PORTLAND, Ore. (KOIN) – People want their student loan relief and they want it now, but that rush to clear debt could leave some falling victim to scammers, the Better Business Bureau said.
After the Biden Administration announced Wednesday it would forgive $10,000 in federal student loans for people making less than $125,000 a year and $20,000 for anyone who received a Pell Grant, scammers got to work.
“This is no surprise that people are starting to get those calls and they will continue,” said Roseann Freitas, a public relations and communications manager with the BBB. “That is where people really need to be careful because now they’re appealing to emotions.”
Some people who heard the announcement from President Joe Biden were left with questions like how would the forgiveness be subtracted from their remaining balance? How does the government know who qualifies? And is there any sort of application process?
The BBB warns scammers could make false promises to answer questions like these.
For many, the debt reduction can’t come soon enough and Freitas fears people looking for a quick fix could find themselves in a compromising situation.
“[Scammers] are going to appeal to people and usually how they’re going to do that is they’re probably going to promise to be able to help you expedite the process, make it easier for you to do,” she said.
If people fall for scam calls or emails from people promising to accelerate the forgiveness process, they could end up giving out their personal information to the wrong people – including things like their social security number, address and date of birth.
Someone can steal this information and use it to open accounts under the victim’s name and spend their money, leaving the victim on the hook for fraud.
Thankfully, there are some red flags that should help people avoid falling victim to this scam.
First, Freitas said to watch out for anyone advertising a short-term offer. She said no one should be forcing you to make a decision before you have a chance to think it through, especially with your money.
Second, any call or email that claims to be from the government and comes out of the blue should make people pause and question its legitimacy.
“That’s really not how the government works, especially for this type of forgiveness. You’re going to be initiating this. They’re not going to be contacting you,” she said.
Also, watch out for anyone who says they can only help you if you pay them a fee. The student loan forgiveness is a free program and you shouldn’t need to pay anything.
Any time a call or text comes from someone claiming to work for the government, the BBB says to look up the agency or department online and compare the phone number. If the one that contacted you isn’t listed on the government agency’s website, don’t trust it.
People should also be skeptical of any information given to them by a friend. Remember, just because a friend says something is safe, doesn’t mean it is.
Overall, Freitas said people eligible for student loan forgiveness will need to be patient. The announcement was just made Wednesday and immediately, student loan service websites were overwhelmed by the number of visitors they saw. Student loan payments will not be due until the beginning of 2023, which allows time for the government to make more announcements about how the debt will be removed.
The BBB asks anyone who receives a scam call, text or email from someone promising quick loan forgiveness or assistance with setting up loan forgiveness to report it online. The BBB shares this information with the Federal Trade Commission to help keep consumers safe.
After hearing reports of scammers acting after the student loan forgiveness announcement, the BBB posted information on its website to help people stay safe and avoid becoming victims of fraud.