FTC Warns of Increase in Student Loan Fraud Calls

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Paying off a hefty student loan can take years and a lot of hard work. With so many people affected by the COVID-19 pandemic, last year the government suspended federal student loan repayments.

Now, the coronavirus emergency relief program is expected to end in just over a month and those payments will resume. Need to save money? Tap or click here for how to get a student discount from Apple (and you don’t need a student ID).

If that’s not enough, scammers are also very aware of the end of the repayment break. And many will try to steal your money.

Here is the backstory

In August, the US Department of Education announced that the latest extension of the suspension of federal student loan payments would last until January 31, 2022. After that date, repayments are expected to continue as before.

The relief measures suspended loan payments, added a 0% interest rate, and stopped collections on overdue loans. Before you start over, you should receive a notice at least 21 days before your payment is due, which will include the payment amount and the due date.

But crooks are always on the lookout for new targets, and they are targeting those who have to repay again. The Federal Trade Commission has issued a warning that students should be aware of scams claiming to help payments.

What can you do about it

Scammers will use whatever tactics or technology they can, and these will include text messages, emails, voicemails, and calls. Beware of unsolicited calls claiming to help you get quick loan forgiveness.

Here are some other things you can do to stay safe:

  • Never pay an upfront fee if someone offers to help. It is even illegal for legitimate businesses to try this.
  • Don’t fall for text messages or emails that convey a sense of urgency. These will typically use phrases such as “act immediately”, “call within 7 days” or “first come, first served”. There is also no one who can promise an immediate and complete forgiveness or cancellation of the loan.
  • Do not give out your Federal Student Aid ID number, Social Security number, or other personal information. It can be used to break into your account and divert refunds.
  • Never download attachments or documents in an email if it isn’t from someone you trust. Avoid clicking on the included links.
  • There are several private lenders, repairers, and collection agencies that work on behalf of the US Department of Education. Do not use an agency that is not approved by the agency.
  • A list of approved student loan services can be found here, and a list of private collection agencies can be found here.
  • If you have already shared your personal student information, you will need to log into your StudentAid account and change your username and password.

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