The Biden administration formally started the application for federal student loan forgiveness on Monday, October 17th, 2022. Recipients who qualify are eligible for the discharge of up to $10,000 of their loans for non-Pell Grant recipients and up to $20,000 for Federal Pell Grant recipients. In November, the administration began notifying people who are approved for federal student loan relief, however, the program has been put on hold as it works through legal challenges in the courts. About 26 million people had already applied to the program by the time it was frozen. As the program remains in limbo, the Federal Bureau of Investigation is warning that scammers are already “on the move” to steal borrowers’ money and Personally Identifiable Information (PII). President Biden set out a warning for all eligible borrowers stating, “Be wary of increased scam attempts, which prey upon people desperate to have their school loans forgiven.”
How to Identify Student Loan Forgiveness Fraud
Suspicious activity can sometimes be hard to spot. Always be aware of what is legitimate and what is fraudulent. Keep reading to learn how potential student loan forgiveness scammers can target you.
You Receive a Phone Call Asking to Pay a Fee
“Hello, this is Jen. I’m calling to inform you about your student loans. For the new forgiveness program and perhaps even a loan discharge, I do have you prequalified right here. You are informed that a specific amount will soon be canceled, but that doing so will need an immediate payment of $1,000 or more.” As this can sometimes be easy to believe for some, never fall for it. There is no fee to apply for the loan forgiveness and you should never pay or share confidential information with the caller.
You Receive Suspicious Links or Emails
Once you submit your application for the loan forgiveness, you may expect an email from the Education Department verifying your tax documents and income. The emails should only come from these senders: noreply@debtrelief.studentaid.gov, noreply@studentaid.gov or ed.gov@public.govdelivery.com. Keep an eye on the sender’s email address. You can tell you’re receiving a phishing email from a scammer if these emails differ in any way, even if it contains a minor misspelling.
Scammers Need You to Provide Additional Documentation
The only type of additional documentation you should be providing is your income or your tax document as previously stated above. Anyone requesting your Social Security Number, your FSA ID, any of your bank information or credit card information is trying to scam you.
Risky Search Engines
Tech Transparency Project found that many of the advertisements appearing on search engines like Google related to student loans were fake – either pretending to be government organizations or attempting to defraud people of their money or personal information without ever providing them the promised services.
Tips on How to Stay Protected From Student Loan Forgiveness Scammers
- Avoid being on insecure browsers
- Never click on a suspicious link
- Never respond to anyone asking for additional information from a suspicious email address
- Invest in a password manager to avoid being a victim on an internet scam
What to Do If You’ve Been Scammed
If you fall victim to an online fraud, the individual who took your personal information may try to steal the rest of your identity . It’s critical to take action and protect yourself as soon as you can, regardless of what has been taken from you. Here are the steps to take if you fall victim to a scammer.
Submit a Complaint to the FTC
The Federal Trade Commission asks questions about what happened as you move through the process, and they will develop a personal restoration plan to assist you with the following actions.
Reach out to the credit bureaus and request a freeze on your credit as well as a fraud alert. These two actions will prevent unauthorized credit accounts from being opened and you’ll also be alerted if any more suspicious activity is uncovered.
You should contact your loan servicer informing them what happened and see what you can do to take further action. If you don’t know who your loan servicer is, check StudentAid.gov.
The more complaints these organizations receive, the more evidence they will have to use against scammers in court. Stay stress free during the loan forgiveness process and take precaution against these scammers.