Federal and state officials alike are warning consumers against an expected uptick in student loan-related scams following Friday’s SCOTUS ruling.
The Supreme Court made the 6-3 decision to block President Biden’s student loan forgiveness program last week, following months of speculation and fanfare. The program promised $400 billion in loan forgiveness to tens of millions of Americans, 22 million of whom signed up within the first week of the registration website going live.
While the Biden administration has promised to pursue student debt relief another way, the highly anticipated decision and subsequent coverage have sown confusion, which officials suspect may be used to scam individuals.
Following the court decision, the Federal Communications Commission (FCC) Robocall Response Team issued a joint statement along with and the Attorneys General of Illinois, Massachusetts, Michigan, and New Hampshire, warning consumers that “scam calls and texts often use broadly publicized current events to add legitimacy and familiarity to their fraudulent schemes.”
In the release, officials outline the most-common pretenses under which scammers try to gain access to sensitive information. It is common, they said, for fake calls and texts to come with fraudulent caller ID to make the call appear more legitimate. The messages may also come from senders claiming to represent a “student loan forgiveness center” or a “state forgiveness center,” and may refer to a “settlement with the Department of Education” that allows recipients to “fully discharge” obligations to their loans.
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Red flags, according to the FCC
- The person calling, texting, emailing or otherwise contacting you pressures you to send money, provide personal information or demands payment upfront in order to handle your “application.”
- The person contacting you tries to direct you to use a third-party web-based communication app, like WhatsApp, to communicate. A call/text may come with a suspicious caller ID, such as a name inconsistent with information provided in further communication or an area code and first three phone number digits matching your own.
- You are directed to any website that is not StudentAid.gov
- The person contacting you asks for your federal Student Aid ID, bank account number, or credit card information or they ask for payment in the form of gift cards. (e.g. iTunes, Target).
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The Federal Trade Commission (FTC) released a similar warning, stating that bad actors may capitalize on confusion around loan repayment to send communications offering to “help” borrowers manage their debt.
Red flags, according to the FTC
- Find out what provider services your loans and only pursue information about your loans through their official channels. You can find your loan providers on your Federal Student Aid (FSA) account dashboard.
- Update your contact information with FSA and your loan servicers and never give away your FSA login or any other personal information.
- Enroll in a repayment plan, set up your monthly payment and stay on top of when loans are due and how/where they are being paid.
- Never pay for help with student loans, as there is “nothing a company can do that you can’t do yourself for free.”
- Do not trust anyone trying to contact you with promises of “helping” with your loans or forgiving them, even if they claim to be with a government agency. Scammers may create false caller IDs, phone numbers, logos and other means of convincing you of their legitimacy. Only seek information about loan repayment options through your verified government student loan account.
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If you suspect you are being targeted in a student loan scam, both the FTC and FCC suggest breaking off contact immediately. When in doubt, never share personal information and contact the relevant institution directly through their official website or publicly available phone number.
Reports can be filed with the FCC at consumercomplaints.fcc.gov and the FTC at ReportFraud.ftc.gov.
