The U.S. government recently announced a new plan to help federal student loan borrowers from low and middle-income families shift back to normal payment as pandemic-related relief runs out. As they work to iron out the details of the new plan—which includes a one-time student debt relief program—scammers are coming up with schemes to steal borrower’s hard-earned money and personal information. Let’s take a look at how these scammers might take advantage of this news so you can protect yourself from student debt relief scams.
3 Warning Signs of Student Debt Relief Scams
To take advantage of this new plan, fraudsters will create different types of schemes to target those who may be eligible. If you are a federal student loan borrower, keep an eye out for these common methods scammers might use:
1. They promise to get you in early or help you skip the line.
Keep in mind that it will take time for the Department of Education to release details about submitting an application for relief. If someone contacts you claiming they can help you get benefits early, it is a scam. To stay up to date on the details of this new plan, you can sign up for updates directly from the Department of Education. For information about how to prepare to receive assistance, keep reading.
2. They contact you out of the blue.
The Department of Education will not contact you directly regarding your eligibility for relief. You will be required to submit an application to qualify. Applications to apply for the one-time student debt relief will be available in early October 2022.
3. They guarantee eligibility for a fee.
You will never have to pay a fee to qualify for government benefits, including benefits that will become available through the new Student Debt Relief Plan.
Where to Report
If you are contacted by someone insisting they can help you with your student loan debt—whether they claim they can get you in early or help you qualify for a fee—report it immediately to the Federal Trade Commission (FTC) at ReportFraud.FTC.gov.
If you were contacted by a fraudulent company, report them to the Consumer Finance Protection Bureau (CFPB). While the CFPB might not be able to help with your specific case, they will use your complaint to shut down these dishonest companies.
How to Recover from Student Debt Relief Scams
If you provided a scammer personal information—such as your StudentAid.gov account login information—or paid them money to help with student loan debt relief, follow these immediate action steps:
- If you provided login credentials for your StudentAid.gov account, change your password right away and make sure you have multi-factor authentication set up on your account.
- If the scammer gained access to your StudentAid.gov account, they may have acquired your personal information—like your birthday or Social Security number. Keep an eye on your credit report for any fraudulent activity and consider placing a fraud alert on your account.
- If you provided financial information—such as your credit card or bank account number—contact your credit card company or bank. They will be able to help secure any compromised accounts. They may also be able to assist you with canceling the transaction.
- If you receive statements for accounts that you did not open or you are denied credit for no apparent reason, your personal information might have been used to open up new financial accounts. Visit IdentityTheft.gov from the FTC to file a report and create a personalized plan for recovery.
How to Prepare to Receive Legitimate Assistance
According to the U.S. Department of Education, there are a few steps you can take now to prepare to apply in October. Take action now so you are prepared when the application becomes available.
- Log in to your StudentAid.gov account and confirm that your contact information is accurate and up to date.
- If you don’t have a StudentAid.gov account, create an account to help you manage your loans.
- Verify that your loan servicer has up to date contact information. If you are unsure who your servicer is, you can find your servicer(s) on your account dashboard or “My Aid” page of your StudentAid.gov account.