Scammers exploit student loan forgiveness program

Benjamin Franklin said "nothing is certain except death and taxes." If he was alive today, he might add "and student loan debt relief scams."

In a coordinated enforcement action in 2017 called "Operation Game of Loans", the FTC and partner law enforcement agencies cracked down on 36 companies that had scammed student loan borrowers out fo more than $95 million in upfront fees with bogus promises to help get their loans reduced or forgiven. Just last month, the agency sent 14,521 refund checks totaling more than $822,000 to student loan borrowers victimized in a scheme that operated under the name Student Advocates.

So it was inevitable that scammers would seek to take advantage of the recent announcement by President Biden that hundreds of billions of dollars in students loans will be forgiven and payments on many loans will continue to be deferred. The FTC has issued a warning about scams and we're already getting reports to our BBB Scam Tracker service about scam calls and texts. 

Elements of the messages include:

• Texts instructing recipients to click on a link to take advantage of the loan forgiveness program.
• Callers with foreign accents, which indicates they're likely calling from an overseas boiler room. 
• People asked to provide their Social Security number to verify their eligibility or pay an upfront fee to move to the front of the forgiveness line. In more sophisticated scams, student loan borrowers have been convinced to redirect their loan payments to the crooks.
• Call ID says "Student Loan Center" or "Education Department" or something similar. 

The Department of Education is still working on the details of the forgiveness program - who's eligible, how to apply to get student loan debt canceled, and so on. And there's a strong possibility the program will be challenged in court, further delaying and perhaps even forestalling loan forgiveness altogether. 

In the interim, the FTC and BBB offer these tips to avoid becoming the victim of a student loan forgiveness scam:

• If you receive a message that seems ligetimate, but you aren't sure (and you shuld be skeptical), stop communicating with the person who contacted you. Then, verify their claims by contacting the government agency they say they represent. 
• Government agencies will never ask you to pay a fee to benefit from a free government program. Don't let scammers persuade you otherwise. 
• Think twice about unsolicited call, emails, or text messages. Usually, govenrment agencies won't reach out to you unless you request to be contacted. Out-of-the-blue communications are a red flag. 
• Don't share your Federal Student Aid PIN with anyone. It would allow a crook to perform actions on your student loan on your behalf.
• Dont' give in to scare tactics. If someone claims you'll miss out if you don't act immediately, be wary. This in an all-too-common taactic scammers use on their victims. Instead of responding, stop communications until you can verify what they say is true. 

Don't assume a call is legitimate just because you have a student loan. I've never had a student loan but regularly get calls offering to help me reduce or eliminate my loan balance. 

You can visit the Department of Education's website to sign up to receive updates on the debt forgiveness program.