If you’re one of the millions of Americans eagerly awaiting cancellation of thousands of dollars in student debt following President Joe Biden’s recent announcement, know that scam artists are ready to pounce and take advantage of you.
The Better Business Bureau says it has already received reports of people being targeted with fake loan cancellation calls and emails.
Biden said last month that many Americans will be able to get up to $10,000 in federal student loan debt because they earn less than $125,000 a year. People who went to college on Pell grants can be awarded up to $20,000. The details of how this will all work are still being worked 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 scammer says you need to fill out an online application that asks for personal information such as your bank account.
Here’s what one person told the BBB:
“My daughter got a voicemail from the ‘Biden Student Loan Forgiveness Program’… She called back and spoke with ‘Peter,’ who asked for her email address and phone number. He said asked if she wanted to see if she was eligible 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 have to pay a fee up front or redirect your current student loan payments to them.
“I received a ‘Final Notice’ letter stating the amount of the debt,” read a case reported to the BBB. “Thinking it was from the Federal Student Loans Service, I called. They made me change my password and got my bank account number. [And] direct payments to them.
The BBB warns that this won’t be the last such case and that there will be more variations as scammers have time to get creative.
Here’s how you can avoid these scams, according to BBB:
- If in doubt, contact the government agency directly. If you receive a message that seems legitimate, but that you are not sure about, stop communicating with the person who contacted you. Then verify their claims by contacting the government agency they say they represent. For more details on the Student Loan Forgiveness Program, visit ED.gov Where StudentAid.gov.
- Never pay a fee for a free government program. Government agencies will never ask you to pay a fee for a free government program. Don’t let scammers convince you otherwise. The scammers may say that the fee will relieve you faster or unlock additional benefits, but that’s part of the scam.
- Think twice about unsolicited calls, emails or texts. Usually government agencies will only contact you if you ask to be contacted. Impromptu communications are a red flag.
- Don’t give in to scare tactics. If someone says you’re going to miss something if you don’t act immediately, beware. This is an all too common tactic that scammers use on their victims. Instead of responding, stop communications until you can verify what they say is true.
