HOUSTON – The Better Business Bureau (BBB) is warning people who are trying to get their student loans forgiven of potential scammers.
The BBB said scammers wasted no time capitalizing on the Biden Administration’s plan to cancel some federal student loan debt. The BBB Scam Tracker has reportedly already received reports from consumers who have been targeted by impostor loan forgiveness calls and emails.
How this 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 forgiveness, the scammer insists that you need to complete an online application form, which asks for personal information, such as your bank account details.
One consumer reported the following experience to BBB: “My daughter received a voicemail from ‘the Biden student loan forgiveness program’… She returned the call and spoke with “Peter,” who asked for her email address and telephone number. He asked if she wanted to see if she qualified 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 need 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 got a “Final Notice” letter that has the debt amount listed… Thinking it was from the federal student loan department, I called. They had me change my password and got my bank account number. [And] direct payments to them.”
How to avoid loan forgiveness scams:
- When in doubt, contact the government agency directly. If you receive a message that seems legitimate, but you aren’t sure, stop communicating with the person who contacted you. Then, verify their claims by contacting the government agency they say they represent.
- Never pay fees for a free government program. Government agencies will never ask you to pay a fee to benefit from a free government program. Don’t let scammers persuade you otherwise.
- Think twice about unsolicited calls, emails, or text messages. Usually, government agencies won’t reach out to you unless you request to be contacted. Out-of-the-blue communications are a red flag.
- Don’t give in to scare tactics. If someone claims you’ll miss out if you don’t act immediately, be wary.
For more information read the BBB Tip: Student loan forgiveness is here. Here’s how to avoid scams. You can also read up on government impostor scams in this BBB study and learn how to spot a scam.