that nothing needs to be done right now. A warning sign is if the caller implies that you would lose out if you don't act immediately away, wants money from you to help you, or asks for personal information like federal student assistance ID or Social Security number.
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