With applications for President Joe Biden’s student loan debt relief plan right around the corner, federal officials are warning about scams.
President Joe Biden announced in August that his administration would cancel $10,000 in student loan debt for federal borrowers with incomes less than $125,000 (or households earning $250,000), as well as $20,000 for Pell Grant recipients.
The program is expected to aid about 40 million people, the White House said. Borrowers can’t apply for forgiveness yet, but the application is expected to become available early this month.
Scammers may try to take advantage of this moment, obtaining borrowers’ personal information to bilk people hoping for this debt relief, or worse, clean out their bank accounts. For borrowers who qualify for forgiveness, it’s critical to know signs of fishy phone calls and emails.
Do not trust unsolicited calls, emails or texts from someone who claims to be from the Education Department or your student loan servicer, the FTC said. Scammers who reach out to you often lie about being affiliated with trusted agencies.
If you’re unsure about who’s calling or emailing, hang up immediately or don’t respond. It’s safer to initiate contact yourself – using information from the Education Department or your loan servicer’s official websites.
Some scammers will create fake applications to access borrowers’ savings.
“The ‘debt relief application’ they give you is sometimes a direct deposit or Power of Attorney form – which lets scammers start to taking money from your bank account,” Grajales writes.
Never provide personal information about your loans with people who contact you out of the blue. Scammers might know some information about your loans, and will use it to gain your trust to get more details from you, the FTC says.
“If anyone says they need your FSA ID to help you, that’s a scam. Don’t do it,” Grajales added. “They can cut off contact between you and your servicer – and even steal your identity.”
Source: USA Today