Here’s Why You Should Be Careful With Student Loan Offers
“Knowledge is power” is true of many things, including trying to thwart scammers who have set their sights on student loan debt. Since the COVID-19 pandemic took hold of everything from personal health to the health of the economy, the federal government hit the pause button on federal loan payments – and interest – on more than one occasion. The current moratorium on loan repayment will be in effect through May 1, 2022.
But at a time when borrowers are struggling to stay afloat financially, student loan scammers have revved up their efforts to take advantage of those dealing with debt. Here are some of the new methods scammers have come up with to target people and take their money.
If you’re asked to pay a fee for debt relief, you’ll be relieved to know it’s not necessary: The government offered reprieve from student loan payments and interest is available at no cost. The current forbearance as well as other related services offered by the U.S. Department of Education (ED) are free. Period.
You can also take advantage of options such as loan consolidation, loan forgiveness programs, getting loans out of default, and restructured repayment plans. According to the ED, “If you are contacted by a company asking you to pay ‘enrollment,’ ‘subscription,’ or ‘maintenance’ fees to enroll you in a federal repayment plan or forgiveness program, you should walk away.”
Sensitive Information Inquiries
Know what you should say “no” to: If a company asks for personal student borrower information such as a password or Federal Student Aid ID, sever ties. According to the ED, such information is akin to a written signature, which the ED will never request. If a scammer gains access to your ID information, unauthorized changes could be made to your account. Even more egregious: A scammer could request that you provide power of attorney over your student loan account, which can lead to not only account changes but identity theft.
Repayment Hiatus “Assistance”
It’s important to know that the loan repayment hiatus requires no action on your part – no filling out forms, making phone calls, submitting paperwork to government offices. The federal government will simply put your loan on hold if it meets eligibility requirements. Scammers are betting that loan holders don’t know this, and have taken to calling and directing people to “apply” for the government forbearance program. The upshot: Scammers ask for personal information that can easily lead to identity theft and financial havoc.
Loan Forgiveness In Its Entirety
“If it sounds too good to be true, it probably is.” So when you receive an offer for total and immediate student loan forgiveness, hopefully you’ll remember this oft-repeated adage. The ED cautions that no one person or company can offer this type of loan forgiveness. “Most government forgiveness programs require many years of qualifying payments and/or employment in certain fields before your loans can be forgiven.”
You can find information on legitimate ways to manage your student loan debt – even after the pandemic has subsided and the government repayment hiatus has ended – by visiting the ED’s website.