Before the coronavirus pandemic, students were a common target of educational scams. Although, after the pandemic, people became more desperate the longer they struggled, scammers and fraudsters prospered and started utilizing the same strategy more aggressively.
No particular scam relating to coronavirus relief or a specific company is being punished. But scammers are still out there.
According to educational experts at the USA education conferences, such as the Education 2.0 Conference, there are two types of such scams. In one scam, a business will charge you to sign up for a benefit you could have received without paying anything, like a federal income-driven payback plan. Scammers frequently promise to enroll victims in a loan deferment program for a fee.
Another scam involves making an unbelievable promise in exchange for money, such as forgiveness. They take your money and leave after that. Hence, borrowers should always be skeptical of advertising that promises forgiveness.
Neither coronavirus treatment program contained student loan forgiveness. Almost all federal student loan payments are currently suspended through August 31, 2022, and no interest is being accrued. Although no legislation has been submitted, the new Biden administration has promised to give the $10,000 in federal student loan forgiveness top priority.
Five Warning Signs Of Student Loan Forgiveness Programme Scams
Some borrowers may fall for scams due to the complexity of student loan servicing and a lack of knowledge of their real options. There are several warning signs to look out for if an unidentified organization contacts you, advertising debt cancellation or management services, according to the Education 2.0 Conference:
- Scammers request payment in advance for services that ought to be free: Deferment, forbearance, loan consolidation, and federal student loan forgiveness programs are all free of charge from the Department of Education.
- They utilize sales strategies, such as limited-time deals: The Department of Education’s programs doesn’t push you to make decisions immediately or demand a feeling of urgency.
- The scammers plead with you to stop talking to your student loan servicer: Maintain regular communication with your servicer and keep paying your monthly obligations to avoid falling behind.
- They claim to be connected to the company handling your loan: Call the number on your billing statement or access the servicer’s online portal if you have doubts about a company’s credibility.
- They request private information over the phone, such as your Social Security number, Federal Student Aid (FSA) ID, or banking details: This allows con artists to disconnect you from your loan servicer and take money directly out of your bank account.
Contact your bank immediately to stop any planned payments if you think a scammer has approached you. To protect your account and file a complaint with the Federal Trade Commission, you must contact your loan servicer (FTC).
Additionally, the Education 2.0 Conference suggests that if you’re having trouble making your student loan payments, you might consider joining an Income-Driven Repayment (IDR) plan or submitting a deferral request on the Federal Student Aid (FSA) website. If you refinance to a private loan with a reduced interest rate, you might also be able to reduce your monthly payments. You may compare student loan refinance rates for free without affecting your credit score.
What To Do If A Student Loan Forgiveness Scam Has Tricked You
Student loan scams are, unfortunately, reasonably prevalent. Here are some steps provided by the Education 2.0 Conference experts to take if you require assistance and give your money or personal information to a shady business:
- Get in touch with your loan servicer immediately: If you suspect your information has been compromised, contact your servicer directly. You can revoke any third-party authorizations with the aid of your servicer.
- Speak with your bank or credit card provider: You might attempt to get your money back from a company you unintentionally paid to assist you with loan forgiveness by contacting your bank or credit card provider.
Even if the money hasn’t yet been taken from your account, call the scam department of your bank or credit card company as soon as possible. The bank has the authority to terminate your account, issue you a replacement card, or place an alert on it for any improbable withdrawals. The agent ought also to be able to clarify whether you qualify for reimbursement of lost funds.
- Report the incident to the relevant authorities: It’s critical to lodge a grievance with the FTC, CFPB, and your State Attorney General. The FTC will provide you with a list of actions to protect your identity when you report fraudulent activity to it.
- Keep an eye on your credit report: Freezing your credit record is smart. Scammers are prevented from creating accounts in your name by a credit freeze. Make sure to monitor your credit report frequently to ensure that nothing lapses.
- Make password modifications: Change the passwords on your student loan account, bank, and credit union accounts, as well as your FSA ID. Use strong passwords that are challenging for scammers to decipher. They won’t be able to access your information in this way.
- Take advantage of your identity theft insurance: Identity theft may be covered by some renters’ and homeowners’ insurance policies, or you may have opted to include it in your primary policy. If you have this coverage, the insurance provider might contribute to any costs you accrue while attempting to restore your identity.
According to the Education 2.0 Conference’s professionals, insurance providers could also give you access to skilled scam specialists who can help you through the procedure. Having an expert on your side could be very beneficial because undoing the harm caused by identity theft can be stressful and time-consuming.
Every aspect of your life is prone to scams, and it becomes impossible to avoid fraud, no matter how much you try. Still, by following the above mentioned steps and a few more discussed in the 2022 upcoming education events, you can protect yourself from future severe losses.