- President Joseph R. Biden signed an executive order extending a pause on student loan payments to January 31, 2022. However, some borrowers are already reporting a rise in student loan forgiveness scams where people pose as loan providers that can help pay off student loans.
- Identity thieves ask for information like Social Security numbers (SSNs), federal student aid I.D.s, bank account information and credit card information to commit different forms of identity theft and fraud.
- Some loan forgiveness solicitations are not attempts to steal your information. However, they are designed to steer you into high-cost loan repayment programs with high interest rates or fees.
- Be skeptical of anyone who calls or emails you offering to pay off your student loans. Call your loan provider to see if the message was legitimate, and do research on the loan provider the caller claims to represent.
- If you fall victim to an identity scam, call your bank or credit card provider to stop payments or close your accounts. Also, contact your loan servicer so they can monitor your account. Finally, check your credit report for any suspicious activity and strongly consider freezing your credit.
- To learn more about student loan forgiveness scams, or to create a resolution plan, contact the Identity Theft Resource Center toll-free by phone (888.400.5530) or live-chat on the company website www.idtheftcenter.org.
Student loan forgiveness scams have been around for a long time. However, they have spiked during the COVID-19 pandemic. President Joseph R. Biden recently issued an executive order extending student loan relief until January 31, 2022. While the extension is welcome news to many borrowers, it also means student loan forgiveness scams will continue for the foreseeable future. CNBC reports an uptick in student loan forgiveness scams. The Identity Theft Resource Center (ITRC) has also received inquiries about the scams, like the one below:
While the voicemail might not be a scam, people who receive voicemails like these should use caution. The same advice applies to emails received about student loans resuming, especially if the sender claims to be from a loan provider that was not used to take out the loan. COVID-19 has given criminals and unethical loan processors more ways to take advantage of people who have been hurt financially over the last year and a half. It could be a scammer looking to exploit the pause in payments due to COVID-19, and any potential confusion it brings.
Who are the Targets?
Former and current college students who are paying off student loans
What is the Scam?
Identity thieves call or email people with student loans claiming to be a loan provider or the U.S. Department of Education. They offer to reduce and help pay off monthly payments. Scammers ask for all sorts of personally identifiable information (PII) over the phone so that they can commit different forms of identity crimes like account takeover.
However, not all of the unsolicited student loan calls and emails are identity scams. Some are reported to be attempts to steer borrowers into repayment programs with high fees and high interest rates.
What They Want
Criminals ask for PII like Social Security numbers (SSNs), federal student aid I.D.s, credit card information and bank account information to commit identity theft. Unethical loan processors attempt to enroll borrowers in high-cost loan repayment programs.
How to Avoid Being Scammed
- To avoid student loan forgiveness scams, be skeptical of anyone who calls you to help you pay off your student loans. Google the name of the loan provider the caller claims to be working for and see if there are any complaints. Also, if you have any doubts, contact your loan provider directly about the inquiry.
- Look for the name of the program that is being offered to you. CNBC says, in some scams, criminals have claimed they are part of “Biden loan forgiveness” or “CARES Act loan forgiveness,” two programs that do not exist.
- If you receive an email about student loan forgiveness, check the sender’s email address to make sure the email is coming from an address that ends in .gov.
- If you provide a scammer with bank account or credit card information, call your bank or credit card provider to stop the payments immediately, and close your accounts if needed. It’s also a good idea to contact your student loan servicer, especially if you provided information such as your federal student aid I.D., so they can monitor your account, and check your credit report for suspicious activity. The ITRC strongly recommends you also freeze your credit.
- Finally, report the student loan forgiveness scams to the Federal Trade Commission (FTC) at www.IdentityTheft.gov.
To learn more about student loan forgiveness scams, or if you believe you were the victim of a scam, contact the ITRC toll-free by calling 888.400.5530. You can also visit the company website to live-chat with an expert advisor. Go to www.idtheftcenter.org to get started.