(BBB) - Scammers wasted no time capitalizing on the Biden administration’s plan to write off some federal student loan debt, as BBB predicted. BBB Scam Tracker has already received reports from consumers who have been targeted with impersonator loan cancellation calls and emails.
Read more below or listen to BBB Regional Director Whitney Quick here:
How the scam works
You receive a call or voicemail from someone claiming to represent a new student loan forgiveness program. To see if you qualify for the pardon, the scammer insists you need to complete an online application form, which asks for personal information, such as your bank account details.
A consumer reported the following experience to BBB: “My daughter received a voicemail from the ‘Biden Student Loan Forgiveness Program’…She called back and spoke to ‘Peter’, who asked her for her address email and phone number.He asked if she wanted to see if she was eligible for the loan, but when we started asking him questions…he got frustrated and ended the call.
In other variations, the scammer insists that you have to pay an upfront fee or even redirect your current student loan payments to them. For example, another person targeted by this scam told BBB: “I received a ‘last notice’ letter stating the amount of the debt…Thinking it was from the Federal Student Loans Service, I called. They made me change my password and got my bank account number. [And] direct payments to them.
Currently, most student loan forgiveness scams reported to BBB Scam Tracker are government imposters. But watch out for new variations because scammers have time to get creative.
How to Avoid Student Loan Forgiveness Scams
- If in doubt, contact the government agency directly. If you receive a message that seems legitimate, but that you are not sure about, stop communicating with the person who contacted you. Then verify their claims by contacting the government agency they say they represent. For more details on the student loan forgiveness program, visit ED.gov or StudentAid.gov.
- Never pay a fee for a free government program. Government agencies will never ask you to pay a fee for a free government program. Don’t let scammers convince you otherwise. The scammers may say that the fee will relieve you faster or unlock additional benefits, but that’s part of the scam.
- Think twice about unsolicited calls, emails or texts. Usually government agencies will only contact you if you ask to be contacted. Impromptu communications are a red flag.
- Don’t give in to scare tactics. If someone says you’re going to miss something if you don’t act immediately, beware. This is an all too common tactic that scammers use on their victims. Instead of responding, stop communications until you can verify what they say is true.
For more information
Get more solid advice by reading the BBB Tip: Student loan forgiveness is here. Here’s how to avoid scams. You can also read about government imposter scams in this BBB study and learn to spot a scam.
For more information on federal student loan repayment options, visit the official government website, StudentAid.gov. This is the best way to determine if you qualify for loan forgiveness and how to receive it.
If you spot a student loan forgiveness scam, report it. Sharing your experience at BBB.org/ScamTracker can help other consumers spot the scam faster.
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