Don’t be a victim: Increasing student loan scams increase as repayment nears

After more than three years of relief, the suspension on student loan payments is coming to an end.

A number of scams have already been reported.

“Given that there will be a number of changes in federal student loan servicing and federal student loan programmes, it is unfortunately an opportunity for those who are in the scam process to try to reach out to potential students and borrowers,” said Leslie Tayne, financial attorney, author, and credit and debit expert.

The Better Business Bureau has tips on how to avoid falling victim to one of these scams.

  • Never pay money for a free government program.
  • Be wary of out-of-the-blue calls, emails or texts.
  • Always do research before sharing personal information.
  • If something seems suspicious, contact the Department of Education.

“Remember that the federal government will not call you. They also don’t charge you. That’s something that anyone who is a borrower at any time should be aware of,” said Tayne.
Student loan payments will be due again in October.

Until then, the BBB warns that scammers will use this time as an opportunity to take advantage of people.

So far, scammers have contacted people claiming to be from the Federal Student Aid (FSA) Department and that they are eligible for student debt consolidation.

Scammers will likely ask for your personal information if you respond, claiming that they need it to confirm your identity or check your eligibility—but this is not the case.

“There’s no reason to give your social security number, any of your financial information over the phone. Your driver’s license, credit cards— there’s no money that needs to be paid for any of these programs through the federal government for your student loans,” said Tayne.

Loan experts want to remind people to use caution with any kind of communication they receive.

“You could receive notices that look like it comes from the federal government with bar codes, American flags, eagles on it. That doesn’t necessarily make it legitimate. If anybody calls you or contacts you through social media, that’s likely a red flag for some sort of scam,” said Tayne.

Officials warn anyone can become a victim.

“Even if you don’t have a loan, I have seen some people receive notices about loans that they don’t even have. So if something comes that’s suspicious, and you don’t believe that you have a loan, you definitely need to research it independently before even calling the number on the letter,” said Tayne.

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