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In October, after a break of more than three years, student loan repayments are set to recommence, and the Federal Trade Commission has cautioned borrowers to beware of fraudsters seeking to take advantage of this.”
Scammers might try to trick borrowers into paying for assistance services that are fake, Ari Lazarus, a consumer education specialist at the FTC, warned in a recent consumer alert. These fraudulent offers could promise lower monthly payments, guidance on how to evade repayment, or even total loan forgiveness.
The alert clarified, “Feeling stressed about repaying your loans? You might be tempted by the ‘helpful’ calls and texts. But be vigilant and understand how to identify the scams.”
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The break on federal student loan repayments was initiated in March 2020 as part of several measures to ease the financial strain on households during the Covid-19 pandemic onset.
This respite was prolonged eight times since, twice by the Trump administration and six times under Biden’s administration. While the interest on federal student loans was also suspended, it began accruing anew on September 1.
For accurate information on federal student loans, the FTC recommends the Federal Student Aid website, studentaid.gov.
To safeguard against falling prey to scams, the FTC has offered two pieces of advice:
- Never disclose your FSA ID login details. Only fraudsters would ask for this – they can then sever communication between borrowers and their loan servicer, and may even steal your identity.
- Raise a red flag if someone guarantees debt relief or loan forgiveness, especially if they claim to represent the U.S. Department of Education. There’s no special access to repayment schemes or forgiveness programs. Always login to your student loan account to check your available options.
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FAQs
What are the common signs of a student loan scam?
Some telltale signs of a student loan scam include promises of blanket loan forgiveness, demands for upfront payments, and requests for sensitive details like your FSA ID.
How can I protect myself from student loan scams?
To avoid falling prey to scams, never disclose your personal information, login details, or make upfront payments. Always verify the legitimacy of the source and consult the Federal Student Aid website for accurate information.
Where can I find authentic information on student loan repayments?
The ‘best source’ according to the FTC is the Federal Student Aid website, studentaid.gov, where you can review all your repayment prospects and other essential details.
