The recent announcement of extensive student loan debt forgiveness by the White House could potentially benefit more than 25 million borrowers. Unsurprisingly, nefarious actors are already attempting to exploit this situation.
Following this declaration, the Federal Trade Commission immediately issued a warning, alerting about deceptive emails and text messages that can seem genuine. These crafty fraudsters might even have access to your student loan account number or your unpaid balance, making it easier for them to appear legitimate.
People often believe that they can easily detect scams, especially tech-savvy college graduates who are used to avoiding digital scams. However, data from the National Cybersecurity Alliance shows that Gen Z and Millennials fall prey to online scams more frequently than Baby Boomers.
Furthermore, scammers are becoming more refined in their schemes related to student loans, and unfortunately, it works. In May 2023, the FTC thwarted frauds by three companies, who had unsuspectingly amassed more than $12 million impersonating the Department of Education.
Amidst the entanglement of student loan debt relief, a fraudulent message could be mistaken for a genuine one. Elsewhere in this post, we provide information on how to swiftly detect debt relief scams and steps to take if you suspect being deceived.
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Telephone Call regarding Debt Relief – Likely A Sham
Despite it being not entirely out of the question to receive a call from the federal government, calls about loan forgiveness are pretty unusual. According to Mark Kantrowitz, a financial aid expert, the Department of Education is highly unlikely to give you a call, due to their limited human resources.
Fraudulent Emails are Subtler, Yet Leave Clues
Determining false emails can be tricky, especially when swiftly checking your email on your phone. Beware of emails that appear to be official but have minor misspellings. A hint given by the Department of Education is that they only use certain email handles when reaching out to you.
Beware of Suspicious Text Links
Be careful if you receive a text from a number that is not officially recognized by the Department of Education. They will only send text messages from two specific numbers.
Demands for Upfront Payments – A Clear Indication of Fraudulence
You should never have to pay upfront fees for loan forgiveness, and it won’t cost you anything to consolidate your student loans through the Department of Education. If anyone asks for such a payment, it’s most likely a scam.
Steps to Take If You Suspect Being Scammed
If you suspect that you’ve been duped, contact your federal loan servicer right away. Report the incident to the Federal Trade Commission, the Consumer Financial Protection Bureau, and continuously monitor your credit report afterwards.
### Frequently Asked Questions
What is the Federal Trade Commission?
The Federal Trade Commission is an independent agency of the United States government. Its principal mission is the promotion of consumer protection and the elimination and prevention of anticompetitive business practices, such as coercive monopoly.
What is the Department of Education?
The United States Department of Education, also known as ED for (the) Education Department, is a Cabinet-level department of the United States government. It began operating on May 4, 1980. Its functions involve establishing policy for, administering and coordinating most federal assistance to education, collecting data on U.S. schools, and enforcing federal educational laws regarding privacy and civil rights.
How can one protect against scams?
Always securely protect personal information and be cautious of unsolicited communications. Learn about the common types of scams so that you can recognize and avoid them. Do not respond to any solicitation asking for personal or financial information. Be wary of high-pressure sales tactics. Always research a potential lender or loan servicer before doing business with them. Knowledge is power: Stay informed, do your research, and stay safe out there.
