Uncertainty and complexity create ripe opportunities for scam artists to play upon people’s good nature, and take advantage of people’s anxiety and fear about the future. Just last week Vermont Attorney General Charity Clark warned of several scams related to emergency relief services. This is a reminder for each of us to focus on working with organizations whose work we know and trust.
Unfortunately, the same is happening to student loan borrowers. The recent decision by the U.S. Supreme Court to invalidate proposed student loan cancellation, President Biden’s announcement that he was looking for new paths to cancel student debt, and the overall complexity of the Federal student loan program have launched a new round of student loan scammers.
Fraudsters have been peppering cell phones and email inboxes for the last year with claims that borrowers need to register with them to qualify for loan forgiveness, or that they can offer access to early rounds of funding. According to the Federal Trade Commission, scammers are resuming those efforts as anxiety mounts about payments and interest that will restart in the fall after a three-year hiatus.
Scammers often “take advantage of confusion around big news like this,” the FTC said in a consumer alert issued earlier this summer.
So, in the coming months, as Congress and the President continue to negotiate over student loan forgiveness plans, it pays to remember two things:
#1: You don’t need to do anything or pay anybody to sign up for any Federal student loan relief program. No one will be able to get you in early, help you jump the line, or guarantee eligibility. And anyone who says they can — or tries to charge you for that advice — is out to scam you.
#2: There is no reason to ever pay for help with your Federal student loans. “There’s nothing a company can do that you can’t do yourself for free,” the FTC says.
For example, at no cost, the U.S. Department of Education, and its federal loan servicers, can help you:
- lower your monthly loan payment;
- change your repayment plan;
- consolidate multiple federal student loans;
- postpone monthly payments while you’re furthering your education or are unemployed;
- see if you qualify for loan forgiveness or other programs; and
- get your loans out of default.
You can get help at StudentAid.gov/repay, or, if your loans are private, you can go directly to your lender to see what options might be available.
And if you have questions, remember that you can always reach out to VSAC for free assistance with any of these issues, no matter who your loan provider is. VSAC’s financial aid counselors work with more than 43,000 borrowers every year to provide free counseling and information about student loans and repayment. VSAC’s financial aid experts can walk you through your loan terms, advise you on repayment plans, and much more. For questions about student loans, call 1-833-802-8722, 8 a.m. to 4:30 p.m., or reach us by email at info@vsac.org.
As the potential for scams increases over the coming weeks and months, VSAC’s loan counselors offer Vermonters the following tips:
Look for red flags
Scammers try to look real, with official-looking names, seals and logos. They may even say they’re affiliated with the U.S. Department of Education. But watch and listen for these red flags:
- Asking you to pay up front, or pay monthly fees, for access to help. Remember, you never have to pay for help with your student loans.
- Use of pressure tactics, such as “Buy now or miss this opportunity.” Don’t give in, because the “opportunity” is a chance to pay for information you could find yourself for free.
- Running ads, including on social media. Avoid “debt relief” companies that advertise anywhere.
- Asking for a credit card or bank account number. Never give out a credit card or bank account number, unless you have independently verified that the organization you are giving it to is legitimate. You could be putting yourself at risk of identity theft.
- Asking for your Federal Student Aid (FSA) ID or login information. Anyone who says they need your Federal Student Aid ID to help you is a scammer, according to the FTC. “If you share that number, the scammer can cut off contact between you and your servicer — and even steal your identity,” says the agency.
- Promising immediate and total loan forgiveness or cancellation.
- Asking you to sign and submit an authorization form or a power of attorney.
- Sending communications that contain spelling and grammatical errors.
Know how to spot a legitimate loan agency
In contrast, there are some key ways to verify that an agency is legitimate.
First, if you’re inquiring about a government loan, you should verify that you’re interacting with the U.S. Department of Education, its office of Federal Student Aid, or one of its official federal loan servicers.
There are several private companies, called federal loan servicers, that work on behalf of the U.S. Department of Education. The Department contracts with these loan servicers to handle billing, repayment plans, loan consolidation, and other services. Find a list of official, legitimate loan servicers here.
If you receive an email that looks official, verify that the sender’s email address is one of the following: noreply@studentaid.gov, noreply@debtrelief.studentaid.gov, or ed.gov@public.govdelivery.com. Often, an official-looking email message – which may even contain an official seal or logo, as well as the correct name of the sender – will come from a fraudulent email address. So it pays to open up the “detail” window on the sender and see exactly where the message came from.
Received a scam call? Report it.
If you believe you may have received a call, text or email message from a scammer, contact the Vermont Attorney General’s Consumer Assistance Program at 800-649-2424, fill out the form online, or email AGO.CAP@vermont.gov. Your report may save a fellow Vermonter from becoming a victim.
This story is produced by Vermont Student Assistance Corp., created by the Vermont Legislature in 1965 as a public nonprofit agency, to advocate for Vermont students and their families to ensure that they achieve their education goals. Our vision is to create opportunities for all Vermont students, but particularly for those—of any age—who believe that the doors to higher education are closed to them. We begin by helping families save for education with Vermont’s state-sponsored 529 savings program. To help Vermonters plan and pay for college or career training, our counselors work with students in nearly every Vermont middle school and high school, and again as adults. Our grant and scholarship programs attract national recognition, and our loan programs and loan forgiveness programs are saving Vermont families thousands of dollars in interest.
