Tips to Identify and Avoid Student Loan Forgiveness Scams: Cybercrime and telephone fraud are prevalent. Those who are most in need or have a genuine sense of urgency to resolve a problem, such as those struggling with student loan debt, are frequently the most vulnerable.
According to the Education Data Initiative, dishonest people are taking advantage of needy borrowers to profit from the $1.7 trillion total value of student loan debt in the United States.
The Federal Trade Commission (FTC) recently refunded $4.1 million to 27,584 victims who allegedly fell for various companies’ student debt forgiveness schemes.
The Student Loan Group, Federal Direct Group, Mission Hills Federal, and National Secure Processing all utilized a technique that is typical of these types of fraudulent schemes and one can recognize it to prevent falling victim.
Beware of Student Loan Forgiveness Email Scams: Tips to Identify and Prevent Fraud
The fraudulent technique
Ameritech Financial, convicted in August 2023, contacted potential victims by claiming to control their debts and directing payments.
Fraudsters sometimes contacted victims, offering to eliminate or lessen their debt for a small initial payment.
Victims of Ameritech Financial were refunded a cumulative amount of $9 million in August. The FTC announced earlier in 2023 that it would retroactively refund payments to 37,800 victims of a similar scheme.
Recognize the indicators of fraud
Numerous financial scams attempt to ensnare you with similar schemes. A few red flags should be observed if a company or individual contacts you and attempts to convince you to sign up for a service or divulge personal information.
1. Immediacy
Frequently, time-sensitive language is employed in student loan scams, such as “act immediately” or “call now to verify.”
The Federal Student Aid website states that the Department of Education may contact you regarding “temporary programs,” but it will not use such hostile language.
2. Vacuum pledges
Scammers make enticing-sounding but unattainable promises. Under such schemes, you may need to pay a nominal fee to have your debt entirely discharged.
Please be aware that none of the current loan forgiveness programs have repayment obligations, even though many of them require years of qualifying payments or specific categories of employment.
3. Requesting private information
The FSA guarantees that it will never request your account password. Any individual requesting your FSA login credentials is probably employing fraudulent tactics. Additionally, FSA will only communicate with you via one of the following known email addresses:
The department advises borrowers to confirm the legitimacy of email addresses and URLs before accessing information.
Qualifying for Public Service Student Loan Forgiveness (PSLF) Program
