Starting in 2021 the U.S. Department of Education is revitalizing student loan repayment. They are organizing a central loan servicing agency through which all taxpayers will pay back their student loans and assigning servicers to manage each persons’ account. At the same time the government has forgiven many student loan balances or paused payments amid the pandemic. Unfortunately, all of these changes have caused the perfect storm of confusion allowing scammers to trick unsuspecting individuals with student loan scams. Scammers have tricked individuals into thinking they are helping them refinance their student loans when they are actually stealing their personal information.
How to Spot Student Loan Scams
It is always important to be skeptical, but now more than ever taxpayers should be wary. If a phone call, email or letter seems off chances are it is a scam. Individuals who think they have been contacted by a scammer should call their loan servicer directly. You should also keep in mind that just because you are contacted by someone who has information on your student loan (such as the total balance), it does not mean they are from the Department of Education. Scammers get a hold of credit reports illegally and used them to find information such as student loan balances. Some scammers claim to be part of the “Biden loan forgiveness” or “Cares Act Loan Forgiveness.” Neither of these are real programs. One red flag is the request includes charges to refinance a loan, federal programs do not ask for extra payments or fees. Personal information should never be given over the phone. It should only be given using a secure portal. Also, any emails should be from a website which ends in .gov.
What to Do if You’re a Victim
People who have been contacted by a scammer should immediately take steps to protect themselves from further loss. If information was given out, immediately freeze or close bank accounts and credit card accounts the scammer has been given access to. Change federal student aid ID passwords the scammer may have stolen. Check credit reports as well to make sure there is no suspicious activity and put a fraud alert on your credit report. Even if no information was given out it would be prudent to monitor your credit score.
Contact Us with Your Questions
If you have questions or believe you are the victim of a student loan scam, contact our professionals at The Innovative CPA Group at 203-489-0612. Or contact us online via our contact form.
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