If you’re one of the millions of Americans who is looking forward to having thousands of dollars of student debt forgiven following the recent announcement from President Joe Biden, be aware that scammers are ready to pounce and take advantage of you.
The Better Business Bureau says it has already received reports of people being targeted by bogus loan forgiveness calls and emails.
Biden said last month many Americans will be able to have up to $10,000 in federal student loan debt forgiven in they make less than $125,000 a year. People who went to college on Pell grants can have up to $20,000 forgiven. Details of how this will all work are still being laid out.
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Here’s how the BBB says it works. You are contacted by someone claiming to represent a new student loan forgiveness program. But to see if you qualify, the crook says you need to complete an online application which asks for personal information such as your bank account.
This is what one person reported to the BBB:
“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.”
Other forms of this scam include someone insisting you need to pay a fee up front or redirect your current student loan payments to them.
“I got a “Final Notice” letter that has the debt amount listed,” read one instance reported to the BBB. “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.”
The BBB warns this won’t be the last such cases and that there will be more variations as scammers have time to get creative.
Here is how you can avoid these scams, according to BBB:
- 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, visit ED.gov or StudentAid.gov.
- 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.