Scammers wasted no time capitalizing on the Biden Administration's plan to cancel some federal student loan debt.
The Better Business Bureau has already received reports from consumers who have been targeted by imposter loan forgiveness calls and emails.
1. How does this scam work?
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.
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.”
2. Can you give us an example?
One consumer told us: “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.”
Currently, most of the student loan forgiveness scams reported to BBB Scam Tracker are government impostors. But watch out for new variations as scammers have time to get creative.
3. How can we avoid student 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. For details on the student loan forgiveness program.
- 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. Con artists may say the fee will get you relief faster or will unlock additional benefits, but that is all part of the scam.
- 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. This is an all-too-common tactic scammers use on their victims. Instead of responding, stop communications until you can verify what they say is true.
4. Where can consumers find more information on this topic?
Get more solid advice by reading 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.
For 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 on BBB.org/ScamTracker can help other consumers spot the scam faster.