Feds warn of ‘student loan forgiveness’ scams

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Scammers may try to solicit financial information, payments or PII from potential victims

EL PASO, Texas (KTSM) – Agents from the FBI office in El Paso are warning the public about the possibility of criminals defrauding those applying for federal student loan forgiveness.

FBI officials say scammers will seek to solicit personally identifiable information, financial information, or payments from potential victims using fraudulent websites, emails, text messages, or phone scams.

“Scammers will constantly use their effective scam scenarios and modify them to take advantage of a current situation affecting the community as a whole. The FBI typically sees this behavior when a new government assistance program becomes available,” said Special Agent in Charge Jeffrey R. Downey.

“The FBI is now providing information to the public to help people recognize the warning signs of potentially fraudulent activity related to federal student loan forgiveness. Don’t let a scammer trick you into revealing personally identifiable information or providing any type of payment. The US government will not charge any type of processing fee or require any type of payment for your federal student loans to be forgiven.

Background to the Student Loan Forgiveness Program

On August 24, 2022, the Student Debt Relief Plan was announced for individuals with incomes below $125,000 or co-filers with incomes below $250,000. Under this plan, the US Department of Education will provide targeted student debt cancellation to borrowers whose loans are held by the US Department of Education.

The loan forgiveness will provide up to $20,000 in debt forgiveness for Pell Grant recipients and up to $10,000 for non-Pell Grant recipients. For more information on debt forgiveness, eligibility, and other program specifics, please visit: https://studentaid.gov.

Anticipated Fraudulent Activity

Cybercriminals and fraudsters may claim to be helping people participate in the Federal Student Loan Forgiveness Program by contacting potential victims by phone, email, mail, text message, websites, or other online chat services.

Officials add that cybercriminals and fraudsters use their schemes to receive payment for services they won’t provide or to collect information about victims that they can then use to facilitate a variety of other crimes.

Entry into or assistance with a federal student aid program through the Department of Education or its trusted partners does not require any type of payment.

Scammers often use electronic communication methods (email, SMS, website) to explain how a recipient is eligible for government assistance and claim to need information or money from the victim to complete the application process.

They can email or text the victim, with a body text containing a link to follow.

Once a victim clicks on what is considered a legitimate link to the official federal website, the website will ask for personally identifiable information (PII) such as name, social security number, date of birth, current and previous addresses, phone numbers, e-mail addresses, mother’s maiden name or social media IDs to complete the process. This personal information can be used to conduct additional fraudulent activities at the victim’s expense.

Websites may solicit financial information such as bank and routing account numbers, credit or debit card numbers, digital wallet addresses, or other peer-to-peer money transfer account information. peer to process an application fee or complete the application process.

Phone scammers can call victims claiming to be representatives of a bank or the Ministry of Education and request the victim’s PII and financial information to begin the loan repayment process.

Tips to protect yourself

  • Remember: the US government will not charge a processing fee regardless of the type of currency – traditional or cryptocurrency.
  • Do not open links or download images or files from suspicious email addresses.
  • Always check official US government websites, such as https://studentaid.gov.
  • Confirm any loan repayment information with the financial institution or company providing the loan.
  • Use caution when entering PII or financial information on websites.
  • Make sure there are no spelling or grammatical errors on the website or in the email. This may indicate a potential scam.

If you are a victim

If you are the victim of an Internet scam, the FBI recommends taking the following steps:

  • Contact your financial institution immediately to stop or cancel transactions. Ask your financial institution to contact the corresponding financial institution where the fraudulent or suspicious transfer was made.
  • Report the activity to the online payment service used for the financial transaction.
  • Keep all transaction information, including prepaid cards and bank statements and all phone, text or email communications.
  • Report it to the FBI Internet Crime Complaint Center at www.IC3.gov as soon as possible.
  • Monitor your financial accounts and credit reports for fraudulent activity.
  • Report the fraud to the Department of Education at https://studentaid.gov/feedback-center and to the Consumer Financial Protection Bureau (CFPB) at www.consumerfinance.gov/complaint.

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